EXPLANATORY STATEMENT

Australian Prudential Regulation Authority (Commonwealth Costs) Determination 2014

Subsection 50(1) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) requires the Minister, by legislative instrument, to make a determination on the amount of levy (as defined under subsection 50(6)) that is to be available to cover the costs to the Commonwealth of providing market integrity and consumer protection functions for prudentially regulated institutions, administering the function of making determinations about the release on compassionate grounds of benefits that are in a superannuation entity or retirement savings account and implementing the SuperStream measures.  This can be done either by specifying one retainable amount or by specifying a retainable amount for each class of levy.  Under subsection 50(1A) the Minister may also specify the proportion of levy revenue paid to the Australian Prudential Regulation Authority (APRA) that is to be credited to the APRA Special Account.

This determination commences on 1 July 2014 and relates to the 2014‑15 financial year.  The Australian Prudential Regulation Authority (Commonwealth Costs) Determination 2013 (Revised) is repealed on 1 July 2014. 

The determination will commence before it is registered.  Commencement prior to registration, however, does not disadvantageously affect the rights of any person as at the date of registration or impose any liability on any person in respect of anything done or omitted to be done before the date of registration.  Commencement prior to registration is therefore consistent with subsection 12(2) of the Legislative Instruments Act 2003.

This determination states the amount of levy revenue allocated under each of the various levy imposition Acts relating to the Australian Securities and Investments Commission (ASIC) and to the Australian Taxation Office (ATO), the Department of Human Services (DHS) and for the implementation of the SuperStream measures in 2014‑15.  Funds are allocated to ASIC and ATO activities in so far as those agencies provide, on behalf of the Commonwealth, relevant market integrity and consumer protection functions for prudentially regulated institutions; and to DHS in administering the function of making determinations about the release on compassionate grounds of benefits that are in a superannuation entity or retirement savings account.  They will contribute towards the costs of ASIC, ATO and DHS undertaking those functions.

It also includes an amount of levy revenue collected to reimburse the Commonwealth for capital provided to APRA in order to implement the Stronger Super – MySuper reforms in 2014-15.

The amount allocated to activities undertaken by ASIC, ATO, DHS, the implementation of the SuperStream measures, and the recovery of capital provided to APRA under each of the financial sector levy imposition Acts is equal to $111 900 000 in 2014-15.

This determination states that under subsection 50(1A) of the APRA Act, the proportion of amounts of levy money paid to Australian Prudential Regulation Authority (APRA), on behalf of the Commonwealth for 2014-15, that is to be credited to the APRA Special Account on an ongoing basis is 51.1 per cent.

ASIC, ATO and DHS have been consulted on the amounts of levy revenue allocated.

The finance sector has been consulted on the 2014‑15 supervisory levies, through a Treasury and APRA discussion paper released on the Treasury website on 26 May 2014. Fourteen submissions were received as part of this process.

The Office of Best Practice Regulation has previously advised that a Regulatory Impact Statement is not required as supervisory levies are considered machinery‑of‑government in nature. 

This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out in Attachment 1.

Attachment 1

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Australian Prudential Regulation Authority (Commonwealth Costs) Determination 2014

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Subsection 50(1) of the Australian Prudential Regulation Authority Act 1998 enables the Minister to make a determination on the amount of levy (as defined under subsection 50(6)) that is to be available to cover the costs to the Commonwealth of:

•                 providing market integrity and consumer protection functions for prudentially regulated institutions;

•                 administering the function of making determinations about the release on compassionate grounds of benefits that are in a superannuation entity or retirement savings account; and

•                 implementing the SuperStream measures. 

This can be done either by specifying one retainable amount or by specifying a retainable amount for each class of levy. 

Under subsection 50(1A) the Minister may also specify the proportion of levy revenue paid to the Australian Prudential Regulation Authority (APRA) that is to be credited to the APRA Special Account.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.