four corners, page-4

Amen John.

It looks like reform is finally on its way.( below)


THE future of the corporate regulator is among a number of surprise recommendations in the National Commission of Audit, which called for an overhaul of its structures and responsibilities just weeks after a float of the company’s registry business was mooted by the government.
The Australian Securities & Investments Commission’s consumer protection functions would be transferred to the competition watchdog under the audit commission proposal, while its cash-cow registry business would be transferred to the Australian Taxation Office.
The recommendation is among a number targeted at slashing industry assistance, closing or merging agencies, rationalising grants and cutting and targeting R&D spending by the government. The recommendations have set up several battles for the government ahead of the federal budget in two weeks, with affected parties surprised to see themselves targeted and arguing against the proposal.
The proposal was not included in the formal list of 86 recommendations of the audit commission but featured in an appendix among the five volumes of analysis and recommendations, and took observers by surprise.
“The functions of the Australian Securities & Investments Commission, particularly areas of overlap with the Australian Prudential Regulation Authority and the Australian Competition & Consumer Commission, should be considered in the context of the Financial System Inquiry,” the report says.
“In the meantime, the registry functions of the Australian Securities & Investments Commission should be transferred to the Australian Taxation Office, its consumer protection functions transferred to the Australian Competition & Consumer Commission and its financial literacy functions should cease.”
The Australian reported last month that the government was considering privatising ASIC’s corporate register, said to be worth $1 billion or more. But that registry business was not included on the list of government entities that the commission said should be sold for a mooted $13bn, including the Snowy Hydro Scheme, Australia Post and the Australian Submarine Corporation.
ASIC chairman Greg Medcraft described it as a “technology business’’.
It collects $535 million a year from company registration and reporting fees and another $90m in fees for company searches.
It is the unofficial funding base for ASIC, although those revenues are taken into consolidated revenue from which the government pays the $395.9m annual running costs and $180.8m in ¬administered expenses of the regulator.
Most other countries do not have the registry business tied to the corporate regulator and a split is considered a logical move to bring ASIC into line with global practice and allow it to concentrate on its regulatory powers.
ASIC’s consumer protection responsibilities have been steadily increased over the years since the Wallis Inquiry into the financial system, which began the process of aggregating responsi-bilities between states and several federal bodies, including the Reserve Bank of Australia.
ASIC declined to comment.
The commission has recommended sweeping changes and deep cuts to government spending to restore a surplus and treasurer Joe Hockey said business would need to bear a fair share of the burden.
The commission recommended closing or merging 22 agencies including Austrade and the Export Finance Insurance Corporation, Tourism Australia and the Clean Energy Finance Corporation, as well as cutting company-specific programs such as the Cadbury Factory and General Motors assistance schemes.
It recommends abolishing the Innovation Investment Fund that provides matching funds for venture capital investment, Commercialisation Australia and the Co-operative Research Centres programs and a reorganisation of the priorities of the CSIRO, the nation’s biggest research body.
The commission said the government should not be providing assistance that benefited specific companies or industries without wider benefits to the economy and should only provide funding where there is a genuine market failure.
The proposals have already attracted a range of criticism from the Business Council of Australia and the venture capital industry, which said the cuts could undermine the ability of the country to regenerate jobs being lost in manufacturing and mining as the investment boom recedes.