Statement on the New Senate Inquiry into ASIC

The Senate has commissioned a new inquiry into the Australian Securities and Investments Commission (ASIC).

By continuously failing to apply the laws of the Commonwealth, ASIC is failing to meet its obligations as a regulator. The Hayne Royal Commission into the financial sector produced vast amounts of evidence highlighting ASIC’s failures. Too many Australians have been hurt by its persistent failure to enforce the law.

By establishing this new inquiry, the Senate is supporting consumers and small businesses. This inquiry will give Australians a voice. To date, the Parliament’s solution has been to pile more and more laws on the statute book. Canberra is addicted to new laws, but law enforcement does not appear to improve.

The Parliament needs to be accountable for the laws we make and form a stronger view on whether they are actually enforced. This inquiry is commencing as the Parliament considers new legislation to establish a compensation scheme of last resort. The new scheme is proposed as a subsidiary of the Australian Financial Complaints Authority (AFCA).

With AFCA’s significantly expanded mandate under the proposed compensation scheme, ASIC will be incentivised to undertake even less law enforcement. There will be a reduced incentive for ASIC to enforce the law as it will be able to lean on redress schemes for consumers where it fails to enforce the law.

It is time for a much closer look at ASIC’s law enforcement record and capability. ASIC must get better at its one job of law enforcement, or the integrity of our financial system is at risk.

I commend the Senate for taking this important first step to improve law enforcement in Australia.

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