The Association of Superannuation Funds of Australia (ASFA) has called for a thorough review of the supervisory levy determination process.
It said due to the length of time in setting up the parameters of the levy and the lack of transparency, it was reasonable that a review be undertaken.
ASFA suggested it could be performed by the Productivity Commission to ascertain the basis for levy determination and the underlying methodology used.
RSE licensees would pay over $180 million this year in supervisory levies, representing an increase of $134 million over last year’s levies.
ASFA said given the money could otherwise have been attributed to member accounts, it was critical that all agencies that received the levy were accountable for the costs and expenditure they incurred.
It was important a review determined that the costs incurred were justifiable, that there was transparency and accountability with respect to the cost of activities undertaken, and that the supervisory levy methodology was appropriate.
Funding agencies through levies represented a moral hazard, according to ASFA, in that the party which provided the funding had no control over the resourcing decisions made by the agency. It meant agencies could be relatively unconstrained as to the approach they took, the scope and size of projects and the costs they incurred as a result, according to ASFA.
The Australian Institute of Superannuation Trustees (AIST) said it was concerned that the Cost Recovery Guidelines (CRG) had not been applied to the financial services levies and that a Cost Recovery Impact Statement (CRIS) had not been prepared.
It said it created a lack of transparency which restricted AIST’s opinion on the appropriateness of the calculation model to be used.
AIST provided two different methodologies for the determination of the levy to show the significant impact of using different methodologies.
