Commission does better than expected

The Securities Commission was originally expected to carry out its increased powers without a funding increase, but in the end got more money from the Government than it expected.

Papers obtained under the Official Information Act show something of a battle by then commission chief executive John Farrell to get more money from Minister of Finance Michael Cullen in this year’s Budget round.

The commission received an extra $7.7 million spread over four years – a tiny sum in terms of most government expenditure, but still much larger than the initial suggestion of just over half a million dollars in new spending.

The documents also show the breakdown of the extra $7.7 million includes an extra $844,000 a year for a separate litigation fund.

The commission told ministers in September that the reforms already announced by the government would result in a considerable increase in workload.

The new rules and roles for the commission would require an extra five staff at roughly $80,000 each in salary, ministers were told, as well as new office space to house those staff and ancillary furniture and equipment.

"To a large extent active surveillance and monitoring of marketplace activity will be a new role for the commission, but an essential one in the context of the reforms agreed by [the] government," Farrell wrote in a memorandum to the Treasury on the Budget negotiations.

The papers also reveal some tension between the commission and Ministry of Economic Development (MED) staff. The commission’s budget is included within the MED vote, and, in a memo to commission members, Farrell notes that the ministry officials had asked the commission to prepare a case for more capital spending.

"We expect to need something in excess of $100,000 in the next financial year in set up costs to enable us to assume the new responsibilities under the bills present before the House…We apprehend that the officials may endeavour to distance themselves from our case," he warned.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

Commenting is closed