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Royal Commission continues to sting with million dollar levy

— 1 minute read

The tail end of the Hayne Royal Commission continues to hit the finance industry with institutions set to pay 10 per cent more in order to fund the work of government bodies including APRA and ASIC.

The paper, prepared by the Treasury in conjunction with APRA, sets out the total levies for those in the finance sector to pay in order to assist funding for APRA, ASIC and other government bodies. 

The total funding required under the levies in 2019 for all relevant agencies and departments is $236.0 million, a 10.6 per cent increase from the previous year. 

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APRA’s operating budget for the 2019-20 year is 186.1 million, up from 141.6 million while ASIC’s budget decreased from 35.5 to 8.4 million. 

The higher amount for APRA is primarily due to the additional funding made up of $13.3 million for new and expanded functions while an additional $29.1 million formed the government’s response to the royal commission. 

ASIC’s $8.4 million is to offset the costs in relation to the operation of the superannuation complaints tribunal, which will continue to be wound down due to AFCA. 

In line with ASIC’s funding model, it is expected that none of ASIC’s costs will be recovered through the levies once the tribunal is wrapped up. 

The proposed levies also illustrated the amount of time the authority estimated it would spend on industry sectors,  with ADIs receiving the most supervision. 

APRA estimated that 44 per cent of its supervision time would be on ADIs followed by 26 per cent on superannuation and then general insurance followed by life insurance. 

Due to the time allowances, the total funding for ADIs was the most significant with an estimated $86.7 million followed by superannuation with a total of $43.6 million.

In total the ADI industry was expected to pay a total levy of $90.8 million, consisting of the 86.7 million for APRA and then $3.5 million for the ACCC and $0.6 million for the Treasury’s cost recovery of APRA’s capability review. 

This is an increase of 7.3 million from the year before when ADIs had just $83.5 million to pay and will help fund APRAs embedding of BEAR across the industry and strengthening of risk governance, culture and remuneration. 

The superannuation industry’s total levies equalled $89.1 million consisting of $43.6 million for APRA supervision and then $45.5 million for costs relating to ASIC, ATO, GNGB and Treasury. 

It’s an increase of $6.8 million from the previous year and will go towards APRA’s implementation of new legislation and standards to improve member outcomes. 

In the paper, APRA identifies its approach to regulation with primary responsibility of financial institutions resting with the institution’s boards and senior management. 

“APRA takes a risk-based approach to supervision that is designed to identify and assess those areas of greatest risk to an APRA-regulated institution (or to the financial system as a whole) and then direct supervisory resources and attention to these risks,” it said.

The industry is invited to response to the proposed levies up until 14 June. 

 

 

Royal Commission continues to sting with million dollar levy
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Eliot Hastie

Eliot Hastie

Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms. 

Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.

Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).

You can email him on: [email protected]

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