Govt warned against extending ASIC-type industry funding to AUSTRAC
The industry funding model applying to the Australian Securities and Investments Commission (ASIC) is grim enough that no one wants a similar model being applied to the Australian Transaction Reports and Analysis Centre (AUSTRAC).
And the point has been driven home by the major accounting groups which have made clear that they do not support the Government moving to a full cost recovery model for the agency.
The Financial Advice Association of Australia (FAAA) has previously argued that the current funding structure for AUSTRAC, exempting small businesses , should remain.
CPA Australia, Chartered Accountants ANZ and the Institute of Public Accountants (IPA) have jointly argued to the Attorney-General’s Department that AUSTRAC needs to be funded by taxpayers, not the entities over which it has oversight,
“We do not support the Government moving AUSTRAC to a full cost recovery agency,” the three organisations said.
“The benefits to be gained by capturing more entities under the AML/CTF regime are for all Australians and the reputation of the nation as a whole as a modern, fair and transparent place to do business.”
“AUSTRAC, as the nation’s Financial Intelligence Unit, focus is to gather and disburse actionable intelligence from reporting entities to relevant agencies and protect all Australians from criminal misuse of the financial system. Therefore, we consider that the costs to modernise, expand and regulate the regime should be borne by the more than 14 million Australian taxpayers, not only the, potentially, 100,000 reporting entities.”
The FAAA submission said that the current AUSTRAC cost recovery levy applied to entities based on earnings and the number and value of transactions reported to AUSTRAC with the result that only medium to large businesses are required to pay.
“The FAAA recommends that small businesses should continue to be exempt from the levy,” it said.
Even more important than issues of unfair financial burden on small business, is the regulatory culture that “industry funding” creates.
ASIC focuses most of its resources on persecuting the licensed industry participants that fund it. They largely ignore the far greater sources of consumer harm from the unlicensed sector. AUSTRAC should not fall into the same trap. Consumers need protection from the real sources of harm.
Rather than AUSTRAC becoming industry funded, ASIC should become taxpayer funded. That’s what is ultimately in the best interests of consumers.