EXPLANATORY STATEMENT

Superannuation Supervisory Levy Imposition Determination 2005

This determination relates to a levy imposed by the Superannuation Supervisory Levy Imposition Act 1998 on superannuation entities.

This determination commences on 1 July 2005 and relates to the 2005‑06 financial year.  The Superannuation Supervisory Levy Imposition Determination 2004 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 Superannuation Supervisory Levy Imposition Act 1998 allows the Treasurer 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 a superannuation entity’s asset value is to be calculated.

For superannuation funds other than small APRA funds (SAFs), this determination provides that the restricted component of the 2005‑06 levy will be calculated at 0.0420 per cent of assets held by the entity, subject to a minimum of $570 and a maximum of $99 000.  The unrestricted component of the 2005-06 levy will be calculated at 0.000956 per cent of assets held by the entity.

For SAFs, this determination provides that the restricted component of the 2005‑06 levy will be calculated at 0 per cent of assets held by the entity, subject to a minimum of $500 and a maximum of $500.  The unrestricted component of the 2005-06 levy will be calculated at 0 per cent of assets held by the entity.  In effect, SAFs will be levied a flat amount of $500.

It should be noted that this determination puts in place a transitional arrangement for implementing the new levy framework for the superannuation sector.  In particular, the unrestricted levy component and the maximum on the restricted component are both smaller than full immediate implementation of the new levy framework would require.  From 2006‑07 it is expected that the superannuation sector levy calculations will be based on a full implementation of the new levy framework.

This determination is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.