Almost $200 million has been cut from the Australian Securities and Investments Commission’s budget since the Coalition came to power in 2013, Parliamentary Library research has found, giving Labor fresh ammunition that the corporate regulator has been starved of resources to crack down on the bad behaviour exposed by the banking royal commission.
Opposition financial services spokeswoman Clare O’Neil said even with the government scrambling to provide an extra $70 million to ASIC as Commissioner Kenneth Hayne uncovered the full extent of misconduct in the industry, it still would not cover a funding reduction outlined in the May budget.
With ASIC officials including chairman James Shipton facing Senate estimates on Wednesday, Ms O’Neil said the funding cuts belied the government’s claim it had a “tough cop on the beat” for the financial sector.
According to the Library’s research, as ASIC’s budget has been reduced, the number of staff has fall by 20 per cent, from a peak of 1980 in 2009-10 to a low point of 1569 in 2015-16. The number of staff is expected to climb back to 1719 this financial year.
Using ASIC annual reports, the library’s research found ASIC received $393,957,000 from taxpayers in Labor’s last year in office in 2013 but in the three subsequent years after Tony Abbott won the election, government funding was reduced by millions of dollars annually.
In 2017 and 2018, the government increased annual funding to almost $357 million but this was still $37 million short of the 2013 allocation. All up ASIC received $197 million in less funding than if the Coalition had frozen its budget at 2013 levels.
In Scott Morrison’s final budget as treasurer, handed down in May, the government committed $348 million to ASIC in 2018. But the regulator’s annual budget will continue to be reduced successively below this benchmark, totalling $81 million by 2022.
Ms O’Neil said the library’s research showed that under Labor, ASIC was funded on average by $30 million more a year compared to the Abbott-Turnbull-Morrison governments.
“For years, Scott Morrison and the Liberals have been claiming that ASIC has the resources and powers they need to be ‘tough cops on the beat’. But the horror stories flowing out of the banking royal commission show a very different story,” she told The Australian Financial Review.
“As soon as they got into government, the Liberals cut literally hundreds of ASIC staff. All up, since the Liberal Government came in, ASIC has missed out on almost $200 million in funding.
“This has hurt ASIC’s ability to crack down on corporate misconduct, and undoubtedly has led to companies getting let off the hook.”
Ms O’Neil said the government’s attempt to restore some funding to ASIC was too little, too late for consumers who had been ripped off and had their lives destroyed by the big banks and financial services providers.
“The government is now furiously backpedalling to restore some of this funding to ASIC, but the impact of their savage cuts cannot be undone so easily,” she said.
Amid public outrage over evidence that banks, superannuation funds and insurers had misled regulators and fleeced customers, the government announced an injection of an extra $70 million to ASIC in August, including $26.2 million to take on “well-funded litigants”. The government is also strengthening white collar crime penalties.
Mr Hayne’s interim report criticised regulators for not doing enough to punish misconduct within the financial services industry.
While Ms O’Neil did not explicitly commit a future Labor government to lifting ASIC’s funding, she said the party had a “proud track record” of funding the corporate regulator.
She said Labor would examine the royal commission’s recommendations to see whether it needed extra resources to pursue matters arising from its final report.
“We’re very concerned about the current funding allocated to litigation coming out of the banking royal commission,” she said.