In a statement meant to “correct the record” on ASIC business registry search fees, Financial Services Minister Kelly O’Dwyer has effectively admitted that the fees are collected purely to line the government’s pockets.
Ms O’Dwyer issued a statement late on 3 July, which she said was meant to correct recent media reports that suggested the fees “were a source of funding for ASIC’s regulatory work”.
In the statement, she claimed that “recent media reports that characterise ASIC’s business registry function as fee gouging are misleading and incorrect”.
However in the same statement, Ms O’Dwyer went on to say that “the fees generated from use of the business registries are collected by ASIC on behalf of the government and paid into consolidated revenue”.
My Business was curious to understand the minister’s definition of fee gouging or revenue raising, if it’s not charging fees to access publicly-held information purely for profit and not to directly cover the cost of providing such services.
And whether such fees amounted to a cash grab against SMEs, given they are potentially the most likely to search this data as part of their credit checks on would-be suppliers and customers.
A spokesperson responded by suggesting that the fee for usage model is no different to using a toll road — you can disagree with whether the toll amount is fair, but ultimately your only choice is whether to pay the toll or find an alternative route.
It should be noted that the fees for ASIC’s business register were not introduced by the current government.
As the ASIC website shows, fees vary between $9 and $43 for each search when conducting company and business name searches, depending on whether they are conducted online or by mail.
Searching banned and disqualified persons, and other information on individuals, can only be conducted by mail. Most professional registers are free.
Ms O’Dwyer’s original statement has been posted below in full:
Recent media reports that characterise ASIC's business registry function as fee gouging are misleading and incorrect.
The business registries that are maintained by ASIC are government-owned infrastructure. Individuals and businesses that use the registry infrastructure pay a fee for that use. The fee is payable for access to the register, not for any service provided by ASIC.
It has been long standing practice that fees for use of the registry infrastructure are levied on individuals and businesses. The last wholesale change to the registry fees occurred in July 2010, when the then Labor government introduced CPI indexing for the registry fees.
The fees generated from use of the business registries are collected by ASIC on behalf of the government and paid into consolidated revenue. The government directs the revenue collected to a range of initiatives that benefit all Australians, including education spending and social welfare.
Contrary to recent reports, the business registries are not a source of funding for ASIC's regulatory work. In response to a recommendation of the Financial System Inquiry, the Turnbull government has legislated to provide industry funding for ASIC — to ensure that the cost of regulation is borne by those who create the need for it, rather than Australian taxpayers.
ASIC's collection of fees on behalf of the federal government for use of the registries is similar to other government agencies, including the land titles offices in the States and Territories, that also charge fees for public access to government-owned infrastructure such as land titles registries.
The claim that ASIC’s permanent funding has been cut is also incorrect. A proportion of ASIC’s funding is project driven and when these projects come to their natural end, the funding for them also ends. The government considers the provision of new funding for new projects on a case-by-case basis. Where funds are appropriated by government to ASIC, they will now, for the first time, be recovered from the relevant industry subsector.
Adam Zuchetti is the editor of My Business, and has steered the editorial direction of the publication since the beginning of 2016. Before joining My Business, he worked on fellow Momentum Media titles The Adviser and Mortgage Business.
The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Adam has written across both consumer and business titles, including for News Corp Australia and Domain.