Michael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I move:

That the bill be now read a second time.

This bill, along with the APRA levy imposition bills being introduced alongside it, will ensure the government's cost recovery arrangements for APRA continue to operate effectively. These bills will do this by ensuring the Treasurer has adequate flexibility to set the levies at a level required for institutions to pay their required share, and by ensuring the Commonwealth can continue to collect relevant costs for its regulatory activities in the financial sector. Both of these changes, of course, reflect the evolving environment we find ourselves in.

In introducing this bill today, we are delivering on a commitment made to review the methodology of APRA levies and address legislative barriers to their effective operation.

Since 1998, when the APRA Act and the levy imposition acts set the current levy arrangements, the role of APRA has obviously expanded and increased. Additionally, other agencies have taken on a role in regulating the financial sector, the cost of which should be borne by those institutions that bring about the need for that regulation.

Legislation is currently preventing the largest banks from paying the appropriate share of the cost of APRA's regulation.

The APRA industry funding bill and the levy imposition bills will fix these issues.

Schedule 1 of the bill expands the conditions under which levy money is payable to the Commonwealth in respect of regulation of prudentially regulated entities to also include consumer outcomes.

The levy imposition bills increase the statutory cap on levy collections for APRA's direct supervisory work on institutions from $1½ million, as set back in 2005, to $10 million, subject to indexation which uses the latest available CPI data.

These bills will ensure there are no regulatory barriers to all institutions paying their appropriate share and to bearing the costs of regulatory activities undertaken by the Commonwealth agencies in relation to APRA regulated entities, which aim to promote consumer outcomes.

In closing, these bills will ensure the framework of the APRA levies keeps pace with the evolving regulatory environment and the size of the industry.

The full details of the measures are contained in the explanatory memorandum.

Debate adjourned.