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A parliamentary committee has launched a scathing attack on the corporate regulator, arguing that its credibility has been undermined by its “misleading and deceptive” SMSF fact sheet.
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‘Credibility undermined’: ASIC cops parliamentary blasting
10 December 2020
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Tabling its report on ASIC’s 2019 annual report, the House of Representatives standing committee on economics chair Tim Wilson said confidence in the corporate regulator had plunged this year due to “problems of its own making”.
Mr Wilson singled out ASIC’s 2019 SMSF fact sheet — that claimed that the average cost of running an SMSF was $13,900 a year — as an example of “spectacular and unsupportable” claims that stemmed from the corporate regulator’s lack of internal controls and accountability.
The ATO revealed in June this year that the average operating cost of an SMSF in 2017–18 was $6,152, with the median cost at $3,923.
“While this matter may appear trivial, it raises serious questions about the internal processes for approval within ASIC for information that is promoted to inform consumers and their choices, and whether ASIC understands the products they are regulating,” Mr Wilson said.
“It is simply absurd that ASIC would put information in the public square that claimed the cost of running an SMSF annually exceeded half the cost of the maximum contribution that could be made to it without scrutiny of the underlying data.
“To date, there has been no acknowledgement of this error, and apology for it. Instead ASIC has stood by it and claimed that new data has simply superseded it.
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“This attitude undermines ASIC’s credibility. Had a regulated business made similarly misleading statements about a competitor product, they would face sanction. Yet those who impose sanctions are holding themselves to a different standard.”
Mr Wilson also noted that the revelations and subsequent ongoing investigations into payments made by ASIC on behalf of its two most senior officers — chair James Shipton and former deputy chair Daniel Crennan — had overshadowed the work that the corporate regulator had done over the year.
Mr Shipton announced that he was stepping aside from role in October after it was revealed that ASIC paid $118,557 to KPMG on behalf of Mr Shipton for personal tax advice in relation to his relocation from the United States.
ASIC was also found to have paid just under $70,000 on behalf of deputy chair Mr Crennan for accommodation expenses in relocating him from Melbourne to Sydney. Mr Crennan has since resigned from his role.
Mr Wilson has now tasked ASIC with rebuilding its credibility over the next year, warning that his committee would closely scrutinise the regulator’s performance.
“The committee will not comment on the substance of these matters, as the independent review is still underway at the time of writing,” Mr Wilson said.
“However, the committee is very disappointed that such a review is necessary.
“ASIC should be leading by example. It must be beyond reproach in its governance and accountability structures and processes.”
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