The Federal Government has promised ASIC additional funding in the next four years.

ASIC Chairman David Knott has welcomed the Federal Government’s budget, saying the increased funding “will substantially improve ASIC’s capacity to respond to current market circumstances.”

Mr Knott says the funding is “a recognition of ASIC’s increased workload” in light of the introduction of the FSRA.

ASIC will get total funding of $158.4 million – including a new allocation of $19.3 million – in 2002/03. Of that amount, $11.9 million has been allocated to cater for the FSRA workload. Mr Knott said it’s a “substantial increase” over last year’s allocation.

The remaining $7.4 million will be for general enforcement activity. 

In an address to accountants in Perth, Mr Knott said the recent  “extraordinary spate” of corporate failures is the result of many factors, including complacency.

 “We had entered a period of complacency about corporate governance after many years of sustained growth and our own remarkable survival of the Asian financial crisis,” he said.

“The seeds of failure were planted a long time ago and have flourished undetected,” he said.  “Buried problems” were brought to the surface through the changing market in 2000. Some other reasons: management neglect and misconduct combined with the failure of accounting and auditing.