ASIC’s Budget cut beggars belief

By Leith van Onselen

The Federal Budget’s decision to slash the permanent funding of the Australian Securities and Investments Commission (ASIC) by $26 million to $320 million by 2020-21, as well as cut staff numbers at the agency by 30 investigators, has been slammed by Labor MP and former federal prosecutor, Matt Keogh. From The AFR:

Labor MP Matt Keogh said the cuts prove Treasurer Scott Morrison is “all bark and no bite” when it comes to fighting corporate crime…

“The Treasurer is all bark and no bite when it comes to making sure our white collar agencies are fighting corporate crime arising from misconduct by our financial services organisations”…

“You have got to contrast these cuts against the comments of Mr Morrison last week that they would go after big scalps arising out of APRA’s CBA report and the royal commission,” he said…

The budget bombshell… is a slap in the face to newly installed chairman James Shipton who will see his war chest shrink by $26 million within three years and be forced to cut his staff by 30 by next year…

There were some temporary offsets, however, with the Government separately providing $10.6 million over two years from 2017-18 to ASIC to assist the agency with their involvement in the Banking Royal Commission:

Still, it is a very poor optic to be cutting ASIC’s permanent funding and investigatory capability at a time when corporate Australia (particularly the financial sector) has run amok, and public trust in our financial institutions is running so low. And it comes on top of cutting funding to the Fair Work Ombudsman.

The Turnbull Government seems to tacitly endorse corporate malfeasance.

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Unconventional Economist
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    • Torchwood1979

      Here’s some more nothing from Do Nothing for you to continue even more doing nothing. Fitting.

    • Mining BoganMEMBER

      Maybe more a warning. Start poking around the mess coming from the royal commission and we’ll remove all funding.

      The gubmint is desperate to bury banking shennanigans.


        Is just another less savoury aspect of the ‘free market’ model where to avoid prosecution, it will be wise to eliminate those who are part of the oversight and criminal justice branches.
        Is straight out of the Mexican drug lord handbook where they sought to eliminate all those in the chain who would ‘interfere’ with the expansion of the empire; beginning with the local beat Policia Federal and all the way up to the sentence giving judges and the prosecutors.
        Se habla Espanol.

    • Spot on!

      There is absolutely no point chucking money at a regulation model and culture that does not work. A root and branch remodelling of ASIC is requires with a fresh upper level management team.
      ASIC needs to work for an efficient market based on transparency. It should have the powers required to keep miscreants in line but should be guided by a panel of industry experts, whose best interests are strongly linked to an efficient, open, transparent and well run market.

      ASIC should not see itself as a cop on the beat, but work more collaboratively with the market as its servant. Only a crook benefits from a crooked market. The nation, investors and listed companies, as well as all financial intermediaries want a well run market that offers best prices to investors and fair access to funds by capital hungry business.

      • Hi Peter…

        Are you aware everything you just said is exactly the argument the Chicago boys made in the run up to the GFC, not to mention unleashing derivatives. The entire thing is dependent on rational agent models and EMH, both of which have been shown to be complete fabrications without any empiric underpinnings or evidence to support.

      • Even StevenMEMBER

        “The nation, investors and listed companies, as well as all financial intermediaries want a well run market that offers best prices to investors and fair access to funds by capital hungry business.”

        Huh? Best price? You mean best rip-off price to serve their own interests!

      • E/S.
        A poorly run market will see low PERs so that the price received by those raising new capital will be low. If a market is perceived to be fair, it will achieve better (higher) prices for new capital issues.

    • Who heard former ACCC Chair Graeme Samuel pouring scorn on the previous ASIC Chair on ABC RN this morning?
      All those banking issues came to the fore under Greg’s run in office. He had the tools to prevent it but was apparently too busy flying to international conferences to big-note himself and prepare for his next gig.

  1. ErmingtonPlumbingMEMBER

    Ha Ha Ha,…after all the findings of the Royal Commission of endemic fraud,…they Cut funding to ASIC.
    Lol,…those Bold and brazen C#nts.
    They have no shame.

    • where is the media outrage and why masses are not on the streets rioting? as long as Facebook and Tinder matters more than anything else there will be more of the same.

    • Ermo,
      ASIC were actually very aware of a lot of the transgressions that were identified by the RC — some of them were nearly 10yrs old FFS! A mate of mine had very specific info relating to an ANZ practice that has recently attracted attention and this issue was raised with ASIC in 2011!! Suggesting that raising funding to these clowns is complete f#cking BS. It’s like suggesting that, in a failing education system (which we definitely have), that raising ‘funding’ will improve educational ‘output’. I hate to say it but the ‘system’ is f#cked.

  2. HadronCollision

    they’re already useless
    Or maybe a reflection of the RC and their uselessness
    Maybe there’ll be another regulator. Maybe the ABA?

  3. HadronCollision

    PS: If Boobs Scooten can’t get all over this and hammer the message home he does not deserve to be el presidente

  4. ASIC have done nothing with existing funding, why would you throw good money after bad?

    Clean the joint out, then ramp up funding if required

    • this is what Libs wants us to think. They cut enough funding to degrade ASIC’s ability to play aggressive so they can tell us it is better to killed it off and perhaps allow Banks to do more self regulation.

    • Totally agree. ASIC’s culture is all wrong. It should be the servant of the market, not its master.

      • Markets are creatures of law and as such government is the ultimate master, in as such, since the early 70s corporatists have been driving government policy. Hence if you don’t like the way things are you might consider that your suggestions are and have been in play for some time.

    • Classic tory play. Reduce funding for an institution until it can’t do it’s job, then use that as an excuse to close it.

  5. Naive question: How about APRA, does the govt have power to disband or at least cripple them?

  6. kiwikarynMEMBER

    You don’t bite the hand that feeds you. Or the one that employs you after you’ve been voted out. This is what banks and big corporates pay politicians for – to look the other way.

    • That makes me think, what is stopping a high court judge from being corrupted by being given a job in a corporation after issuing an order in favour of that corporation?

    • kiwikarynMEMBER

      If anyone has watched the TV show Billions, this was well illustrated this season, when the new US AG ordered the NY attorneys to drop 90% of the corporate investigations.

  7. ErmingtonPlumbingMEMBER

    “You don’t bite the hand that feeds you. Or the one that employs you after you’ve been voted out.”

    This is of course, the crux of the matter.

  8. Horrific for the 30 staff.

    The most brainless thing the LNP do – at both the state and federal levels – is sack public sector staff. Jeff Kennett and Campbell Newman were booted out over it. In the ACT, they lose election after election over it.

    Why not have attrition instead? Or give the sacked workers a lifelong pension at their current rate of pay – offset by any income they get from a future job (if they can get a job instead of a 457 visa worker).

    Jeff Kennett got rid of tram conductors. Why not do it via natural attrition instead?

    The ALP is brainless as well and refuses to do anything gutsy – like massively increasing taxpayer funding to political parties without banning unions from donating to the ALP.

    • boyracerMEMBER

      “Or give the sacked workers a lifelong pension at their current rate of pay – offset by any income they get from a future job (if they can get a job instead of a 457 visa worker)”.

      Cause all you’ll do is end up with the laziest workers trying to get sacked to get the pension and not look for work after they get the boot.

      ASIC have been asleep at the wheel – why should they be rewarded for failing? That’s the bankers job!

    • Even StevenMEMBER

      I was just going to add a +1 to boyracer’s response, but I felt it wouldn’t do my disgust justice.

      How ON EARTH could you propose a lifelong pension for sacked public service workers?
      1) maybe they deserved to be sacked (because they were the most useless of a bad bunch)
      2) even if they were adequate in their jobs, I still wouldn’t give them a lifelong pension.

      What are you going to suggest next? Every 6 year old should be given a pony?

      • Even StevenMEMBER

        Just to be clear, I’m not endorsing the funding cut.

        Ideally I’d give them a 20% funding boost AND sack the bottom 10%.

    • You do understand you have the hard core neoliberal NLP [I am a survival of the fittest conservative – obey me] and the Overton window neoliberal faux Labour [look darlings this might hurt a bit but its for your own good]. Yet at the end of the day both will say – the market – demanded it.

      Sweet dreams Jacob….

  9. Michel Camdessus

    For consideration :

    In 2012-13 ASIC budget was around $500 million. That’s more than a third of their funding cut in non adjusted terms during Abbott/Turnbull governments.

    The LNP supporters around here seriously need to consider their life choices – the Abbott / Turnbull LNP are not outliers, they are the reality of conservative politics laid bare.

    When you are young if you don’t vote left, you have no heart, as you age if you don’t vote right – you have no brain. But eventually you realize that the right are just a bunch of moronic arseholes who are only looking out for themselves and will destroy anything to get what they want.

    Right wing conservatism is the pinnacle of myopia writ large.

    • Michel Camdessus, it might be worth voting left if the left offered something sensible like free bus travel for kids or a mild UBI in the guise of “electricity bill rebate” cheques.

      • School kids do get free travel. Do you ever research before your comments or do you deliberately Trump it up?

  10. Wow this has got to be a stupid move as you can get given the RC results from a political perspective. I suspect they really have misjudged this move. Imagine if after the RC into child abuse they cut money to child protection services

  11. Not surprised really, this sack of slugs fought tooth and nail against a Royal Commission while pushing tax cuts for companies that don’t pay tax. Weakening an already weak regulator is just part of LNP play book.

  12. ASIC is just one of a long list of the most useless regulators or cops on the beat that this country has produced. It is a wonder they have even got any funding. They are impossible to deal with & are a joke. Just as with APRA, RBA, et al, ASIC could easily have been in front of all the FIRE SECTOR scandals & many other non FIRE scandals. But just as all of them & the “Elite” they didn’t really want to know where the skeletons were. Pretty much everyone has known but no-one did anything. I cannot cry me a tear over ASIC or any other useless regulator. They are all part of the problem & most certainly not part of the solution. In this case it is as Flawse always says or as I can paraphrase “the problem started way back in time”. Funding cuts or funding increases for ASIC or any other will make sweet F?#! all difference. Their culture & ability will not change. They are just as much part of our current problems as are the companies challenged by the Royal Commission & everyone else. ASIC is not going to help the current situation, so forget about them.

    • Lol. The regulators are an unsophisticated ‘sop’ — designed to fool the plebs into thinking that the Govt has the citizens’ best interests at heart.

      Bless …

  13. Meh. So they won’t be able to afford 3 day old lettuce leaf to slap “transgressors” with, it’ll have to be week old.

    They’ve been useless parasites for many years now, under both stripes of government.