EXPLANATORY STATEMENT

Australian Prudential Regulation Authority (Commonwealth Costs) Determination 2017 (Revised)

Subsection 50(1) of the Australian Prudential Regulation Authority Act 1998 (APRA Act) requires the Minister, by legislative instrument, to make a determination of the amount of levy (as defined in 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 is taken to have commenced on 1 July 2017 and relates to the 2017-18 financial year. The determination repeals and replaces the Australian Prudential Regulation Authority (Commonwealth Costs) Determination 2017 to reflect the actual levy amount collected in 2017‑18 and to adjust the proportion to be credited to the APRA Special Account.

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 other than the Commonwealth or an authority of the Commonwealth in respect of anything done or omitted to be done before the date of registration. Commencement prior to registration is therefore consistent with subsections 12(2) and 12(3) of the Legislation Act 2003.

This determination states the amount of levy revenue that 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. The amount is equal to $111 880 000 in 2017-18.  

This amount is to be made available to the Commonwealth to cover the costs incurred by:

•                 the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO) for activities in so far as those agencies provide, on behalf of the Commonwealth, relevant market integrity and consumer protection functions for prudentially regulated institutions;

•                 the Department of Human Services (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; and

•                 the Australian Competition and Consumer Commission (ACCC) in investigating specific competition issues in Australia’s financial system.

This determination also states that under subsection 50(1A) of the APRA Act, the proportion of amounts of levy money paid to APRA, on behalf of the Commonwealth for 2017‑18, that is to be credited to the APRA Special Account on an ongoing basis is 54.9 per cent.

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

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 Legislation 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 the Attachment.

ATTACHMENT

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 2017 (Revised)

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 determination is taken to have commenced on 1 July 2017 and relates to the 2017-18 financial year. The determination repeals and replaces the Australian Prudential Regulation Authority (Commonwealth Costs) Determination 2017 to reflect the actual levy amount collected in 2017‑18 and to adjust the proportion to be credited to the APRA Special Account.

This determination states the amount of levy revenue that 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. The amount is equal to $111 880 000 in 2017-18.     

This determination also 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 2017-18, that is to be credited to the APRA Special Account on an ongoing basis is 54.9 per cent.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms. 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 other than the Commonwealth or an authority of the Commonwealth in respect of anything done or omitted to be done before the date of registration. Commencement prior to registration is therefore consistent with subsections 12(2) and 12(3) of the Legislation Act 2003.

Conclusion

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