Government has handed the financial services regulator almost $6.7 million of extra funding in the latest budget to boost enforcement and conduct licensing powers.
The Financial Markets Authority (FMA) operational allocation rose from about $71.3 million in the previous fiscal year to almost $78 million for the 2025/26 period.
More than $3.4 million of the increase will support the “expanding legislative remit” of the regulator under the Conduct of Financial Institution (COFI) licensing with a further $3.3 million sheeted to “investigation and enforcement functions”, the budget says.
But the government has held the regulatory spending for ‘market analysis, investor awareness and regulatory engagement’ services steady year-on-year at almost $24.2 million.
Industry levies and fees cover about 84 per cent of the FMA budget.
However, the regulator has won a small increase in a separate pool of litigation funding that rises to just over $5.2 million compared to $5 million in the 2023/24 period.
Earlier this year, the FMA told parliament the $5 million legal aid was “now insufficient” to meet the costs of an increasingly busy caseload.
The FMA has a number of high-profile litigation actions underway including landmark civil cases lined up against Booster and InvestNow as well as a recent High Court pleading to determine certain powers over wholesale investment providers.
In total, the regulator has about $83 million to spend this fiscal year. FMA accounts for the 2023/24 annual period reported overall income of $80.7 million, comprising a government allocation of $71 million, litigation funding ($4.7 million), $1.5 million of interest and $3.3 million secured from court rulings.
Earlier this month Westpac was fined $3.25 million for misleading customers in a civil case pursued by the FMA with another action pending against general insurer IAG over alleged premium and discount pricing errors.
Despite the budget top-up, the FMA, headed by Samantha Barrass, has curtailed spending of late on the back of government-wide austerity pressures with at least 20 regulatory jobs at risk, the regulator confirmed this March.
At least the FMA got a raise, however, unlike the Retirement Commission and External Reporting Board (XRB) that will both have to make do on 2024 Crown revenues of $8.2 million and $8.3 million, respectively this financial year.
The budget also earmarks a further $500,000 to pay for the statutory management of the embattled Du Val group after racking up expenses of $2.35 million in the previous period.