EXPLANATORY STATEMENT

Authorised Deposit‑taking Institutions Supervisory Levy Imposition Determination 2012

This determination relates to a levy imposed by the Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Act 1998 on authorised deposit‑taking institutions (ADIs).

This determination commences on 1 July 2012 and relates to the 2012‑13 financial year.  The Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Determination 2011 is revoked upon commencement of this determination.  Consistent with section 50 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.

Subsection 7(3) of the Authorised Deposit‑taking Institutions Supervisory Levy Imposition Act 1998 allows the Minister to determine:

(a)           the maximum restricted levy amount for each financial year;

(b)          the minimum restricted levy amount for each financial year;

(c)           the restricted levy percentage for each financial year;

(ca) the unrestricted levy percentage for each financial year; and

(d)          how an authorised deposit‑taking institution’s asset value is to be calculated.

For foreign authorised deposit‑taking institutions this determination provides that the restricted component of the 2012‑13 levy will be calculated at 0.00207 per cent of assets held by the entity, subject to a minimum of $490 and a maximum of $1,050,000.  The unrestricted component of the 2012-13 levy will be calculated at 0.000566 per cent of assets held by the entity.

For Specialist Credit Card Institutions and Providers of Purchased Payment Facilities this determination provides that the restricted component of the 2012-13 levy will be calculated at 0.00207 per cent of assets held by the entity, subject to a minimum of $10,300 and a maximum of $1,050,000.  The unrestricted component of the 2012-13 levy will be calculated at 0.000566 per cent of assets held by the entity.

For all other authorised deposit‑taking institutions, this determination provides that the restricted component of the 2012-13 levy will be calculated at 0.00414 per cent of assets held by the entity, subject to a minimum of $490 and a maximum of $2,100,000.  The unrestricted component of the 2012-13 levy will be calculated at 0.000566 per cent of assets held by the entity.

The finance sector has been consulted on the 2012‑13 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 1 June 2012.  The discussion paper discusses potential impacts of the levies on each industry sector and institution regulated by APRA, and sought industry views on a range of proposed scenarios.  Fifteen submissions were received during the consultation process, and one submission specifically commented upon the preferred levy scenario that was outlined in the paper in relation to the Authorised Deposit‑taking Institutions Supervisory Levy Imposition Determination 2012.  

In finalising the levy parameters for ADIs, amongst other things, consideration was given to the levy amount that would be paid by different sized institutions across the industry.  Following consultation, the preferred levy scenario outlined in the discussion paper was revised, and the finalised levy parameters have the effect of lowering the levy amount for smaller ADIs (relative to the preferred levy scenario), with a corresponding increase in the levy amount for larger ADIs (relative to the preferred levy scenario).

The Office of Best Practice Regulation has also been consulted on the 2012-13 supervisory levies and has advised that a Regulation Impact Statement is not required as the proposals are machinery‑of‑government in nature.  As was noted in the 2012-13 supervisory levies discussion paper, APRA has a regular review process to monitor the implementation of the levies.  In 2012‑13, the current levy review process will be merged with the development of a comprehensive Cost Recovery Impact Statement (CRIS).  Industry will continue to be consulted on the development of the CRIS.

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

Authorised Deposit-taking Institutions Supervisory Levy Imposition Determination 2012

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

This determination relates to a levy imposed by the Authorised Deposit‑Taking Institutions Supervisory Levy Imposition Act 1998 on authorised deposit‑taking institutions (ADIs).

Subsection 7(3) allows the Minister to determine:

(e)           the maximum restricted levy amount for each financial year;

(f)           the minimum restricted levy amount for each financial year;

(g)          the restricted levy percentage for each financial year;

(ca) the unrestricted levy percentage for each financial year; and

(h)          how an authorised deposit‑taking institution’s asset value is to be calculated.

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.