Commonwealth Numbered Regulations - Explanatory Statements

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SUPERANNUATION (FINANCIAL ASSISTANCE FUNDING) LEVY AND COLLECTION AMENDMENT REGULATIONS 2006 (NO. 1) (SLI NO 104 OF 2006)

EXPLANATORY STATEMENT Select Legislative Instrument 2006 No. 104

 

Issued by authority of the Minister for Revenue
and Assistant Treasurer

Superannuation (Financial Assistance Funding) Levy Act 1993
Financial Institutions Supervisory Levies Collection Act 1998

Superannuation (Financial Assistance Funding) Levy and Collection Amendment Regulations 2006 (No. 1)

The Superannuation (Financial Assistance Funding) Levy Act 1993 (the Levy Act) provides for the imposition of levies on regulated superannuation funds and approved deposit funds to recoup the amount of grants of financial assistance made under Part 23 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) to superannuation funds that have suffered loss as a result of fraudulent conduct or theft.  The Financial Institutions Supervisory Levies Collection Act 1998 (the Levies Collection Act) provides for the collection of levies imposed under the Levy Act and certain other Acts.

Section 10 of the Levy Act and section 29 of the Levies Collection Act provide that the Governor‑General may make regulations prescribing matters required or permitted by the Acts to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Acts.

In the 2004-05 financial year, the then Minister for Revenue and Assistant Treasurer made 120 determinations to grant financial assistance.  The total amount of financial assistance granted was $3,188,026.24.

The purpose of the Regulations was to impose a levy on regulated superannuation funds and approved deposit funds, other than self managed superannuation funds and levy exempt funds, to recoup the total amount of financial assistance granted under Part 23 of the SIS Act in the 2004-05 financial year. 

Section 6 of the Levy Act provides that the regulations may impose a levy or levies on each fund other than those to which grants under Part 23 of the SIS Act were made during the year in question.  Such regulations must specify the funds in respect of which determinations to grant assistance were made and the proportion of the levy that each fund represents.  Each levy must be identified in the regulations by a unique number and the regulations may specify a maximum and/or a minimum amount of levy.  The Regulations specify the funds in respect of which a determination was made to grant financial assistance and the proportion of the levy that each fund represents and exempts those funds from the levy.  The unique number of the levy is Superannuation (Financial Assistance Funding) Levy No. 2004-2005:1.

Section 7 of the Levy Act provides that the rate, minimum amount and maximum amount of a levy or levies are to be fixed on the basis that the amount of revenue to be raised is not to exceed the amount needed for the Commonwealth to recoup the amount of that financial assistance.  Section 7 of the Levy Act also provides that the levy rate of a levy or levies should not exceed 0.05 per cent of the sum of the values at the end of the previous financial year of all the assets of the funds on which the levy or levies are imposed.  The applicable rate (0.0000085) and the maximum and minimum levy amounts ($35,000 and $120, respectively) were fixed in the Regulations so that the amount of revenue that would be raised by the levy would not exceed the amount needed for the Commonwealth to recoup the total amount of assistance granted in the 2004-05 financial year.

Section 8 of the Levy Act specifies the formula to be used in working out the amount of a levy imposed on a fund.  The applicable rate must not exceed 0.0005.

Section 19 of the Levies Collection Act provides that a levy payable by a fund is due on a date specified in the regulations and that the date must not be earlier than the 28th day after the day on which those regulations took effect.

In finalising the levy amounts, peak industry bodies and certain specific funds were contacted for comment on the draft Regulations and explanatory memorandum.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commenced the day after they were registered on the Federal Register of Legislative Instruments.

 


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