The federal government will spend an extra $640 million to help rebuild trust in the financial sector, giving regulators the funds needed to crack down on banking misdeeds and creating a new jurisdiction of the Federal Court to tackle corporate crime.
It will provide the Australian Securities and Investments Commission (ASIC) with an additional $404.8 million for an accelerated enforcement strategy, an enhanced on-site supervisory capability for large institutions to deliver on its expanded role in relation to superannuation.
Meanwhile, the Australian Prudential Regulation Authority's (APRA) budget will be increased by $151.7 million to strengthen its supervisory and enforcement activities, including in relation to governance, culture and remuneration, and to enhance the regulation of superannuation funds.
The funding confirmed in the 2019/20 federal budget handed down on Tuesday will also support the expansion of the Banking Executive Accountability Regime to include all APRA-regulated entities.
Kenneth Hayne's Royal Commission into the sector found that too often conduct within financial institutions had either been illegal or fallen below the community's expectations.
"In this budget, the government is ensuring the financial system regulators have the resources they need to expand their capability to deliver on their new responsibilities and new enforcement and supervision approach," the budget papers said.
To ensure its reforms achieve lasting change, government will hold an independent inquiry in three years to assess whether industry has implemented the recommendations of the Royal Commission.
The coalition government also announced $35.5 million to expand the jurisdiction of the Federal Court to include corporate crime, while the Australian Financial Complaints Authority (AFCA) will jurisdiction to enable it to consider eligible complaints occurred since January 1, 2008 - the timeframe adopted by the Royal Commission.
Consumers and small businesses affected by misconduct will have access to a $36.1 million compensation pool for legacy unpaid external dispute resolution determinations, with government committing to establish an industry-funded compensation scheme of last resort.
