Treasurer Scott Morrison announced extra funding for Australia’s securities regulator to strengthen oversight of the nation’s banks as the government sought to neutralise opposition demands for a sweeping inquiry into the financial sector.
The Australian Securities & Investments Commission (ASIC) will receive an extra $127 million, mostly paid for by a levy on banks, Morrison told reporters today. A new commissioner will be appointed to focus on prosecutions, and Chairman Greg Medcraft’s term will be extended by 18 months.
With an election expected on July 2, Prime Minister Malcolm Turnbull’s government is seeking to defuse the opposition Labor Party’s demands for a royal commission into banks that may get traction with voters. Trust in the sector has been eroded due to poor financial advice offered by banks, and ASIC is taking civil proceedings against Westpac Banking Corp. and Australia & New Zealand Banking Group Ltd. for allegedly manipulating one of the nation’s benchmark interest rates.
The government is ensuring ASIC has “resources that are necessary to get the job done,” Morrison told reporters, adding it is vital the financial system has integrity. The government is also recommending that people with complaints against banks have easier access to the Financial Services Ombudsman.
ASIC will get an additional A$61 million to enhance its surveillance and data analytics capabilities. It will also get an extra $57 million for increased enforcement and surveillance in areas including financial advice, responsible lending and life insurance.
Labor leader Bill Shorten is pledging to hold a royal commission into Australia’s banks should his party win the election. The move was backed by 65 percent of respondents in a Fairfax-Ipsos poll published Monday.
Turnbull’s government argues a royal commission would merely be a feast for lawyers, and says the money is better spent on boosting ASIC’s powers.