Australian Credit Licensees in the "Intermediary" sector who received their annual invoice from ASIC for the Supervisory Cost Recovery Levy this week would have been in for a shock.
The fee this year for each and every Credit Rep authorised by the Licence has tripled from last year. If Licensees are passing the fees onto their Reps - as most do - they must add GST so the fee per Rep will be $202.74.
Why this 300% increase? It's because ASIC's sector spending in the 2021 financial year has increased 65% over the 2020 financial year. What did ASIC change in the Intermediary sector in 2021 that was so different from 2020? They didn't go visiting anyone - we were all working from home. We know they set up a lot of data collection from lenders and aggregators to see how they could monitor with that data. They produced a great Regulatory Guide on Best Interests Obligation. However, that can't account for 65%.
If they want to blame COVID, which is likely, many of us experienced changes too. There weren't overly dramatic costs involved in setting people up to work from home. So don't try that one.
The worst of this is the accountability. A 65% hike in expenditure is bad enough in itself but we're not even sure ASIC knows which numbers it's supposed to be using.
Try following this:
- In November 2021, ASIC released its annual Cost Recovery Implementation Statement (CRIS).
- At page 49 of the CRIS, it states that total costs to recover will be $7.699 million.
- At the table at page 54, where the CRIS provides indicative levies, the costs to recover have inexplicably jumped to $8.153 million. Nearly half-a-million dollars in five pages with no explanation.
- The ASIC Media Release in November 2021 states that the final figures will be made available in December 2021 and invoiced in January 2022.
- In December 2021, the "final" worksheet is published. Curiously, the date at the top of this sheet is "November 2021". Did this sheet already exist at the time of the release of the CRIS?
- On the final worksheet, the costs to recover for the Intermediary sector have now climbed to $11.362 million - an increase of 48% over page 49 of the CRIS and an increase of 39% over page 54 of the CRIS.
So, we have three vastly different numbers, possibly all produced at the same time albeit with one published one month apart. Which is it, ASIC? $7.699 mil? $8.153 mil? Or $11.362 mil?
Who is accountable for these numbers? Who is independently auditing them? If the higher figure is, indeed, correct, how was it so grossly underestimated in the CRIS and how on earth does ASIC justify a 65% expenditure increase over the previous financial year when it barely did anything visible in the sector?
Someone needs to answer these questions.