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

I move:

That this bill be now read a second time.

Today I introduce a bill that delivers on the government's commitment that the Australian Securities and Investments Commission costs for specific regulatory activities requested by an entity should be fully recovered from that entity. This is referred to as 'fees-for-service' and is the second and final phase of the ASIC industry funding model and will commence on 1 July 2018.

The first phase of the industry funding model commenced on 1 July 2017. This enabled ASIC to recover costs associated with its general regulatory activities via levies. This involves ASIC's regulatory costs being allocated across 48 industry subsectors based on the actual costs of ASIC's regulation of each subsector in the previous financial year.

The industry funding model's introduction has had significant benefits, including:

The current fees charged for the services and activities ASIC provides is not a true reflection of the actual costs incurred by ASIC. Historically, these services and activities have only attracted a nominal fee. As a result, any difference between the fee an entity pays and the actual costs incurred by ASIC is subsidised by taxpayers.

To give effect to the government's commitment, this bill amends the Corporations (Fees) Act 2001 to:

These amendments will allow ASIC to better align its fees with the costs ASIC incurs when providing regulatory services to a specific entity—such as processing a licence or registration application—provided that the fee directly represents the efficient costs of providing the regulatory activity or service.

These fee amounts will be reviewed every three years. The review process will involve a public consultation process utilising a cost recovery implementation statement. Both the cost recovery implementation statement for fees for service, and for levies, will identify and explain all proposed changes to fees or levies. The cost recovery implementation statement must include a summary of the consultation process, the issues raised, how those issues have been considered and an explanation of the costing model for the activity. In addition, ASIC will include industry funding on the agenda of all their external committees and panels for consideration, with a particular focus on seeking feedback during the annual cost recovery implementation statement consultation process, as an extra accountability mechanism. The government will review this industry funding model accountability framework in three years.

Further complementary amendments are given effect and described in the National Consumer Credit Protection (Fees) Amendment (ASIC Fees) Bill 2018, the Superannuation Auditor Registration Imposition Amendment (ASIC Fees) Bill 2018 and the Superannuation Industry (Supervision) Amendment (ASIC Fees) Bill 2018.

The fees attached to ASIC forms relating to updating an ASIC registry database are not in scope for industry funding and will not be recovered under this model. The fees for lodging these forms will continue to be set separately.

This bill gives effect to the government's commitment in accepting recommendation 29 of the financial system inquiry to introduce an industry funding model for ASIC.

The government has consulted extensively with industry on the design of the ASIC industry funding model. Nearly 300 submissions were received and considered.

Subsequently, public consultation on the introduction of the fees-for-service regime was conducted between November and December 2017. Public consultation on the draft legislation was undertaken in April 2018.

This builds on other key initiatives undertaken by this government to ensure ASIC has the powers it needs to promote trust and confidence in the financial system, including:

The Legislative and Governance Forum on Corporations was notified in relation to the bill as required under the Corporations Agreement 2002.

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 have created the need for it, rather than Australian taxpayers. 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.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.