The introduction of the Government's SuperStream initiative is likely to cost members of the Financial Services Council (FSC) around $250 million, and the organisation wants assurances that the money will be appropriately administered by the Australian Taxation Office (ATO).
In a submission to the Parliamentary Joint Committee reviewing the Government's Stronger Super legislation, the FSC's senior policy manager Andrew Bragg said the FSC had undertaken a new assessment of FSC superannuation providers to determine the cost of the SuperStream exercise.
"We estimate that FSC members will incur capital costs of approximately $250 million to deliver SuperStream," he said. "This is in addition to the budgeted $467 million cost which the industry will incur for the ATO to build public sector capability."
Bragg said that $121.5 million was due to be levied in the 2012-13 financial year, which commences in four weeks.
"This is a significant sum which will be levied in addition to the annual Australian Prudential Regulation Authority (APRA) levy which amounted to $46.8 million in 2011-12," he said.
However, Bragg said the FSC had reservations about the lack of detail surrounding the levy in terms of the expenditure, transparency and application. In essence, they seek:
- Detailed information on the allocation of expenditure;
- Transparency of executing expenditure; and
- A consistent approach on the levy mechanism as applies to the current APRA arrangements for the superannuation industry.
Bragg said the FSC's issue was not whether cost recovery should occur, but on expenditure of levied monies and the manner in which they are raised from the industry.
"As an existing mechanism for levying superannuation funds exists through APRA, we believe consistency is paramount," he said.
"This is particularly the case as the present arrangements are applied in an equitable, transparent and efficient manner."
