Australia’s corporate regulator delivered the Federal Government a record $1 billion effective profit last financial year, with small business owners footing the vast majority of the bill.
The revelations come as the Australian Securities and Investments Commission (ASIC) has this week attracted widespread criticism for refusing to take any action whatsoever against 10 former executives and directors of systemically corrupt casino operator Crown Resorts.
ASIC’s latest annual report shows it raised a massive $1.513bn in “fees and charges” for the Federal Government in 2020-21, but received just $437.1m back in government funding.
That’s a massive $1.078bn windfall – by far the biggest profit any government has extracted from the regulator in its three-decade history.
When created in 1992 (then the Australian Securities Commission), the regulator was to charge limited fees to the public to cover its operating costs.
Instead, the corporate regulator – which experts say is less effective than it has ever been – has been used to quietly extract an ever growing pool of cash from the public via hidden taxes.
Since its creation, ASIC fees and charges have exploded – mostly under the current Federal Coalition – with the regulator now extracting fees that are 3.7 times its total operating costs.
The “revenues” of ASIC, which is the responsibility of Treasurer Josh Frydenberg, have soared by over 60 per cent in the past four years alone.
ASIC’s 2020-2021 annual report shows “fees and charges collected for the Commonwealth” grew from $920 million in 2016-17 to $1.513bn in 2020-21.
In the year to June 2013, just before the Federal Coalition came to power, ASIC and cost $350m to run and earned the government $717m in fees and charges – roughly double.
In 2020-2021, ASIC cost $437m to run but delivered the government $1.513bn – 3.7 times more.
“Fee for no service”
The vast majority of ASIC’s “revenues” come from “fees and charges” it levies on small business owners for so-called “annual reviews” – which, it can be revealed, it doesn’t actually perform.
ASIC charges every Australian business (including every self-managed superannuation fund, as funds are required to register as a company) an “annual review fee”.
“Each year, we send your company an annual statement shortly before the annual review date,” ASIC states.
“Your annual statement will contain a statement of your company’s details (and) an invoice for your company annual review fee.”
Yet despite the misleading terminology, ASIC doesn’t actually conduct any “review”.
ASIC simply sends each company a statement, usually a single page, of its current details.
If those details, such as the company’s registered address, have changed, the company is required to contact ASIC to update its details – for another fee.
ASIC terms sending companies a brief statement about their own details an “annual review”.
Much has been made – including by ASIC – of Australia’s big four banks illegally charging customers “fees for no service”, where customers were charged for financial advice that was never delivered.
The “annual review” fees charged by ASIC, particularly given the wording and the way they are presented, similarly represent a “fee for no service”.