Paul Fletcher (Bradfield, Liberal Party) Share this | Hansard source

Madam Deputy Speaker, I seek leave to make a statement in connection with the report.

Leave granted.

I am pleased to rise to speak in relation to the report by the Parliamentary Joint Committee on Corporations and Financial Services on the Superannuation Legislation Amendment (Reform of Self Managed Superannuation Funds Supervisory Levy Arrangements) Bill 2013. This bill, which the committee investigated in its inquiry, has the purpose of increasing the cap on the levy which can be charged each year to self managed super funds as part of the cost-recovery arrangements under which the Australian Taxation Office incurs costs in its function of supervising self managed super funds and then recovers those costs from the sector.

The evidence before the committee makes it hard to avoid the conclusion that the government's approach to this issue has been misleading and unnecessarily secretive. I want to focus particularly on the claim that the increase which is authorised by the legislation is an increase which is required so as to continue to achieve the objective of cost recovery. In other words, the argument which the government is putting is that this increase is required because the amount of money which today is collected in the levy on self-managed super funds is not sufficient to cover the costs which are incurred by the Australian Taxation Office in carrying out that function.

I want to quote from the explanatory memorandum which has been circulated by the government in relation to the bill which contains the following statement:

The current SMSF supervisory levy does not fully recover the ATO’s costs of regulating the sector.

That is a straightforward factual claim, and I was interested to test this claim with the officers of the Australian Taxation Office who appeared before the committee. Those officers confirmed what the committee had been told by another witness, which was that, in a presentation to an industry forum, the ATO had, in recent months, disclosed that the cost incurred by the ATO in carrying out these supervisory functions is approximately $85 million per year.

The key point is that, if you calculate the amount of the levy that is presently collected, you get to a number which meets or exceeds $85 million per year. I wanted to test whether my understanding of that was correct, so I specifically asked the officer of the Australian Taxation Office who appeared before the committee. I said:

I would like to ask you about the statement you made before … that apart from the timing difference, broadly, for 2011-12 what will be collected under the levy will cover the costs.

Mr Peterson: Yes, we expect it to be in that order.

In other words, we have a policy measure to collect more money from the self-managed super fund sector which is justified as a cost-recovery measure and is justified on the basis that the existing arrangements do not cover the costs of the Australian Taxation Office in carrying out its supervisory function. In fact, the evidence which was provided to the committee by officers of the Australian Taxation Office is that the amount which is presently collected does cover the costs of the ATO's self-regulatory function.

On further analysis, it seems that there are two separate issues. The first issue is the timing issue. Officers of the tax office explained that, because of the way the levy is presently collected, there can be quite some period between the year in respect of which the expense is incurred and the time when the levy is collected, and that presents a timing problem. That may very well be so. I do not doubt the evidence which has been provided. But it raises the question as to why the increase in fees is required, as distinct from the separate measure, also introduced by this bill, which changes the timing arrangements.

Stakeholders in the industry, in the regulated sector, expressed their concern about the degree of transparency that was provided by the Australian Taxation Office, and I can understand why they expressed that concern. Again, I want to ask: why is there is a statement in the explanatory memorandum that the current SMSF supervisory levy does not fully recover the ATO's costs of regulating the sector, and how is that consistent with the current revenue that is collected and the current costs of $85 million?

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