The Super Members Council (SMC) has called for greater transparency and accountability around proposed increases to financial institutions supervisory levies, warning that superannuation members are being asked to shoulder higher regulatory costs without sufficient detail on the benefits they will receive.
In a submission to the Treasury, the industry body raised concerns over a proposed 11.3 per cent increase in the 2026–27 financial institutions supervisory levy, which would lift the amount paid by the superannuation sector to $125.2 million from $112.5 million in 2025–26.
SMC said Australians deserved a “world-class super system” supported by a strong and efficient regulatory framework, but argued any increase in levies should be tested against principles of necessity, proportionality, efficiency and value for money.
The organisation noted that super is expected to account for 42.1 per cent of total financial institutions supervisory levies in 2026–27, despite APRA’s supervisory effort allocated to the sector representing about 32 per cent of the restricted component and around 31–33 per cent of the unrestricted component.
According to the submission: “This creates a legitimate question as to whether members in this sector are bearing a levy burden that exceeds its supervisory share – particularly once cross-agency costs are included.”
The industry body also linked the levy debate to broader concerns about rising costs borne by fund members, noting superannuation members had already contributed to the Compensation Scheme of Last Resort (CSLR) through a special levy imposed last year.
While supporting effective and well-resourced regulation, SMC argued Treasury should provide greater visibility of the assumptions, methodology and cost drivers underpinning levy calculations, particularly for non-APRA components.
“The substantial and growing non-APRA funding component offers very limited transparency about the activities being funded, the standards being applied, or how the additional revenue would translate into improved regulatory and consumer protection outcomes,” the submission said.
Particular scrutiny was directed at the Australian Taxation Office (ATO) component of the levy, which funds activities including the Lost Members Register, Unclaimed Superannuation Money frameworks and compassionate release administration.
Although the SMC acknowledged these functions delivered value to members, it argued consultation materials provided little information about expected improvements, performance measures or how underlying costs had been calculated.
The submission called for clear and measurable performance targets for ATO-funded activities, including reductions in lost accounts, improved reunification rates, faster processing times and stronger data integrity outcomes.
It also urged the Treasury to explain what additional prevention, compliance and enforcement activity would be funded through compassionate release administration.
SMC made six recommendations, including a review of the levy allocation methodology, publication of detailed cost information before consultations commence, stronger justification for levy increases and consideration of whether policy-driven reforms with broader public benefits should continue to be funded through member levies.
The body said the issue extended beyond the size of this year’s increase and went to confidence in the levy-setting framework itself.
“SMC supports strong and effective regulation, while being clear that members should only be asked to fund rising levy costs with a clear and compelling case for why those costs are necessary, proportionate and delivering measurable value,” the submission said.
