Treasurer Josh Frydenberg and Attorney-General Christian Porter has jointly announced that $35 million in extra funding has been allocated in the 2019-20 budget for the Federal Court of Australia to consider prosecutions for breaches of corporate law.
The funding boost will allow for the appointment of two judges and 11 registry and support staff, as well as the construction of new court facilities.
The announcement notes that criminal prosecutions for financial misconduct are currently heard in state courts and therefore have to compete with state cases for resources and scheduling.
“The expansion and funding will ensure that those who engage in financial sector criminal misconduct are prosecuted and face the appropriate punishment for their actions in a timely manner,” the announcement reads.
Mr Frydenberg and Mr Porter acknowledged the banking royal commission’s argument that “effective deterrence” of misconduct “relies on the timely instigation of proceedings”.
In the final royal commission report, commissioner Kenneth Hayne concluded that “the law was too often not enforced at all, or not enforced effectively”, after criticising the Australian Securities and Investments Commission (ASIC) for having “rarely” taken wrongdoers to court in his interim report.
One of his final recommendations was that when ASIC is considering any legal violation, it should ask the critical question: “Why not litigate?”
“Referrals arising out of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and increased enforcement activity as a result of the Australian Securities and Investments Commission’s shift to a ‘why not litigate’ approach are expected to give rise to more criminal prosecutions,” the Treasurer and Attorney-General’s joint announcement states.
“As such, the Coalition government is going beyond the recommendations in the final report to provide additional capacity within the Australian court system to allow matters to be heard and penalties for criminal breaches of the law to be handed out faster.”
The latest funding boost builds on the $9.9 million provided in November last year to the Federal Court to fund the appointment of additional resources to manage civil cases, and $41.6 million to the Commonwealth Director of Public Prosecutions to prosecute briefs from ASIC.
It also follows on from the passage of the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 in Parliament in February, which allows ASIC to impose harsher criminal and civil penalties for corporate and financial sector misconduct.
Tas Bindi is the features editor on the mortgage titles and writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.