Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

The General Insurance Supervisory Levy Imposition Amendment Bill 2006 is noncontroversial and enjoys the support of the opposition. It is a cost-recovery amendment to the General Insurance Supervisory Levy Imposition Act 1998 for insurance companies directly using the APRA insurance database to recoup costs in operating that database. It removes other insurance companies that do not use the database from being levied. More specifically, the General Insurance Supervisory Levy Imposition Amendment Bill 2006 enables a special levy component to be imposed on a class of general insurance company regulated by the Australian Prudential Regulation Authority.

The bill will amend the General Insurance Supervisory Levy Imposition Act 1998 to allow for the Treasurer to determine the special levy component to be imposed on a class of general insurance company. The measures contained in the bill are designed to provide for increased flexibility in the recovery of costs incurred by APRA. The bill provides that costs incurred by APRA in performing an activity relating to a class of general insurance company are not necessarily recovered from all general insurance companies. For example, the bill will enable costs associated with a national claims and policies database to be recovered only from those general insurance companies who benefit from that database. A class of general insurance company can be determined by the classes of businesses written by the general insurance company.

The general position taken by this government is that regulators should be funded by cost-recovery mechanisms through levies on the sector. Labor generally supports this position. However, it should also be noted that the introduction of these levies does constitute a breach of commitments the government have made on the introduction of new taxes. These commitments were made before coming into office and have been broken on a regular basis. They have broken them in a range of other taxation areas such as income tax and of course company tax.

The bill also creates the power for the Treasurer to issue new taxes without legislation. In general this is not a sound way forward and Labor would prefer that matters relating to the imposition of charges of this nature occur through legislation rather than regulation. But the opposition looks upon the bill as being noncontroversial and an appropriate initiative. The bill has our support.

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