House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Revenue and Assistant Treasurer, Senator the Hon Helen Coonan)

Chapter 1 - Outline and financial impact statement

Outline

1. This Bill amends the Superannuation (Financial Assistance Funding) Levy Act 1993 'the Levy Act' to facilitate more efficient arrangements for the imposition of levies under the Levy Act on regulated superannuation funds and approved deposit funds, for the purposes of recouping financial assistance granted under Part 23 of the SIS Act.

2. During the 2001-2002 financial year, the Minister for Revenue and Assistant Treasurer made over 180 determinations to grant financial assistance to superannuation funds that had suffered a loss due to fraudulent conduct of theft. To date the Minister has made over 370. As a result a number of deficiencies were identified in the legislative arrangements.

3. Firstly, the Levy Act currently requires that separate levies must be collected for each grant of financial assistance. Secondly, the levy rate must be determined on a fund's assets with a maximum levy rate. The Levy Act does not allow for the specification of maximum or minimum levy amounts.

4. The recent circumstances have identified that collecting a levy separate levy for each individual determination is impractical in circumstances where a large number of determinations are made, and a flat levy rate to recoup grants already paid would generate a large number of very small levy amounts (less than 20 cents) from some funds, and very large amount (over $400,000) from other funds.

5. To address these inefficiencies, this Bill introduces a provision to amend the Levy Act to allow for the specifying of a minimum and maximum levy payable in respect of any levies imposed. This is consistent with the Superannuation Supervisory Levy Imposition Act 1998. It also introduces a provision to enable aggregate amounts of financial assistance to be collected in one levy in each financial year, rather than individually.

Financial Impact Statement

6. The Government is committed to recouping the amount of financial assistance granted under Part 23 of the SIS Act. The amendments proposed in this Bill simplify the process of collection of levies. It is anticipated that the amendments in this Bill would not have a financial impact.