Government Muzzles ASIC
ASIC has confirmed that despite the rhetoric of industry funding, its capacity to pursue regulatory priorities like keeping our banks on the straight and narrow is at the mercy of Government funding.
When the Government introduced industry funding it said that it would “better protect consumers” and “make ASIC a stronger regulator”.
It vowed to throw the book at the big banks, only last year announcing “ASIC will make industry more accountable for its behaviour”. (30 March 2017)
This week Kelly O’Dwyer told the Parliament “the government is committed to ensuring that ASIC has the resources and powers it needs to combat misconduct in Australia's financial services industry and bolster consumer confidence in the sector”. (18 June 2018)
But yet again it has broken this promise, cutting the regulator’s funding and supervisionary capabilities with a $26 million funding cut over the next three years.
ASIC Chair James Shipton revealed in today’s Public Economics Hearing that even though the Government offsets it’s costs of funding ASIC, it is nevertheless reducing its funding at a time its workload is increasing.
Mr Shipton last month approached the Treasurer for more funding to increase ASIC’s supervisory capacity in financial institutions as the current industry funding model means they are completely at the mercy of the government’s finance department.
The regulator came under fire today for not being tough enough on banks and financial advisors whose unconscionable behaviour is being exposed in the banking Royal Commission, but how can they be when they are starved by the hand that feeds them?
This comes as the Turnbull Government continues to delay measures to tackle payday lending and product intervention power reforms that will give regulations and consumers more power to get a better deal.
Only Labor will continue to work to ensure ASIC and the Royal Commission deliver justice to those who have suffered because of the misconduct in the banking and financial services sector.
Only appropriate regulation of the banks and funding of the authorities that hold them to account will ensure that business’s and employees doing the right thing will benefit, contributing to the long term economic sustainability of our nation.