Foreign jurisdictions are reaping rewards from making financial reporting data free. In Australia, everyone pays but at the end of the day, no one gains.
Thirty-nine dollars is the current cost of downloading an annual financial report from the Australian Securities and Investments Commission (ASIC) website.
Of course, this is hardly news to those who access company financial data from ASIC. The index-linked fees were legislated under the Corporations Act 2001 many years ago.
What may come as a surprise is the fact that access to the same type of financial information in New Zealand, United Kingdom and United States is completely free.
To make matters worse, last year the Federal Government decided to put out to tender the operation and upgrade of the ASIC Registry. Private-sector applicants were offered an “opportunity to unlock value through a number of potential growth opportunities including the development and sale of new products and services” arising from the operation of the ASIC Registry, including company financial reports.
Thankfully, following vociferous lobbying from stakeholders including CPA Australia
, the government shelved the initiative.
The UK example of access to financial reports
Until last year, the UK also charged a fee for access to company financial information. The contribution to the UK Treasury in the 2013/14 year was £8.7 million. The UK Government, however, made a strategic decision to forego this revenue source to aid corporate transparency and boost the country’s economy.
In the words of then Business Secretary Vince Cable: “The government firmly believes that the best way to maximise the value to the UK economy of the information which Companies House [ASIC equivalent] holds, is for it to be available as open data. By making its data freely available and free of charge, Companies House is making the UK a more transparent, efficient and effective place to do business.”
Australia has a policy disconnect
The Australian Government has also made similar commitments on open data. Its Public Data Policy Statement states that Australian Government entities will “make non-sensitive data open by default to contribute to greater innovation and productivity improvements across all sectors of the Australian economy”.
It also states, “where possible, make data available with free, easy-to-use, high quality and reliable Application Programming Interfaces (APIs)”.
However, there appears to be a disconnect between the government’s policy in relation to open data and its approach to placing certain information held on the ASIC Registry behind a legislated paywall.
When announcing the decision to remove fees on company information, the UK Minister of Cabinet Office Francis Maude said: “The UK is an international leader in open data because it sharpens accountability, exposes waste and informs choice over public services.
“It is also the raw material of our age, providing opportunities for entrepreneurs to create new data-led businesses and fuel growth as part of this government’s long-term economic plan.
“Today’s announcement underlines our commitment to ensuring that data of most value to citizens and businesses is released and is as widely accessible as possible.”
There is no reason why the same benefits would not arise in Australia by taking a similar approach to countries such as the UK. Yes, it is true that the government generates significant income from the charges levied for providing data through the ASIC company register.
However, the benefits to the Australian economy in the long run are likely to far outweigh the loss of income currently generated.
In fact, as Malcolm Turnbull said in 2014 when he was Communications Minster: “Obviously these are tough and troubled times from a budgetary point of view – and there will be all sorts of contractual issues – but really, the productivity benefits from making data freely available are so much greater than whatever revenues you can generate from them”.
The benefits of free access to ASIC’s company register
CPA Australia’s submission to the Treasury consultation on modernising business registers highlights some of the benefits that can arise from free access to the ASIC company register, including:
- Improving the probability of business success as ready and free access to financial and other information about suppliers, customers and other entities should assist businesses make more informed decisions on who they should interact with
- Reducing the risk of phoenix and other similar activity
- Assisting business meet certain regulatory obligations; for example, undertaking customer due diligence under anti-money laundering legislation
- Allowing for a deeper understanding of Australian businesses and the economy through macro-level research and analysis of such data.
The ACNC free access example
There is already evidence of the benefits of free access to information held on a government registry. The data registry charity information held by the Australian Charities and Not-for-profits Commission (ACNC)
is freely available and it is understood that the ACNC charity datasets available from the data.gov.au website are one of the most popular downloads in recent times.
Enabling free access to ASIC company financial information is a policy decision that the Australian Government should make after undertaking a cost/benefit analysis to assess the economic impact of such a change.
There is also a need to ensure the technology behind ASIC company data is fit-for-purpose for the digital age.
At present, there is limited interaction between government data registers such as the Australian Business Register, the ACNC charity register and the ASIC data registers.
This needs to be fixed as part of an overhaul of the technology used to host the data and to allow a seamless and efficient interaction between providers and users of the data.
The government’s commitment to open data and data-driven innovation has been clearly stated – now is the time for action to support this commitment.
Ram Subramanian is a policy advisor at CPA Australia.
The push to improve communication in financial reporting