Funding is being cut at Australia's corporate regulator and staffing levels will be reduced, according to figures in Tuesday's federal budget.

Key points: ASIC will lose $28 million in Government funding over next three years

ASIC will lose $28 million in Government funding over next three years Average staffing levels will drop by 2 per cent — 30 positions — next financial year

Average staffing levels will drop by 2 per cent — 30 positions — next financial year ABC understands reduction is largely related to specific programs winding up

The budget revealed a reduction in government funding for the Australian Securities and Investments Commission (ASIC) of $28 million over three years.

Funding will reduce from about $348 million this financial year to about $320 million in 2020-21.

After 2020-21, the forward estimates suggest ASIC's government funding will marginally increase again to about $322 million.

Average staffing levels will be reduced next year by 2 per cent, or 30 positions.

The ABC understands the reduction in funding is largely related to specific programs winding up, including around data collection.

A spokesman for Financial Services Minister Kelly O'Dwyer denied ASIC's resources were being cut, and said funding varied depending on specific need.

"Approximately 20 per cent of ASIC funding is project-driven, so funding and personnel fluctuates from time to time," the spokesman said.

"ASIC is well funded and resourced to undertake its important regulatory work."

Labor seized on the funding cuts, arguing it was not the time to be reducing funding to ASIC given the ongoing royal commission into the banking sector.

Labor MP Matt Keogh said even if the funding was no longer needed for specific programs, it could have been redirected elsewhere.

"Surely the Government would not be taking money away but actually giving some of that special purpose funding to ASIC, to the Commonwealth DPP," he said.

The budget separately contains $10.6 million over two years to assist in ASIC's involvement in the royal commission.

Finance Minister Mathias Cormann dismissed suggestions ASIC's capability was being reduced.

"We have provided additional resources to ASIC, that is a matter of public record," he said.

"And of course, once the royal commission reports, the Government will consider any findings and recommendations and make further decisions at that point."

$10 million is also being provided to ASIC to fund grants to "enhance female financial capability".

Job cuts expected to come as programs wrap up

It is expected the total job cuts will amount to 26 positions, from ASIC's workforce of more than 1,600.

Most of those will come from particular data-collection projects wrapping up, and positions not specifically involved in enforcement.

But Mr Keogh said the reduced funding would see ASIC's enforcement capability hampered.

"The key cut in funding is to their core operations, and it's core business for ASIC to be a regulator and a law enforcement agency," he said.

"So if the money is being cut out of that core operation for ASIC, there's no excuse."