EXPLANATORY STATEMENT

First Home Saver Account Providers Supervisory Levy Imposition Determination 2010

This determination relates to a levy imposed on providers of first home saver accounts by the First Home Saver Account Providers Supervisory Levy Imposition Act 2008. The Act refers to three types of entities that provide FHSA facilities: authorised deposit taking institutions, life insurers and trustees of public offer superannuation entities.  Those entities offering FHSA facilities will be subject to a separate levy.

This determination commences on 1 July 2010 and relates to the 2010‑11 financial year.  The First Home Saver Account Providers Supervisory Levy Imposition Determination 2009 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(5) of the First Home Saver Account Providers Supervisory Levy Imposition Act 2008 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;

d)     the unrestricted levy percentage for each financial year; and

e)      how a leviable FHSA entity’s asset value is to be calculated.

This determination provides that the restricted component for the 2010‑11 levy will be calculated at 0 per cent of assets held by the entity, subject to a minimum amount of $0 and a maximum amount of $0.  The unrestricted component of the 2010-11 levy will be calculated at 0 per cent of assets held by the entity. 

In effect, this means that FHSA providers will not be levied in relation to the 2010‑11 financial year, considering the limited number of approved FHSA entities (19 ADIs and one superannuation trustee) and the small amount of FHSA deposit balances held ($60 million) as at December 2009 .

The finance sector has been consulted on the 2010‑11 supervisory levies through a Treasury and Australian Prudential Regulation Authority Consultation Paper released on 27 May 2010.

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