Labor would erode ASIC’s effectiveness: Pearce

The federal opposition’s intention to reduce the funding to the Australian Securities and Investments Commission (ASIC) by $130 million would mean financial market criminals would have a “field day”, according to the Parliamentary Secretary to the Treasurer Chris Pearce.

“ASIC performs a vital role ensuring that all shareholders, from sophisticated large investors to mum and dad investors, can have confidence in the integrity of the marketplace. Labor’s incompetence would decimate ASIC’s capacity to perform that role. Labor is a menace to the economy and to the financial prosperity of all Australians,” Pearce said.

Labor’s proposed move to cut ASIC’s budget is in direct contrast to that of the Federal Government, which has increased the budget for the financial services regulator from $128 million in 1995-96 to $265 million for the current financial year.

Pearce believes Labor’s attitude towards the corporate watchdog is totally inconsistent.

“On the one hand we have Mr Tanner implying ASIC is bloated and wasteful and can do without $130 million. On the other hand we have Senator Wong, who has welcomed increases to ASIC funding as recently as mid-2006. Which Labor spokesperson are we meant to believe this time?” Pearce said.

The Parliamentary Secretary to the Treasurer cited the move as an indication the leader of the opposition lacked an understanding of fiscal issues.

“It is remarkable that Mr Rudd would endorse such a contradictory approach to fiscal policy. Labor’s policy is to maintain our corporate watchdog capabilities, but now Mr Rudd endorses a crippling $130 million reduction to ASIC’s budget. Mr Rudd has been caught out misunderstanding fiscal matters, yet again,” he said.

Pearce added the move to reduce the regulator’s budget would put its enforcement activities at risk when incidences such as the HIH collapse had justified a need for a greater level of funding.