The folly of removing ASIC from the public service
The Public Service Act sets a high bar for the conduct of Government agencies and those who work within them and it would be folly to remove the Australian Securities and Investments Commission from the Australian Public Service, writes Mike Taylor.
In what represented something of a valedictory speech to the West Australian Chamber of Commerce and Industry the soon to retire chair of the Australian Securities and Investments Commission (ASIC), Greg Medcraft extolled the virtues of the regulator no longer being an Australian Public Service (APS) entity.
Suggesting the Government would soon move the legislation necessary to see ASIC personnel removed from public service employment, Medcraft also extolled the virtues of an industry funding model and noted that few, if any, ASIC employees had actually been recruited from the public service.
It was clear from Medcraft’s comments in Western Australia that he has little experience in and little knowledge of the Australian Public Service and the value that can be delivered by Government entities funded under the Budget process and staffed by people who have a capacity to make fearless judgements unfettered by commercial considerations.
There are good reasons why financial services regulators ought to remain substantially funded out of the Budget and why regulatory personnel ought to remain subject to the requirements of the Public Service Act. ASIC is not a Commonwealth corporation. It is a regulator and it should be structured and funded accordingly.
Before pursuing his agenda, Medcraft would have done well to consider the stated objectives of the Public Service Act 1999 and how well they fit with what ought to be public expectations of a Commonwealth regulator.
In particular, he might have noted that the main objectives of the Act are:
- To establish an apolitical public service that is efficient and effective in serving the Government, the Parliament and the Australian public;
- To provide a legal framework for the effective and fair employment, management and leadership of APS employees;
- To define the powers, functions and responsibilities of Agency Heads, the Australian Public Service Commissioner and the Merit Protection Commissioner; and
- To establish rights and obligations of APS employees.
There is nothing the consultants are likely to write into the charter and objectives of an ASIC withdrawn from the umbrella of the APS that is likely to deliver the same level of certainty around how both the regulator and those working within it perform their functions and the consequences if they do not.
It is greatly to be hoped that when the Government introduces the legislation necessary to remove ASIC from the terms of the Public Service Act, it is not simply rubber-stamped by the Parliament. The implications of the move need to be fully investigated and debated.
Somewhat typifying his tenure as ASIC chair, Medcraft had no hesitation in claiming substantial ownership of the changes which are being wrought on the regulator including the industry funding agenda and removal from the public service.
It should follow that he must own whatever shortcomings eventually emerge.
Perhaps, though, some of the more thoughtful heads in the Parliament might seek to temper the outcome.
Recommended for you
In this week’s special edition of Relative Return Insider, we bring you outgoing Financial Services Minister Stephen Jones’ keynote from Momentum Media’s Election 2025 event, followed by a Q&A focused on the Delivering Better Financial Outcomes reforms.
In this week’s episode of Relative Return Unplugged, Dr Vladimir Tyazhelnikov from the University of Sydney’s School of Economics joins the show to break down the shifting sands of global trade dynamics and attempt to understand the way US President Donald Trump is employing tariffs.
In this week’s special episode of Relative Return Unplugged, we present shadow treasurer Angus Taylor’s address at Momentum Media’s Election 2025 event, followed by a Q&A covering the Coalition’s plans for the financial services sector.
In this week’s episode of Relative Return Unplugged, AMP chief economist Shane Oliver joins the show to unravel the web of tariffs that US President Donald Trump launched on trading partners and take a look at the way global economies are likely to be impacted.
