PARLIAMENTARY JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL SERVICES
23 March 2022
The Hon Josh Frydenberg MP
Treasurer
Dear Treasurer
Scheme for Compensation for Detriment Caused by Defective Administration (CDDA)
I write about advice from Treasury that it considers the Treasurer is unable to authorise ASIC to decide claims under the CDDA scheme.
The committee questioned ASIC about these matters at a public hearing on 27 August 2021, and subsequently convened a public hearing on 16 November 2021 with ASIC, Treasury, and the Department of Finance to pursue these matters further. The committee also received answers to questions on notice from these agencies (numbers 259 to 261, 270 to 279 and 331 available at https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/No1of46thParliament/Additional_Documents).
The committee accepts the advice from the agencies that the authorisation from the then Assistant Treasurer to ASIC to decide claims under the CDDA scheme lapsed upon the change of office holder. The committee notes the difference between authorisations and delegations and understands this is an appropriately conservative and prudent interpretation of the advice received.
The committee notes the advice from Treasury that it considers the Treasurer is unable to authorise ASIC to decide claims under the CDDA scheme and notes this represents a change in position which contradicts the practice in previous years. The committee also notes that Treasury’s advice that the Treasurer is unable to decide claims against ASIC under the CDDA scheme has failed to adequately address the question as to why the Treasurer cannot do so and simply pay any compensation from consolidated revenue, thus avoiding a direction to ASIC to pay compensation.
However, the committee recognises that the Treasurer cannot be compelled to make such a determination and that it is within the province of Executive Government to decline to make determinations under the CDDA scheme, or to instead direct claims to the Act of Grace scheme.
The committee considers that it is desirable as a matter of policy and practice in the future that ASIC can be authorised to receive and consider claims under the CDDA scheme.
Accordingly, the committee recommends that the Government make such legislative or policy changes as are necessary to overcome any barriers to any Treasurer in the future authorising ASIC to determine claims under the CDDA scheme.
The committee proposes to include this correspondence as an appendix to its ASIC Oversight report, No. 1 of the 46th Parliament.
Yours sincerely
The Hon Tony Smith MP
Committee Chair