The Australian Securities and Investments Commission (ASIC) will be provided with more than $400 million in additional funding, representing on average a 25 per cent increase in its annual funding compared with 2017-18.
The government will also provide the Australian Prudential Regulation Authority (APRA) with more than $150 million in additional funding, representing on average a 30 per cent increase in its annual funding compared to 2017-18.
The final report of the royal commission called for the establishment of a new oversight authority for APRA and ASIC, independent of government, to assess the effectiveness of each regulator in discharging its functions and meeting its statutory objects, following criticisms of the regulators.
Federal Treasurer Josh Frydenberg, had also earlier criticised the failings of the corporate regulator, ASIC, in capturing and punishing misconduct.
“The additional funding for ASIC will ensure it has the resources it needs to perform its critical role in ensuring the law is adhered to in the financial sector and consumers are put first, second and third,” said Mr Frydenberg.
“The funding for APRA will strengthen and improve its capabilities so that it can perform its critical role in restoring trust in Australia’s financial sector.”
The accounting industry has been wary of the defunding of regulators, with the Institute of Public Accountants warning that if the government does not act on funding regulators, including the Tax Practitioners Board, then issues will start to appear down the line.
“It is important to understand that the underfunding of the past has contributed to the regulators falling short and that is something that is coming to roost and the fact that they’ve all received a boost in funding is recognition of that issue that has plagued the regulators,” said the IPA’s Tony Greco.
“It gives you an example of how hamstrung some regulators are and I think the same can be said about ASIC. Part of the issues that are unravelling or have unravelled has got to do with resourcing and it won’t answer for all the deficiencies that are happening in relation to the findings but certainly part of the problem has been the resourcing.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.