The Federal Government is cutting funding to the corporate watchdog, as it pushes for less regulatory oversight of the financial sector.
Over the next five years, $120 million will be pulled from the Australian Securities and Investments Commission’s (ASIC) funding.
A spokeswoman for Finance Minister Matthias Cormann, the minister responsible for ASIC, says the saving is necessary for the Government to repair the budget.
But less than a decade after banks sparked the global financial crisis, the Government is signalling it wants to reduce regulation of the sector.
Parliamentary Secretary to the Treasurer Steven Ciobo told a post-budget breakfast in Sydney on Wednesday morning the Government is in favour of more “self-regulation”.
“The Government thinks that there is scope for the financial services industry, and for all the other industries, to self-regulate more,” Mr Ciobo said.
“There will always be (as a general statement of principle) our preference for self-regulation over the need to have a regulator [that is] tax-payer funded intervening in the field.”
When asked whether the cuts would reduce ASIC’s power as a regulator, the Finance Minister’s spokeswoman said “ASIC will continue to be able to perform its statutory objectives”.
The Government says it will be up to ASIC to decide how it allocates its reduced funding. ASIC is yet to reveal its plans.
The Financial Planning Association’s Dante De Gori expressed concern that ASIC could raise the prices it charges for services.
“In particular we will be keeping a watch on the impact to the funding in respect to any adverse effect in terms of licensing costs, and the like, for financial planners,” he said.
“We will also seek to ensure no impact on the regulator’s services and capacity to monitor and supervise the industry.”
The former Labor government had lifted ASIC’s annual funding from $304 million to $350 million last financial year.
The regulator also generates hundreds of millions of dollars in revenue through functions such as registering business names.
The registry may be privatised, with the Government setting aside $11.7 million to examine its sale, as well as the sale of Australian Hearing, Defence Housing Australia, and the Royal Australian Mint.
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