It’s the information age, and yet the Australian Securities and Investments Commission (ASIC) still charges Australians hefty fees to access company information that’s part of the public record – and takes just seconds to provide electronically. How much longer can this go on?
By David Walker
As little as 25 years ago, you could fairly easily justify the fees a government charged for access to a document like a company’s financial report. Someone had to physically haul it out, copy it on a device the size of a washing machine, then push it over a counter to you.
The internet has changed almost all of that. Today, a web server searches its hard drives for a couple of milliseconds and sends an electronic copy for you to download in your web browser.
The process and format of information may have changed almost beyond recognition, but in Australia at least, one thing remains: the fee.
What are we paying for?
The Australian Government does not report the cost of operating the ASIC registry, but the search fees were designed for a different era – one when people needed paper documents.
By putting the documents on a web server, the government removed most of the costs of delivering them to users.
“Once the information is lodged with ASIC, it’s there on public record. It should really be accessible by all members of the public. To put a price on it creates an unnecessary wall.” Ram Subramanian, CPA Australia
That hasn’t stopped it from trying to make a buck from the records. The government had a controversial plan to sell ASIC’s companies register to a private operator; following lobbying by stakeholders including CPA Australia, it ditched that plan at the end of 2016.
Now, an Australian Treasury document proposes cutting search fees for accessing company roles and relationship extracts from A$40 to A$19, and exempting journalists from paying some registry search fees. However, other fees stay in place. As an example, Australia’s federal government has no plans to make any cut to the current A$40 fees for obtaining financial reports from ASIC.
Helping businesses work better
As the Treasury considers the price of access to company information, CPA Australia is campaigning to remove the charges for publicly available ASIC documents.
CPA Australia policy adviser Ram Subramanian notes that financial reports let people – creditors, credit agencies, researchers, members of the general public – discover the nature of the entities they are dealing with. Doing so aids trade and the flow of capital.
Having free access to this sort of financial data doesn’t just cut business costs, it also adds information that helps small and medium businesses work better. “Once that information is lodged with ASIC,” says Subramanian, “it’s there on the public record. It should really be accessible by all members of the public. To put a price on it creates an unnecessary wall.”
CPA Australia’s submission
to Treasury spells out four reasons for making downloads of financial reports free.
- It makes financial activities of businesses more accessible. When basic information relevant to potential suppliers, partners, customers and the like is free, businesses can clearly see who they are dealing with. Armed with that information, they can make better-informed economic decisions. They can act more like the fully informed entities that economic theory often assumes they are.
- Financial reports help businesses to meet regulatory obligations such as the customer due diligence required by anti-money laundering laws.
- It cuts down the risk of illegal “phoenix” activities, such as the creation of a new company to continue the business of a company that has been deliberately liquidated to avoid paying its debts.
- It helps researchers and analysts to better understand Australian businesses and the economy through macro-level research and analysis.
Information for the small group of ASX-listed companies is already freely available – but through the ASX, not the ASIC registers. Company searches in New Zealand, the UK and the US are generally free, too. Based on the price list maintained by global business register Kyckr, they cost a lot less in Estonia (US$12.45), Ireland (US$8.33) or Denmark (US$13.88) than Australia’s A$40.
In June 2014, the Australian Senate’s Economic References Committee took a look at the situation and declared that “the fees currently charged to the public for accessing information held by a government body are too high”. In 2018, the political campaigning organisation GetUp! calculated that Australia had the highest fees in the world for access to financial reports.
Missed opportunities for change
Public organisations like ASIC have another even greater incentive to cut the cost of financial information – it often becomes more valuable when it becomes free or very cheap.
Nick Gruen, one of Australia’s leading experts on the economics of information, says governments should always make a strong presumption in favour of releasing government data without charge. In general, he says, making things free tends to spark activity you didn’t expect and advantages you could not foresee.
In March 2014, Malcolm Turnbull, then communications minister, echoed this philosophy. “[A]s matter of principle, I don’t think the government should be charging the public for data,” he said. “Really, the productivity benefits from making data freely available are so much greater than whatever revenues you can generate from them.”
As prime minister, Turnbull never got around to enacting that philosophy. However, the Treasury has since acknowledged that it’s in line with the government’s Public Data Policy Statement, which says that “publishing, linking and sharing data can create opportunities that neither government nor business can currently envisage”.
Why, Subramanian wonders, should we wait any longer to slash the charges for ASIC’s data?
Why ASIC needs to make financial reporting data free