The Review of Financial Sector Levies

The Review of Financial Sector Levies is required to evaluate the arrangements for determination of the financial sector levies and make recommendations on any changes that need to be made to the current arrangements. In reaching its recommendations, it must balance accountability, efficiency, transparency and equity with simplicity of administration and collection. It is also required to ensure that recommended options have the capacity to provide stable and effective funding for the regulators on a sustainable basis and meet the evolving needs of prudential supervision into the future at a reasonable cost.

The existing levy-setting arrangements fund the vast majority of the costs of the Australian Prudential Regulation Authority (APRA) in pursuing its role of prudential supervision and regulation, and certain consumer protection and market integrity functions of the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO). These levy-setting arrangements were established following Government consideration of the recommendations of the 1997 Financial System Inquiry (Wallis Inquiry).

The Terms of Reference for the Review were announced by the Minister for Revenue and Assistant Treasurer, Senator Coonan, on 29 October 2002.

The Review is being chaired by the Treasury and undertaken jointly by Treasury and APRA in consultation with ASIC and the ATO.

Initial submissions were sought in November 2002 from industry groups and other interested parties to assist in the preparation of an Issues and Discussion Paper. Further submissions were sought following the release of the Issues and Discussion Paper in April 2003.