The Australian Securities and Investments Commission (ASIC) will receive an additional $13.4million in funding over four years in this year’s Budget. The additional funding will be for the James Hardie Taskforce, the continuation of two enforcement actions and the implementation of the United States (US)-Australia Audit Regulation Programme.
ASIC will receive $3.1 million in 2005-06 to fund fully the dedicated James Hardie Taskforce, which was established in late 2004 to investigate matters arising out of the James Hardie Special Commission of Inquiry. The funding will facilitate an early and comprehensive investigation of the complex issues that have been raised in this case. Initial funding of $4.3 million for this purpose was provided to ASIC in 2004-05 through Additional Estimates.
ASIC will also receive $4 million in 2005-06 to continue the investigation and litigation work relating to One-Tel and Offset Alpine Printing, without adversely affecting its broader enforcement programme. Initial funding of $3.2 million for this purpose was provided to ASIC in 2004-05 through Additional Estimates.
In both these cases, well-resourced defendants have initiated costly appeals and challenges to ASIC’s powers and processes. These tactics may have been adopted with a view to ‘pricing out’ the regulator. Failure to proceed with these matters could have an adverse impact on community confidence in administration of the national corporations scheme, and lead to a perception that wealthy defendants may avoid sanctions under the Corporations Act 2001.
ASIC will be provided with $6.3 million over three years to implement the US-Australia Audit Regulation Programme. The programme will ensure that Australian auditors that are registered with the US Public Company Accounting Oversight Board (PCAOB) and their Australian audit clients that are registered with the US Securities and Exchange Commission can be regulated, as far as possible, solely by ASIC in relation to the audit requirements under the Australian and US regimes.
This will reduce the regulatory burden and eliminate duplicated processes relating to audit inspections, thereby facilitating access to US capital markets.
The programme will require some amendments to the Australian Securities and Investments Commission Act 2001 to support the proposed cooperative audit arrangements between ASIC and the PCAOB. This funding will be subject to review in the 2007-08 Budget.