Australia’s ‘corporate crime wave’
An ACTU report on regulatory enforcement claims that Australian regulators are fighting a “corporate crime wave” while facing funding cuts.
The report, “Corporate Malfeasance in Australia” was released in May, prepared by The Australia Institute and commissioned by the ACTU.
Based on publicly available data, it finds that 5,000 matters are brought before the courts involving organisations (mainly companies) as defendants each year and that, on average, around 4,000 are found guilty.
The ACTU is advocating for a national Independent Commission against Corruption to fight corporate crime. It also wants a Royal Commission into the banking and finance sector.
According to the Report, based on the ACCC’s press releases, over the last 10 years the ACCC has taken action against 669 companies: 167 for competition issues, 489 safeguarding consumers and against unfair trade and 13 others.
ASIC, the ATO, the Fair Work Ombudsman, the Fair Work Commission and the Australian Bureau of Statistics also received score cards. The devil is, however, in some of the detail, as the Report surveys the regulators and agencies across differing time periods, using a range of parameters and criteria. For instance, the Report highlights how often certain companies may “engage with” the ACCC, without making explicit that this can occur for a number of reasons, many of which will be for benign business-as-usual reasons and not indicative of any wrongdoing.
The Report came out the day before the Government announced its agency resourcing in the Budget. The ACCC will receive slightly more funding than in FY2015-16, after taking into account a one-off special appropriation that has not been repeated. While the ACCC looks set to retain the same staff numbers for the coming year under the Budget, the Report claims that since the Coalition took office three years ago, the ACCC has lost 10% of its staff, ASIC 14% and the ATO 16%. Overall, the Report states that the regulators and agencies that monitor corporate malfeasance have had staffing cut by 3,962 people (or 14.9%) between the numbers budgeted for 2013-2014 and for the present 2015-16 year.
Despite lower staff levels, this hasn’t stopped the ACCC obtaining $40 million in penalties just last week alone. You can read our post on the ACCC’s big week of penalties here.
The Government was also busy last week, releasing (amongst other things) the second Australian Consumer Survey on consumers’ and business’ experience of the Australian Consumer Law since its introduction on 1 January 2011. We will be writing about the survey soon, but note that its findings will help identify areas to improve in Australia’s consumer policy framework and will provide evidence to inform the ACL Review which the Government announced on 31 March.