Australia's corporate watchdog ASIC has been hit with a “shock” $26m budget cut and reduced staff numbers amidst ongoing revelations of misconduct in the banking, superannuation, and financial services industry at the Hayne royal commission.
The agency cuts will see ASIC's funding drop from $346m to $320m and its staff slashed by 30 investigators by 2021.
Finance Minister Mathias Corman said the government would not make further commitments beyond the additional $10.6m fund injection for the royal commission and the $121m boost for the Murray inquiry into financial services, until the royal commission's findings have been released, The Sydney Morning Herald reported.
"We provided additional resources to ASIC last year and since then the royal commission has been initiated," Cormann said. "Of course, once the royal commission reports, the government will consider any findings and recommendations and make further decisions at that point."
Kelly O'Dwyer, Financial Services minister, denied that ASIC funding had been reduced.
"Twenty per cent of ASIC funding is project driven, so funding and personnel fluctuates from time to time," O'Dwyer said. "ASIC is well-funded and resourced to undertake its important regulatory work."
Mark Dreyfus, shadow attorney-general, said now was not the right time to trim ASIC's funding.
"That’s a shocking decision for the government to have made at the very time when all of these problems are being exposed about the banks,” Dreyfus said. “This is not the time to be cutting ASIC.”
The budget cut comes even as the royal commission uncovers widespread misconduct in banking – from collecting fees for financial advice not provided and deceiving ASIC to charging dead customers, SMH said.