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ASIC boost: Big companies to pay $330m a year to fund regulator - SMH - Australia's biggest companies will be hit with extra charges of at least $330 million a year when the corporate regulator moves to a full user-pays model. Treasurer Scott Morrison said on Wednesday Australia's banks would kick in $121 million of a $127 million funding boost for the Australian Securities and Investments Commission, prompting warnings that households could ultimately pick up the tab. But in two years, banks, super funds, insurance companies and publicly listed companies will cover ASIC's budget - now about $330 million a year - delivering a saving to the budget bottom line of more than $1 billion over the four years from 2018-19. Mr Morrison dismissed suggestions the levy for ASIC users was his first tax increase. "The banks are paying to ensure that ASIC has the resources and powers it needs to be a tough cop on the beat," he said, adding the recommendation had come out of a capability review that began last July. The initial $127 million funding boost – which returns a $120 million cut in the regulator in the 2014-15 budget – will pay for a suite of measures designed to strengthen the regulator, head off mounting public concerns about bad behaviour at the major banks, and push back against Labor's politically popular pledge to hold a royal commission on the banking sector. It includes $61.1 million to enhance ASIC's data analytics and surveillance capabilities, $57 million for increased surveillance and enforcement operations in such areas as financial advice and life insurance, and $9.2 million for legal and regulatory reforms. In other changes:
"No longer will it be the case that taxpayers will be hit to fund this regulator, this enforcement authority, this cop on the beat," Mr Morrison said, as he launched an attack on "cynical" Opposition Leader Bill Shorten. "What Bill Shorten is committing to do is spend 50-odd million dollars, $51 million of taxpayers' money, for something that might write a report and might make recommendations, perhaps make these recommendations two years from now. That's not going to give anyone an outcome." Mr Shorten described the proposed reforms as a "political band aid" and asked: "Do you really, seriously believe that the Turnbull government, in the absence of a royal commission being proposed by Labor, would have magically stumped up $120 million? "We proposed a royal commission to get answers. Today the government has announced $120 million worth of hush money." Mr Morrison also warned the additional impost was "easily digestible by the banks, and must be and should be, and I would be furious if I thought this was being sought to be passed on". CPA Australia chief Alex Malley warned that costs could be be passed on to consumers under the funding changes to ASIC. "Apart from risking the wrath of the Treasurer, there is no rock-solid guarantee that the banks will not pass these costs on to customers by way of higher account fees and charges," he said. Australian Bankers' Association chief executive Steven Munchenberg conceded that the costs could be passed on, but said the extra impost, "while significant for ASIC ... I don't think it makes a terrible difference". "Ultimately that's a decision for the banks at the end of the day; whether it's shareholders [who pay], whether it's customers, which I think is unlikely, or whether they try and absorb those costs within their own cost cutting programs, it will be down to individual banks." The government has been on the back foot for weeks over the issue of banks' bad behaviour, with up to eight government MPs backing or leaving open the prospect of supporting a royal commission against a backdrop of ASIC launching action against Westpac and ANZ Banks over alleged rigging of the bank bill swap rate and the Commonwealth Bank being caught up in allegations of unethical behaviour by its insurance arm. |
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