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The government's decision to withdraw $120 million in funding to ASIC over the next five years could have significant implications for accountants, with possible changes to the funding model around financial services licensing already being touted.
Corporate regulator's funding slashed
14 May 2014
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6 minute read
In Tuesday night's Budget, the government indicated it would achieve $120.1 million in savings over five years by reducing funding to ASIC – starting with a reduction of $26 million in 2014/2015.
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"ASIC will adjust its priorities to ensure it continues to meet its statutory objectives," according to the Budget papers.
"The savings from this measure will be redirected by the Government to repair the Budget and fund policy priorities," it said.
ASIC's average staffing level for 2014/2015 is estimated to reduce by 209 from 2013/2014 levels, falling from 1,782 to 1,573.
Speaking to AccountantsDaily's sister publication InvestorDaily, Financial Planning Association general manager for policy and conduct Dante De Gori said the industry will be watching ASIC closely to see how the regulator responds.
ASIC could react by raising its licensing fees to meet any funding shortfall, said Mr De Gori.
"There's been talk about user-pays models and changing the funding model around for licensees and financial planning businesses," he said.
Funding cuts inevitably lead to staffing cuts, he added.
"The question is which divisions in ASIC they're cutting those resources from – and what direct impact, if any, it will have on the financial planning sector," said Mr De Gori.
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