As part of the budget, the government said that it would provide $606.7 million over five years from 2018–19 to facilitate the government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Part of this funding will go towards establishing an independent financial regulator oversight authority, to assess and report on the effectiveness of ASIC and APRA in discharging their functions and meeting their statutory objectives, which represent $7.7 million over three years from 2020–21.
Further, $1 million in 2018–19 has gone towards a capability review of APRA which will examine the effectiveness and efficiency in delivering its statutory mandate as well as its capability to respond to the royal commission.
$11.2 million will be spent in 2019–20 towards establishing a Financial Services Reform Implementation Taskforce within the Treasury to implement the government’s response to the royal commission, and co-ordinate reform efforts with APRA, ASIC and other agencies through an implementation steering committee.
The budget papers state that the cost of this measure will be partially offset by revenue received through ASIC’s industry funding model and increases in the APRA Financial Institutions Supervisory Levies and from funding already provisioned in the budget.
Australian Executor Trustees senior technical services manager Julie Steed said that the additional funding for APRA and particularly ASIC could mean that there will be additional costs for advice firms in running a licensed business in the form of additional levies.
“It’s great that the government is going to cough up a lot of it, but their intention is that it’s self-funded regulation,” Ms Steed said.
“So, this will be an initial kick-start to get the ball rolling and resource those departments to what they need to be, but once that’s completed, I think [the] government has been quite clear that they expect industry to self-fund regulation or oversight.”
Ms Steed said that, even if it’s not extra levies, it may still require them to report to ASIC in a more timely fashion, which will mean redesigning their customer relationship management systems so that they can actually report information to ASIC quickly.
“One of the royal commission recommendations was to produce a file to AFCA within 48 hours or so. In order to have all your files there electronically and make sure all your case notes and things are there so that you can just download a file and send it off, [this] will be quite significant in costs to practices,” she said.
“With some of the more established practices, it’s all about the relationship, and many of those practices haven’t kept pace with the technology available.”
At what point is there push back? Our pathetic so called “associations” roll over for their bellies to be scratched. I struggle to see many clients now due to the avalanche of paperwork that keeps us tied to the desk due to increased compliance burden…tell me where that is in a clients “best interest”?
More red tape. more cost, more compliance, more rules, more complexity, more compulsory feeding of the inept, inefficient and parasitic bureaucracies and more of nothing. Even a regulator supervising another regulator. Waiting for the regulator supervising the supervisory regulator. Unbelievable garbage.
Australia has become so incredibly over regulated at every turn.
Any new regulation needs to see another piece of regulation removed.
It’s beyond a joke the ever increasing regulation and insanity of our system.