Bills Digest no. 22 2008–09
First Home Saver Account Providers Supervisory Levy Imposition
Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced: 4
September 2008
House: House of Representatives
Portfolio: Treasury
Commencement:
1 July 2009
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The Bill
imposes a levy in relation to the provision of first home saver
accounts (FHSAs).
The First Home Savers
Accounts (FHSA) initiative was a commitment made by the Australian
Labor Party during the 2007 election campaign to assist first home
buyers to save for a deposit for a home. The background to the
initiative is set out in detail in the Bills Digest for the First
Home Savers Accounts Bill 2008.[1] The First Home Saver Accounts Act 2008
(FHSA Act) received Royal Assent on 25 June and commenced on 26
June 2008. The term FHSA is defined in section 8 of the FHSA Act as
follows:
An individual s account, life policy or
beneficial interest in a trust is an FHSA
(short for first home saver account) if:
- it is described as an FHSA; and
- it is opened or issued on or after 1 October 2008 (or a
later day (if any) specified in the regulations); and
- it is:
- an account to which an [Authorised Deposit-taking Institution]
accepts, or has accepted, contributions; or
- a life policy issued by a life insurance company; or
- a beneficial interest in a trust constituted by a deed, the
trustee of which holds an authorisation as an FHSA provider.
The current Bill creates an Act to impose a
levy in relation to the provision of first home saver accounts
.[2] More
specifically, according to the Explanatory Memorandum, the Bill
introduces a framework for imposing a levy on FHSA providers to
provide funding for the Australian Prudential Regulation Authority
(APRA) to carry out its supervision of financial institutions which
offer FHSAs .[3]
On 4 September 2008,
the Senate Selection of Bills Committee resolved to recommend that
the current Bill should not be referred to any
committee.[4]
According to the Explanatory Memorandum, the
Bill is designed to recover the cost of APRA s supervision of FHSA
providers and therefore has no net financial impact . This accords
with the Australian Government cost recovery guidelines, which
state that agencies should set charges to recover all the costs of
products or services where it is efficient to do so and that any
charges should reflect the costs of providing the product or
service and should generally be imposed on a fee-for-service basis
or, where efficient, as a levy .[5]
Clause 3 of the Bill states
that the Act binds the Crown in each of its capacities. This means
that the Crown, including the executive government of the
Commonwealth, States and Territories, is not immune from the
operation of the Act.
Clause 4 provides that the
Act extends to every external Territory . The phrase External
Territory is defined in paragraph 17(pd) of the Acts
Interpretation Act 1901 to mean a Territory, not being an
internal Territory, for the government of which as a Territory
provision is made by any Act . The term Internal Territory is
defined in paragraph 18(pe) to mean the Australian Capital
Territory, the Jervis Bay Territory or the Northern Territory .
Ordinarily a Commonwealth Act does not apply to every external
Territory , unless Parliament states that the Act is to apply to
such a territory.[6]
Clause 5 contains definitions
of various terms and abbreviations used in the proposed Act. Many
of the terms are defined to have the same meaning as in the FHSA
Act.
Clause 6 imposes a levy in
accordance with subsection 8(7) of the Financial Institutions
Supervisory Levies Collection Act 1998 (Financial Supervisory
Levies Act). That subsection does not currently exist; it is the
subject of a proposed amendment to the Financial Supervisory Levies
Act contained in item 5 of Schedule 3 to the First Home Saver
Accounts (Further Provisions) Amendment Bill 2008. Item 5 adds the
following provision to section 8:
Leviable FHSA entities
- A body corporate or trustee that is a leviable FHSA entity at
any time during a financial year that ends after the commencement
of the First Home Saver Account Providers Supervisory Levy
Imposition Act 2008 is liable to pay a levy imposed in respect
of that financial year.
Clause 7 sets out the amount
of levy payable by a leviable FHSA entity (as defined in clause 5
of the Bill). The amount of levy is the sum of the restricted levy
component and the unrestricted levy component for the financial
year. The term restricted levy component is defined in
proposed subsection 7(2), and the term
unrestricted levy component is defined in proposed
subsection 7(3). Proposed subsection 7(5)
states that the Treasurer must, by legislative instrument,
determine certain amounts and percentages. Any determination made
by the Treasurer under proposed subsection 7(5)
would be subject to the tabling and disallowance procedures set out
in the Legislative Instruments Act 2003.
Proposed subsections 7(6) (9)
provide further detail on how the matters which are the subject of
the Treasurer s determination are to be worked out. While the
Minister may set different levies for a trustee of a trust; or an
authorised deposit-taking institution (ADI) or a life insurance
company, all FHSA providers will be subject to a levy under the
proposed Act. In the case of a FHSA trustee, the leviable FHSA
entity s asset value is calculated on the basis of the total value
of the assets of the FHSA trusts provided by the trust; in the case
of an ADI or life insurance company, the asset value is calculated
on the basis of all FHSAs provided by the entity: proposed
subsection 7(7).
Clause 8 sets out how the
indexation factor for a financial year is to be calculated, and
specifies what index numbers are to be used (eg Consumer Price
Index) or disregarded.
Concluding comments
The Bill simply establishes the administrative
framework for the collection of levies to fund APRA s role in the
supervision of FHSAs. As noted in the Explanatory Memorandum, the
framework contained in the Bill is modelled on the framework for
providers of retirement savings accounts.[7]
The Bill does not set the actual amount of the
levies but only provides a formula for their calculation. The
Treasurer must later determine the actual amounts and percentages
to be used in the formula, with such figures to be contained in a
disallowable legislative instrument.
Morag Donaldson
16 September 2008
Bills Digest Service
Parliamentary Library
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