Queensland’s
threat to withdraw its support for the Federal Corporations Law sparked
treasurer Peter Costello to warn this would make Australia’s nine sets
of laws more costly and complex than the whole of Europe. However, what
Costello failed to mention is that since the Feds got control of the
Corporations Laws, ASIC has become a profit centre, pulling in more
than $400 million a year in revenue while costing less than $180
million a year to run.

Crikey blew the lid on this rort last July as you can see here when we wrote:

Ever
heard of a regulatory body which generates hundreds of millions a year
in surplus revenue? Look no further than ASIC which gouges Australia’s
big and small business alike and has handed over more than $1.5 billion
in surplus revenue to the Howard Government’s budgets since 1996.

Crikey
seems to receive a never ending stream of penalty notices and fees from
ASIC (we got slugged another $500 this week over some form that wasn’t
submitted on time) which prompted us to look into this and it appears
the government surplus is $1.55 billion over the eight years from
1995-96 to 2002-03 – an average windfall of $193 million a year.

In
the handover year of 1995-96, the surplus was only $130 million but you
can trust the hypocritical Howard Government to slug their friends in
business because this surged to a record $232 million by 2002-03 – an
increase of 77% which is well above nominal economic growth of about
50% over the same period.

This table demonstrated ASIC’s highway robbery:

Financial year 1995-1996 1996-1997 1997-1998 1998- 1999 1999-2000 2000-2001 2001-2002 2002-2003 Total
Total expenses ($m) 145 132 135 145 143 143 160 173 1,175
Gross Revenue ($m) 275 298 326 332 361 348 383 405 2,728

Revenue
transferred to the Commonwealth is a gross figure. Page 81 of the
2002-03 annual report says, “ASIC collects and administers revenue
under the Corporations Act 2001 and prescribed fees set by the
Corporations (Fees) Regulations. The revenues from these fees are not
available to ASIC and are remitted to the Official Public Account”.

However,
if Peter Costello is going to complain that the states haven’t cut
promised taxes on the back of GST revenue, surely the states could hit
back by accusing Canberra of turning the Corporations Law into a new
Federal profit centre, which is completely against the spirit of the
1991 agreement.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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