The Institute of Public Accountants (IPA) has highlighted a disconnect between the Australian Securities and Investments Commission’s (ASIC) ability to raise revenue for government coffers and its capacity to do its actual job of regulation and enforcement.
“Even though ASIC is making significant income for government, it is not even able to cover its own costs from the budget it receives from government,” IPA chief executive Andrew Conway said today.
“This also means that ASIC is raising substantially more revenue than its operational costs, which appears to go against the government’s own charging framework.”
Conway said in order to justify the huge increase in proposed fees for industry, the government would need to make the case that genuine operational costs – as indicated by a fee-for-service model – are much higher than the current stated operational costs.
“This is simply not the case,” he noted.
“If the aim of the game is revenue, it may explain why ASIC sought a proposed one-off fee increase from $107 to $3429 for new auditors of SMSFs, which we argued was exorbitant.
“While the new proposed fee has been reduced to $1927, it is still far too high and will only deter new entrants into the SMSF auditor market, which is already in decline.”
Conway said not only is ASIC overcharging but the government is double-dipping.
“The ATO currently already collects $259 from each SMSF to finance the SMSF monitoring role the ATO conducts on behalf of ASIC,” he explained.
“Whilst this levy was a mere $45 in 2008 it now equates to approximately $142.5 million to monitor the sector including SMSF auditors.
“We have a much bigger concern if a new funding model is only focused on government revenue without equipping the corporate regulator to do its job adequately.”
The IPA made a submission to Treasury on the ASIC funding model in December 2017.
