Explanatory Memorandum
(Circulated by authority of the Minister for Revenue and Financial Services Minister for Women Minister Assisting the Prime Minister for the Public Service the Hon Kelly O'Dwyer MP)Chapter 3 - SuperStream gateway network governance funding
Outline of chapter
3.1 Schedule 3 to the Bill amends the APRA Act to enable the Government to recover the ongoing cost of the governance of the superannuation transaction network from the superannuation supervisory levy.
Context of amendments
3.1 The 'SuperStream' measures were enacted as part of the 'Stronger Super' reforms. These reforms were implemented in response to the 2010 'Super System Review', chaired by Jeremy Cooper.
3.2 These measures involved the development of a mandated set of rules for the electronic payment of superannuation rollovers and contributions, and for corresponding data messages for each transaction they represent. These rules are contained in section 34K of the SIS Act (for payments and information in respect of superannuation funds) and in section 45B of the RSA Act (for payments and information in respect of retirement savings accounts).
3.3 The network that is used to transmit these payments and the related messages is commonly referred to as the 'superannuation transaction network'. The network is operated by gateway operators who are subject to a mutually binding memorandum of understanding.
3.4 As at 30 June 2017, gateway operators of the superannuation transaction network facilitate connections among approximately 800,000 employers, 200 APRA-regulated funds and over 350,000 self-managed superannuation funds.
3.5 The ATO has worked closely with key industry stakeholders to move the governance of the network from a set of interim, government sponsored arrangements towards an enduring and sustainable model that is run and funded by industry. To this end, industry stakeholders have established the 'Gateway Network Governance Body' - the industry body that provides oversight of the governance of the gateway operators.
3.6 The cost of implementing the SuperStream measures, including the establishment of the Gateway Network Governance Body, has been recovered from APRA-regulated superannuation funds through the superannuation supervisory levy.
3.7 The total amount of levy payable by APRA regulated superannuation funds is governed by the Superannuation Supervisory Levy Imposition Act 1998. This Act allows the Treasurer to determine, by legislative instrument, the amount of levy that is payable for each financial year.
3.8 Subsection 50(1) of the APRA Act currently allows the Treasurer to determine, by legislative instrument, the amount of levy money that the Commonwealth is to retain in respect of the levy (or each class of levy). The Treasurer can only determine amounts for the purposes of covering certain costs. These costs include the 'implementation' of the SuperStream measures until 30 June 2018.
3.9 Although the majority of activities taken to implement the SuperStream measures will have been completed by this time, the governance of the superannuation transaction network through the Gateway Network Governance Body will have an ongoing cost.
3.10 To meet this ongoing cost, industry representatives have advocated for an industry-funded model that relies on the existing levy framework.
Summary of new law
3.11 The amendments in Schedule 3 to the Bill ensure that the Commonwealth can recover the ongoing cost of the governance of the superannuation transaction network from the superannuation supervisory levy.
Comparison of key features of new law and current law
| New law | Current law |
| In determining the amount of levy money payable to the Commonwealth to cover certain costs, the Treasurer can take into account the ongoing cost of governing and maintaining the superannuation transaction network. | In determining the amount of levy money payable to the Commonwealth to cover certain costs, the Treasurer can take into account the cost of implementing the SuperStream measures until 30 June 2018. |
Detailed explanation of new law
3.12 The amendments in Schedule 3 to the Bill enable the Treasurer to take into account the ongoing cost of governing and maintaining the superannuation transaction network in determining the share of levy money that is payable to the Commonwealth. [Schedule 3, item 1, subparagraph 50(1)(a)(iii)]
3.13 The Treasurer can also take these costs into account in making a determination in respect of each class of levy for a financial year. [Schedule 3, item 2, subparagraph 50(1)(b)(iii)]
3.14 The amendments replace the existing provisions that enable the Commonwealth recover the costs of implementing the SuperStream measures until 30 June 2018.
3.15 Recovering the ongoing costs of governing and maintaining the superannuation transaction network offsets the payments that the Commonwealth makes from Consolidated Revenue, through the ATO, to the Gateway Network Governance Body for undertaking its governance function. As the costs are recovered from the levy that is paid by industry, the Gateway Network Governance Body is effectively funded by industry (the preferred funding model that has been advocated for by industry).
3.16 For the purposes of working out the costs that can be taken into account in making a determination, the 'superannuation transaction network' is defined as the network that is used to send and receive payments and information that are required to be dealt with in accordance with the payment regulations and standards in the SIS Act and RSA Act. [Schedule 3, item 3, subsection 50(3)]
3.17 The payments and information and the payment regulations and standards that are relevant to this definition are set out in section 34K of the SIS Act and section 45B of the RSA Act.
3.18 The amendments in Schedule 3 also make consequential amendments to remove the more general references to the 'SuperStream measures' that were relevant to the cost recovery rule for implementing those measures. [Schedule 3, item 4, subsection 50(6)]
Application provisions
3.19 The amendments apply in relation to financial years starting on and after 1 July 2018. [Schedule 3, item 5]
3.20 This ensures that the Commonwealth can recover the ongoing cost of governing and maintaining the superannuation transaction network, through its funding of the Gateway Network Governance Body, from the time that the cost recovery arrangements for implementing the SuperStream measures expire.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
SuperStream gateway network governance funding
3.21 This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
3.22 The amendments in Schedule 3 to the Bill ensure that the Commonwealth can recover the cost of funding the Gateway Network Governance Body from the superannuation supervisory levy.
Human rights implications
3.23 This Schedule does not engage any of the applicable rights or freedoms.
Conclusion
3.24 This Schedule is compatible with human rights as it does not raise any human rights issues.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
