November 3, 2020
The corporate regulator will be asked to explain how its leadership structure protects Australians, as a key parliamentary committee expresses growing frustration with the way the peak agency is run.
The move raises the prospect of sweeping changes to the Australian Securities and Investments Commission after an uproar over tax expenses forced its chairman, James Shipton, to stand aside.
The committee overseeing the regulator will call acting ASIC chair Karen Chester to a hearing on November 18 to consider changes to the regulator amid warnings from key Liberal MPs that its structure is not working.
The next hearing comes after Ms Chester told a Senate committee last week that she had not had a ‘‘full understanding’’ of the $118,000 tax expense for Mr Shipton or the $69,621 rental expense for deputy chair Daniel Crennan.
Mr Crennan resigned last week while Mr Shipton has stepped aside pending an independent review by Vivienne Thom, a former inspector-general of intelligence. Both are repaying the expenses.
The chair of the Parliamentary Joint Committee on corporations and financial services, Victorian Liberal Senator James Paterson, expressed frustration with the way the regulator was working. ‘‘I have thought for some time, and last week revealed, that the leadership structure at ASIC does not work,’’ Senator Paterson said.
A key issue is the way ASIC commissioners divide their responsibilities among themselves and focus on strategy, while the executive directors below them focus on enforcement.
Senator Paterson said the reporting lines were blurred, which could undermine enforcement.
Another committee member, Liberal MP Jason Falinski, said ASIC appeared to be bogged down in ‘‘regulatory sludge’’ when it should be doing more investigations into wrongdoing.
‘‘It is a classic example of an agency that has been captured by interests,’’ Mr Falinski said.
The criticism is a shift from the period several years ago when many government MPs defended the regulator while a relative few, such as former Nationals Senator John ‘Wacka’ Williams, challenged it over the treatment of bank and insurance customers.
Senator Paterson’s committee will hear from Ms Chester at a Canberra hearing on November 18, setting up a chance to ask her about structural issues and enforcement separately from the review into the tax and rental expenses.
The views in the Liberal party room may influence Treasurer Josh Frydenberg as he waits for Ms Thom’s review, which is due by the end of the year.
A third member of the parliamentary committee, NSW Liberal Senator Andrew Bragg, said he wanted ASIC to enforce the law rather than make policy.
‘‘At the moment there are too many commissioners and it is unclear who does what,’’ he said.
