Australia is perilously close to slipping behind Bangladesh and Cambodia as the most costly place in the world to access corporate information. Already, in this vital area of public policy, we trail the likes of war-torn Libya, Cameroon, Colombia, Ethiopia and Bolivia.
Globally, this nation ranks as the cellar-dweller of public policy on data access.
An investigation by michaelwest.com.au found charges to access company information in Australia are probably the highest in the world, and they are destined to run even higher if the government presses ahead with its plan to sell the public database to a private operator.
We use the word “probably” because information about fees in the African nation of Chad were not available, and in Thailand – where the political landscape remains in turmoil in the wake of two army coups – the military junta is battling land-rights campaigners by shutting down access to corporate information.
Moreover, detail about access to public information in the absolute monarchies of Brunei and Swaziland was not available either. Same deal for the single party states of Cuba and Laos. So, it may be that the fees for accessing information in these counties are higher than Australia; but the information is simply not available.
“Corporate data is far cheaper in the absolute monarchies of Oman, Qatar, Saudi Arabia – where they are still chopping people’s heads off”
The question was put to ASIC this week: “are Australian search charges the highest in the world?” An ASIC spokesperson said the commission did not set fees and referred us to government. The same question was accordingly put to Treasury. There was no response from Treasury, which is conducting the privatisation of the ASIC database.
Far away meanwhile from the idyllic shores of Lake Burley Griffin, access to corporate data is far cheaper in the absolute monarchies of Oman, Qatar, Saudi Arabia – where they are still chopping people’s heads off – and the United Arab Emirates than it is in Australia. It is also far cheaper to gain access to corporate information in the single party state of Vietnam and in the modernising yet absolute monarchies of Kuwait and Morocco.
A definitive answer to the question of whether Australian charges are the highest in the world is not possible as there is no like-for-like breakdown in costs for each item of public information.
Though a fair picture is possible. A global price list of search charges from business registry group Kyckr shows most countries charge a fraction of the hefty fees to access corporate information than those that are levied by the Australian Securities & Investments Commission (ASIC). In the UK and New Zealand, access charges have gone the other way – to zero. And in the states of the US, Canada and Europe charges are either nil or are far cheaper than here. Same again for almost all countries in Europe, a fraction of the cost.
Unlike Australia, which cynically pays homage to an “open data policy”, most other nations appear to embrace the logical view that free public information is good for democracy and good for the economy.
The Kyckr price list – which adds its own service fees on top – shows the only country to have more expensive search items for access to corporate information is Liberia on the West Coast of Africa. However, this is only in respect of credit reports. According to Liberia’s Companies House, company searches are free, compared with the cost of accessing an annual report online in Australia which is $38 online.
On the Kyckr figures, the cost of accessing the most expensive type of credit report is €371.25, the same in Bangladesh and Cambodia as Australia. We were unable to establish how much these other countries charge for a company profile but on the Kyckr list an extended Australian company profile costs €43.10, the most expensive in the world, just to find the directors and shareholders.
In comparison, the charges to access a the same type of company profile from Austria are €6.25 (after Kyckr’s fees).
The credit report charges for Pakistan were also as high as Australia but the cost of a company profile, at €12.50, is less than a third of the price.
When Prime Minister Malcolm Turnbull turns up at the G20 Leaders’ Summit in China next month he can rest assured that he is truly a world leader in one respect: his citizens are slugged more than any other nation in the world for access to the public information they have already funded.
And when Mathias Cormann sits down for the working dinner of finance ministers in Washington DC a month later he can be secure in the knowledge that those he represents have to fork out something in the order of 400 per cent or more in fees than the electors of his peers.
As well as attending G20 events, perhaps Turnbull and Cormann could enlist Australia as a third nation in the Joint Commission for Bilateral Cooperation between Cambodia and Bangladesh as, when it comes to public data policy, these countries are truly our peers.
Once the ASIC database, a monopoly, is sold to a private buyer later this year access fees will only run higher, making the public’s own information even less accessible than it already is. Already, the fees are indexed not just to inflation but to inflation plus a round-up. So the present fee, for instance, of a basic company extract at $9 will go to $10 next year because the extra few cents for inflation will be rounded up to the nearest dollar … and so on.
Will the private monopoly buyer be adding 10 per cent a year to charges? As the sale process is so secretive, it is impossible to know but a buyer would hardly pay for an asset with falling or stagnant revenues.
The ramifications of this secrecy, however, and of the prospective sale, and indeed of the already usurious charges, are that it is hard now and will only become harder for all stakeholders to obtain “public” corporate information. For multinational tax avoiders, the environment could hardly be more conducive.
Another aspect to the disgrace that is public information policy is that the corporate regulator could quite easily ratchet up its revenues by simply applying the existing corporations laws. A spokesperson for ASIC confirmed this week that it had fined the Business Council of Australia (BCA) $312 for failing to lodge last year’s financial report on time in accordance with the Corporations Act.
It also fined Adidas Australia two late fees ($308 and $299). The penalties apparently came in the wake of stories by yours truly which exposed the BCA, the mouthpiece for best practice in business, for failing to lodge accounts on time for eight of the past 16 years.
What is the penalty for breaking the law? Schedule 3 Penalties in the Corporations Act, Item 112, says the penalty for breaching Subsection 319 (1) of the Act is “60 penalty units or imprisonment for 1 year, or both”.
If a penalty unit is $170, then one year’s breach equates to $10,200 and eight years’ breaches $81,600. ASIC potentially could fine the BCA $81,600 but the regulator has a history and a culture of pinging small businesses rather than big business.
For its part, Adidas managed to file late for 16 years on the trot.
How Adidas and its auditors managed to file their accounts late for 16 years
Given how chronic is late filing, as well as the many and assorted failures to adhere to the accounting standards and therefore the Corporations Act, ASIC could add millions to its revenue each year just by applying the existing laws. The BCA and Adidas are merely two examples. There are dozens if not hundreds of others.
Another thing: had this reporter not been able to fund the hundreds of dollars in search fees to ASIC to establish the facts for these stories, they would never have come to light. There would never have been a penalty and the laws would have continued to go unhindered.
If government were to put pressure on the accounting firms – such as the BCA’s auditor PwC – to assist their clients in complying with the laws the situation might be different but there is clearly no pressure put on Big Four Audit to obey the laws either.
A petition from 40,000 people this week called on the government to jettison its plans to privatise the corporate registry operations. On public data policy we are way behind our major trading peers; we are less vanguard than mudguard.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.