Industries have to cough up for ASIC’s operations
THE Australian Securities and Investments Commission expects to recoup almost $ 250 million in its first year of “user pays” cost recovery from companies.
Financial corporations are expected to bear the brunt of increased surveillance and monitoring costs with the new levies based on ASIC’s investigations, monitoring and enforcement activities of each sector.
Almost two- thirds of the corporate watchdog’s costs are now expected to come from the new user pay charges.
According to the estimated cost recovery statement, ASIC’s total budget, which is set and paid by the Federal Government, is $ 388 million for the year to June 2018. It forecast yesterday about 64 per cent, $ 246.4 million, of these costs are expected to be earned from the new fees.
“Our industry funding is in- tended to ensure that our costs are borne by those creating the need for regulation,” ASIC said and “create more incentive for self- regulation and improve behaviour in the financial system”.
The cost spent on each sector will now be calculated and charged to the companies and organisations within that sector.
According to finance analyst Digital Finance Analytics principal Martin North, the direct cost charged to companies involved in the major disputes and regulation issues may be pushed on to their customers.
“The bottom line is that additional charges will flow across most business sectors, across corporates and financial services entities,” Mr North said. “The net effect will be to lift the costs of doing business for all of them, which in turn will flow on to higher prices.
“It marks a change in policy where end customers will indirectly pick up the tab, rather than if funded via the taxpayer.
It makes it less of a ( federal) budget problem for the government. Costs do no disappear, they just get allocated and collected differently. But at least ASIC is ( now) more insulated from government budget whims,” Mr North said.
New laws came in to force from July 1 this year allowing ASIC to charge the levies.
Chairman Greg Medcraft expects to finalise the fee calculations by early next year.