Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos addressed the topic at an ASFA post-Budget luncheon in Sydney yesterday.
Pointing to cuts in funding to both the Australian Taxation Office (ATO) and ASIC in Tuesday night’s federal Budget, Ms Vamos said the superannuation sector must “push back” against increasing supervisory levies by proving it can effectively self-regulate.
APRA-regulated super funds paid about $13 million into ASIC and about $100 million into the ATO for SuperStream in 2013/2014 – along with an additional $7 billion for other service, according to ASFA.
Ms Vamos said the way supervisory levies are applied across the financial industry in both the pooled (APRA-regulated) and non-pooled (SMSF) superannuation sectors are set to change.
The subject of supervisory levies will likely be a topic raised by the current Financial System Inquiry, she added.
“The only way we are going to be able to push back on supervisory levies is to show we can self-regulate,” said Ms Vamos.
It is up to the superannuation industry to show it can develop its own disclosure standards and monitor its own governance standards, she said.
“Unless we start moving to prove and show we can self-regulate then our levies are going to continue to go up, and that has a significant impact in the long run for our members,” said Ms Vamos.
Cuts to ASIC funding in the Budget also have the financial planning sector worried that it could be affected as the regulator looks to raise revenue elsewhere.
Financial Planning Association general manager for policy and conduct Dante De Gori expressed his concern yesterday that licensing fees could be on the way up for financial advice firms.
"There's been talk about 'user-pays' models and changing the funding model around for licensees and financial planning businesses," he said.
In a statement issued last night, the Association of Financial Advisers also touched on the ramifications of the ASIC cuts for the advice industry, with chief executive Brad Fox claiming that as the industry “continues its progression towards becoming a universally recognised profession, the opportunity for greater self-regulation will increase” and that the cuts to ASIC funding may be positive for the industry in acting as an “impetus to bring this forward”.
Treasurer Steven Ciobo made the government’s “philosophy” about self-regulation clear at a Financial Services Council/AMP breakfast yesterday morning.
Asked about the cuts in funding to ASIC, Mr Ciobo said the government was keen for all industries to self-regulate.
“Now clearly there’s a need for government and regulators to be on the playing field in relation to certain activities,” said Mr Ciobo.
“But there’s a lot of activity that the former [Labor] government was pretty keen to regulate and specify through policy statements … which we are less enthused about doing,” he said.
The Coalition government will always have a preference for self-regulation as opposed to intervention by a taxpayer-funded regulator, said Mr Ciobo.
The federal Budget also revealed the government’s interest in selling off the registry (i.e. business names) division of ASIC with the announcement of a scoping study on the topic.
