EXPLANATORY STATEMENT

Superannuation Supervisory Levy Imposition Determination 2017

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

This determination commences on 1 July 2017 and relates to the 2017‑18 financial year. The Superannuation Supervisory Levy Imposition Determination 2016 is repealed upon commencement of this determination. Consistent with section 7 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.

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 subsections 12(2) and 12(3) of the Legislation Act 2003.

Subsection 7(3) of the Act requires the Treasurer, by legislative instrument, 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 levy base is to be worked out.

For superannuation funds other than small APRA funds (SAFs) and single member approved deposit funds (SMADFs), this determination provides that the restricted component of the 2017‑18 levy will be calculated at 0.00307 per cent of assets held by the entity, subject to a minimum of $3,500 and a maximum of $300,000. The unrestricted component of the 2017‑18 levy will be calculated at 0.005655 per cent of assets held by the entity.

For SAFs and SMADFs, this determination provides that the restricted component of the 2017‑18 levy will be calculated at zero per cent of assets held by the entity, subject to a minimum of $590 and a maximum of $590. The unrestricted component of the 2017-18 levy will be calculated at zero per cent of assets held by the entity. In effect, SAFs and SMADFs will be levied a flat amount of $590 per fund.

In 2017-18 Pooled Superannuation Trusts (PST’s), as defined in the Superannuation Industry (Supervision) Act 1993, are to be levied separately to other superannuation funds, SAFs and SMADFs. This determination provides that for PSTs the restricted component of the 2017-18 levy will be calculated at 0.00154 per cent of assets held by the entity, subject to a minimum of $3,500 and a maximum of $150,000. The unrestricted component of the levy will be calculated at 0.001413 per cent of assets held by the entity. 

The finance sector has been consulted on the 2017‑18 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 26 May 2017. The discussion paper discusses potential impacts of the levies on each industry sector and institution regulated by APRA. Five submissions were received during the consultation process and one submissions related to the levy on the superannuation industry. 

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 Attachment 1.

Attachment 1

Statement of Compatibility with Human Rights

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

Superannuation Supervisory Levy Imposition Determination 2017

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 Superannuation Supervisory Levy Imposition Act 1998 on superannuation entities.

Subsection 7(3) 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.

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.