The Federal Government should move swiftly to establish a three-year funding arrangement for the Australian Securities and Investments Commission (ASIC) as part of its response to the Murray Inquiry, Governance institute of Australia said yesterday
“Governance Institute applauds the government’s overall response to the Financial Services Inquiry (FSI) report,” Governance Institute chief executive Steven Burrell said.
“However, we are concerned that not providing ASIC with a three-year funding model now, as recommended by the FSI, but rather waiting for the ASIC Capability Review report will not achieve the best outcome.
“Economic cycles and government revenue swings mean that there is currently no stability or certainty about funding for our corporate regulator.
“ASIC needs more money when it is busiest in a downturn, which is exactly when Canberra dips into deficit and tightens the screws on expenditure. The seeds of misbehaviour are sown when markets are strong, but by the time the economy is in bad shape and ASIC needs more resources to sort out the wreckage from the boom times, government funding has dried up.
“The FSI recommendation for a three-year funding model supported by an appropriate user-pays regime was designed to ensure that ASIC can plan how to deploy its resources and have flexibility about where they are needed most.
“The Capability Review is to help ensure that ASIC has the appropriate skills and culture to adopt a flexible risk-based approach to its future role. If no certainty is granted to ASIC as to funding over a three-year period, it has no flexibility as to how it spends its budget,” Mr Burrell concluded.
