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Super industry levies insufficiently detailed: ASFA

In a submission to Treasury about the proposed financial institution's supervisory levies for 2022-2023, ASFA has called for a more detailed dissection of APRA's regulatory activities.

The industry body said: "It's incumbent upon regulators to provide genuine transparency and accountability regarding the manner in which they determine their funding requirements and utilise their funding."

"Genuine transparency and accountability provides industry with greater insight into regulators' activities, and builds confidence within the industry that regulators are functioning well."

However, with respect to the Financial Institutions Supervisory Levies, ASFA supposed that it didn't provide sufficient detail for the industry to adequately understand how the proposed levies are determined.

For the super industry, the Treasury's proposed Financial Institutions Supervisory Levies would see the levy component grow from $57.8 million in 2021/22 to $61.3 million for 2022/23, a six percent rise year on year.

ASFA notes much of the recent increase relates to the 2021-22 budget measure Stronger Consumer Outcomes for Members of Superannuation. But, ASFA has also said that there is insufficient detail regarding the composition of APRA's broader regulatory costs concerning the super industry.

Just as the super industry faced increased scrutiny from the Your Future, Your Super legislation, ASFA submitted that a higher level of examination should apply with respect to the costs recovered from the industry via levies.

"Any increase in Financial Institutions Supervisory Levies, or other similar industry levies, ultimately will be borne by members - as higher fees (or indirect costs) that otherwise would be the case," ASFA argued.

Each year the Treasury publishes a Financial Institutions Supervisory Levies paper that proposes levy amounts for each relevant agency. This year, ASFA was pleased that the paper provided more detail compared with previous years, even so, the industry body said there was insufficient information on how the levy amounts for each agency related to their regulatory activities.

ASFA concluded that transparency around minimum and maximum levies needed to improve. The industry body also said that while Treasury has previously acknowledged its concerns and indicated greater transparency, in accordance with prior years, an updated cost recovery statement wasn't released in relevant discussion papers.

Read more: ASFATreasuryFinancial Institutions Supervisory LeviesAPRAMember outcomesSuperannuation