While the government pushes ahead with plans for corporate tax cuts, the federal regulator charged with keeping those businesses in line, the Australian Securities and Investments Commission (ASIC) will get cuts too — to its funding.
Buried in the budget papers, the AFR discovered ASIC’s budget will be cut by 7.5%, or $26 million, less than a month after details of AMP deceiving the corporate watchdog emerged at the financial services royal commission.
The AFR says the cut over the next three years, could force new ASIC boss James Shipton to shed 30 investigators at a time when the regulator is expected to be heavily involved in the findings of the royal commission.
The cuts claw back a substantial proportion of the much-touted $121 million in additional funding provided to ASIC by Treasurer Scott Morrison two years ago in response to the Murray Inquiry into financial services. That money for a “tough and vigilant cop on the beat” was cited by the government as recently as a fortnight ago as proof on its support for the corporate watchdog. The funding came from a levy on the banks rather than taxpayers.
At the time Morrison said the funding “will increase ASIC’s effectiveness in detecting and responding to misconduct”, as calls for a banking royal commission began to grow.
The 2018 budget featured plans to give ASIC an extra $10.6 million over two years, along with $2.7 million going to Australian Prudential Regulation Authority, but that money is also coming from industry levies.
With the annual 1.5% “efficiency dividend” imposed on government departments in recent years now winding down, there were few places for Treasurer Scott Morrison to claw back funds in the 2018 Budget.
However, policing and enforcement seems to be a popular target in this budget.
The Office of the Director of Public Prosecutions will see its funding fall by nearly $4 million in two years to $73.75 million and the Australian Federal Police lose $77 million in four years. The Attorney-General’s Department is also expected to find $20.3 million in savings over five years from “improved targeting” of its spending as well as cost cutting.
Other savings revealed in the budget papers released on Tuesday night have been made through cuts to the ABC.
The broadcaster, a perennial whipping boy since the Coalition came to power on the promise of then PM Tony Abbott that there “would be no cuts”, will be forced to tighten its belt once again with it’s funding levels frozen for three years from July 2019.
It says that without indexation, that equates to an $84 million funding cut.
Managing Director Michelle Guthrie said the latest cap came on top of a cumulative $254 million in cuts imposed since 2014.
“Stable, adequate funding is essential if we are to continue to deliver for Australian audiences,” she said.
Guthrie added that a proposed efficiency review into the ABC was “unnecessary”.
A current freeze on international aid funding at $4.2 billion annually also continues until at least 2022-23 before indexation returns.
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