Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Hansard source

Firstly, I'd like to thank those members who have contributed to this debate. Strong and effective financial regulators go hand in hand with a strong and effective financial system. This was one of the reasons the government commissioned the Financial System Inquiry in 2013. This review resulted in recommendations to strengthen the Australian Securities and Investments Commission, the corporate market's financial services and consumer credit regulator. The Corporations (Fees) Amendment (ASIC Fees) Bill 2018 and associated bills implement a recommendation from this review—the introduction of an industry funding model for ASIC.

The industry funding model's introduction has significant benefits, including improving equity, as the costs of regulation are borne by those who have created the need for it rather than Australian taxpayers; encouraging regulatory compliance, as good conduct will reduce supervisory levies; improving ASIC's resource allocation, by providing ASIC with richer data to better identify emerging risks; and enhancing ASIC's transparency and accountability. The government is committed to ensuring that ASIC has the resources and powers it needs to combat misconduct in Australia's financial services industry and bolster consumer confidence in the sector.

Consistent with this commitment, the government has introduced legislation on the second phase of the ASIC industry funding model—the introduction of ASIC fees for service. Under the ASIC industry funding model, from 1 July 2018 fees for service will be introduced to recover ASIC regulatory costs that are directly attributable to a specific entity, such as the processing of a licence application. Currently the fees associated with these activities do not reflect the costs to ASIC of undertaking these activities. Traditionally many of these activities have only attracted a nominal fee, which has not been subject to any review, resulting in the cost of these activities being subsidised by taxpayers. This measure fulfils the government's commitment in accepting recommendation 29 of the Financial System Inquiry.

This measure builds on the other key initiatives undertaken by the government to ensure that ASIC has the powers it needs to promote trust and confidence in the financial system, including establishing and implementing the recommendations of the ASIC Enforcement Review Taskforce to substantially increase the penalties available to ASIC and to boost its regulatory toolkit; appointing a new ASIC chairman, James Shipton, who brings deep regulatory and financial market knowledge to the role; creating a second deputy-chairman role, with a focus on enforcement, and appointing the highly regarded Daniel Crennan QC to this position; legislating to remove ASIC employees from the Public Service Act to enhance ASIC's ability to attract and retain the best staff; and legislating to include competition considerations within ASIC's mandate.

In conclusion, the introduction of the second and final phase of the ASIC industry funding model is a critical component of the government's reforms to strengthen ASIC and better protect Australian consumers. Industry funding ensures that the costs of regulation are borne by those that created the need for it rather than the Australian public. These amendments allow ASIC to better align its fees by enabling ASIC to charge a cost-reflective fee for the services it provides for a specific entity. I commend the bill to the House.

Question agreed to.

Bill read a second time.

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