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1996
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
RETIREMENT SAVINGS
ACCOUNTS SUPERVISORY LEVY BILL 1996
EXPLANATORY
MEMORANDUM
(Circulated by
authority of the Assistant Treasurer, Senator the Hon Rod Kemp)
79586 Cat. No. 96 5544 1 ISBN 0644
480173
RETIREMENT SAVINGS ACCOUNTS SUPERVISORY LEVY BILL
1996
GENERAL OUTLINE
This Bill proposes to effect full
cost recovery of the Insurance and Superannuation Commission’s (ISC)
supervision of retirement savings accounts (RSAs) by imposing a levy on RSA
providers (ie, banks, building societies, credit unions and life insurance
companies that offer, or have offered, RSAs as defined under the Retirement
Savings Accounts Bill 1996) and who lodge an annual return with the Insurance
and Superannuation Commissioner (the Commissioner).
The Bill makes
provision for the application of:
· a levy, called the retirement
savings account levy, on RSA providers. The levy would consist of two
components, the basic levy amount and the late lodgment
amount;
· the basic levy amount, which would be prescribed by
regulation but may not exceed $30,000. It would be based principally on the
amount of assets held by the RSA provider and/or the amount of RSA money they
hold. RSA providers will pay a graduated levy with a maximum levy applying
at a level which would recoup both the cost of processing the annual return
forms and all of the remaining costs of supervision;
· a late
lodgment amount, which would be calculated as a monthly amount and would be
added to the basic levy when a return is lodged after a period of 14 days grace
following the former lodgment date specified by the Commissioner. The late
lodgment amount is not a penalty and is intended to encourage timely lodgment of
returns and to cover the additional costs involved in processing annual returns
which are lodged late; and
· the late lodgment amount, which would
be 20 per cent per annum of the basic levy amount for the particular RSA
provider for the year of income to which the return refers, calculated monthly
and rounded up to the nearest whole dollar. The late lodgment amount is subject
to a minimum monthly amount, which would be 12.5 per cent per annum of the
smallest basic levy amount for the year of income to which the return refers,
calculated monthly and rounded up to the next whole dollar. The total of the
late lodgment amount would be the sum of the monthly amounts calculated.
These amendments are to commence at the same time as the Retirement
Savings Accounts Act 1996.
FINANCIAL IMPACT STATEMENT
The levy imposed by this Bill is designed
to recover the costs of the ISC’s supervisory operations in respect of
retirement savings accounts.
The costs to be recovered by the ISC from
the industry include costs relating to the initial application and approval
process (primarily 1996/1997 and 1997/1998) and ongoing supervisory costs for
1997/1998 and later years.
The costs of administering the supervisory
framework for retirement savings accounts will amount to $132 000 in the
1996/1997 financial year, $495 000 in the 1997/1998 financial year and $396 000
in the 1998/1999 financial year, and for each subsequent financial year. As
mentioned above, these costs will be fully recovered.
The above revenue
estimates do not include estimates of any late lodgment
amount.
NOTES ON CLAUSES
Clause 1 - Short
title
1. This clause provides for the Act to be cited as the
Retirement Savings Accounts Supervisory Levy Act 1996.
Clause 2
- Commencement
2. This clause provides that the Act shall come into
operation on the same day that the Retirement Savings Accounts Act 1996
takes effect, which is intended to be 1 July 1997.
Clause 3
- Application of the Retirement Savings Accounts Act
1996
3. This clause provides that section 6 (Crown to be bound)
and Part 2 of the Retirement Savings Accounts Act 1996 apply in relation
to this Act in the same way as they apply in relation to the Retirement
Savings Accounts Act 1996.
Clause 4 -
Interpretation
4. This clause defines certain expressions for the
purposes of the Act.
Clause 5 - Imposition of retirement savings
accounts levy
5. This clause provides for the imposition of the levy
in accordance with section 10 of the Superannuation Entities (Taxation)
Act 1987.
Clause 6 - Amount of levy
6. This clause
details the method for calculating the amount to be payable on lodging a
return.
7. The sum of the prescribed basic levy amount and the late
lodgment amount is the amount of levy payable on the lodgment of a return for a
year of income, with a period of grace allowed in respect of the lodgment of the
return (subclause 6(1)). The late lodgment amount is calculated
using a 20 per cent per annum figure calculated monthly on the actual basic levy
payable or a specified minimum amount whichever is greater (subclause
6(2)). If in these calculations two amounts are equal, the first
mentioned amount will be taken to be the greater amount (subclause
6(3)). Different basic levy amounts for different RSA providers may be
provided for in the regulations (subclause 6(4)).
Clause
7 - Regulations
8. This clause provides that the Governor-General may
make regulations for the purposes of prescribing one or more basic levy amounts
(clause 6 refers).