Business to fund corporate watchdog

Businesses will be asked to foot a $200 million annual bill to fund the corporate watchdog as the federal government flags a move to a new user-pays system.

Assistant Treasurer Josh Frydenberg is set to release a consultation paper on the move, insisting the costs of running the Australian Securities and Investments Commission should be borne by those using its services, not taxpayers.

He told ABC Radio on Friday the financial services sector currently pays 12 per cent of ASIC's running costs but under the plan would cover $196 million of the $263 million running costs in 2016/17.