ASIC levy freeze created $46 million shortfall
The Federal Treasury is making no apologies for the lifting of the two-year freeze on the Australian Securities and Investments Commission (ASIC) levy.
And the reason is simple. The levy freeze resulted in a multi-million dollar funding shortfall which Treasury had to find elsewhere.
Appearing before the Senate Economics References Committee inquiry into ASIC investigation and enforcement, Treasury officials made clear their view that advisers should be paying for the cost of regulating their sector.
They pointed to the recent review of the ASIC funding model and said implementation of those recommendations were in process with a number of recommendations requiring legislation and consultation.
Asked by the chair of the Committee, NSW Liberal Senator, Andrew Bragg, whether they believed it was reasonable for financial advisers to be hit with an increase in their ASIC levy bills from $1,200 to nearly $3,500 in one year, the Treasury official, Tim Baird, emphasised this was because of the levy freeze.
“As you are aware the previous Government had in place a temporary levy relief covering the financial years 2020-21 and 2021-22 and that relief was always intended to be temporary,” he said.
“The costs that were imposed in that period were significantly less than what they would have otherwise been in that period.”
“The principal of the Industry Funding Model (IFM) is that the sectors that cause the need for regulation should cover the cost of that regulation and that’s principle that been applied here .”
“During that period of levy relief there was a $46 million shortfall in funding below what the costs of enforcing and regulating that sector.”