Resourcing of the Australian Securities and Investments Commission

Budget Review 2016–17 Index

Kai Swoboda

On 20 April 2016, the Government announced additional resources for the Australian Securities and Investments Commission (ASIC), comprising:

  • $61 million to ‘enhance ASIC’s data analytics and surveillance capabilities as well as modernise ASIC’s data management systems’
  • $9 million to ASIC and the Treasury to ‘ensure they can implement appropriate law and regulatory reform’ and
  • $57 million to ‘enable increased surveillance and enforcement on an ongoing basis in the areas of financial advice, responsible lending, life insurance and breach reporting’.[1]

The budget papers confirm the allocation of this funding and provide some additional information about how this increased funding will be applied. In broad terms, the $127 million included in the April 2016 announcement is divided into funding to ASIC of $121 million (comprising capital funding of $39 million and operational funding of $82 million) and $6 million to the Treasury.[2]

ASIC resourcing over time

There are a number of ways to examine how resources are allocated to a government agency over time. For ASIC, the most relevant information on resourcing includes changes in ASIC’s programme expenses, changes in staffing levels and the impact of budget measures over time.

Programme expenses

ASIC is responsible for delivering two programmes under the outcome budgeting framework: one related to detecting, understanding and responding to misconduct; and one related to the administration of unclaimed money from banking and deposit taking institutions and life insurance institutions.[3] For the purposes of examining the resources allocated to market surveillance activities, only the first programme needs to be considered, as the unclaimed money function is broadly an administrative function that receives monies from financial institutions which are then paid out to individuals as required.

The four year allocation to ASIC for market surveillance functions reached a high point in the 2013–14 Budget (Figure 1).While the allocation included in the 2016–17 Budget, in both real and nominal terms, represents an increase on the previous Budget, the quantum of funds available is broadly comparable to that provided to ASIC in the 2014–15 Budget.

Budget measures from previous years related to ASIC

 Some of the key changes in ASIC resourcing in previous years which partly explain the overall changes in resourcing have included:

  • 2015–16 Budget—an increase of $19 million over four years for monitoring of market misconduct and implement and monitor a regulatory framework for crowd-source equity funding.[4]
  • 2014–15 Budget—a reduction of $120.1 million over five years to be ‘redirected by the Government to repair the Budget and fund policy priorities. A further $46.2 million in funding cuts over four years were applied through a temporary increase in the efficiency dividend rate.[5]
  • 2012–13 Budget—an increase of funding of $129.3 million over four years for ‘enhanced market supervision’ and ‘operational’ funding.[6]

Figure 1: Nominal four-year ASIC programme expenses (excluding unclaimed money programme), $ million

Figure 1: Nominal four-year ASIC programme expenses (excluding unclaimed money programme), $ million

Source: Parliamentary Library estimates based on Australian Government, Portfolio budget statements 2016–17: budget related paper no. 1.16: Treasury Portfolio, p. 137 (and previous issues) and Australian Bureau of Statistics, Consumer Price Index, Australia, cat. no. 6401.0, Tables 1 and 2, CPI: All Groups, Index Numbers and Percentage Changes.

ASIC staffing levels

An analysis of average staffing levels included in the portfolio budget statements since 2008–09 shows that average staff levels for ASIC reached a peak of 2,040 staff in 2010–11, and then declined each year to reach 1,573 staff in 2015–16. Expected staffing levels for ASIC will now increase to 1,687 in 2017–18.[7]

ASIC capability review

The ASIC capability review, commissioned by the Government following a recommendation of the Financial System Inquiry, analysed annual revenues and expenditures and staffing for ASIC over the period 2004–05 to 2014–15.[8] This analysis shows resourcing at its peak (both financial as well as staffing) in 2009–10, with a fall each year since 2012–13.[9]

Changes to ASIC’s funding model

The Government’s 20 April 2016 announcement included a proposal to change ASIC’s future funding mix, with the introduction of an industry-funded ‘user pays’ model for some of ASIC’s functions, to commence from 2017–18.[10] This approach will implement a recommendation of the Financial System Inquiry.[11] While the ASIC activities to be funded by industry has been informed by an August 2015 Treasury consultation paper, there may be some activities, such as financial literacy education, that remain funded by government.[12] The budget papers confirm that the additional funding for ASIC totalling $121.4 million will be recovered by an increase in levies collected by the Australian Prudential Regulation Authority.[13] However, the amount which industry will fund for ASIC’s activities from 2017–18 is not able to be clearly identified in the budget papers.



[1].          S Morrison (Treasurer) and K O’Dwyer (Assistant Treasurer and Minister for Small Business), Turnbull Government bolsters ASIC to protect Australian consumers, media release, 20 April 2016.

[2].          Australian Government, Budget measures: budget paper no. 2: 2016–17, p. 148–149.

[3].          Australian Government, Portfolio budget statements 2016–17: budget related paper no. 1.16: Treasury Portfolio, pp. 137–142.

[5].          Australian Government, Budget measures: budget paper no. 2, 2014–15, p. 214.

[7].          Portfolio budget statements 2016–17: Treasury Portfolio, op. cit., p. 138 (and previous issues).

[8].          ASIC Capability Review Panel, Fit for the future: A capability review of the Australian Securities and Investments Commission, A Report to Government, December 2015, pp. 36 and 137.

[9].          Ibid.

[10].       S Morrison (Treasurer) and K O’Dwyer (Assistant Treasurer and Minister for Small Business), op. cit.

[11].       Financial System Inquiry, Final Report, Treasury, November 2014, p. 250.

[13].       Australian Government, Budget measures: budget paper no. 2: 2016–17, p. 148–149.

 

All online articles accessed May 2016. 

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