Mulino’s CSLR special levy a reform stopgap
ANALYSIS
The Assistant Treasurer and Minister for Financial Services, Daniel Mulino, has done exactly what he was expected to do with respect to the Compensation Scheme of Last Resort (CSLR) sub-sector cost overrun – imposed a broadly-spread special levy of $47.3 million.
This represents good news for financial advisers because it means the levy load has been spread across other financial services sectors. In reality, it was the only viable option open to the minister under the legislation as it currently exists. The Financial Advice Association of Australia has expressed unhappiness that, nonetheless, financial advisers continue to carry the greater burden.
The better news, however, is that Mulino has sent a clear signal that the Government recognises the need to substantially redesign the CSLR regime to make it financially sustainable and fit for purpose and that this is not something that can be achieved without a thorough consultative process.
The bottom line, therefore, is that fixing the CSLR will be a 2026/27 project with Mulino referencing “targeted reforms to deal with the issues across the whole ecosystem” with consultation to kick off in 2026.
Indeed, he kicked off the consultative process with a roundtable on the VSLR where discussion centred on the special levy and the options for post-implementation reform.
“We will also be looking at options for professional indemnity insurance, and I will work with Assistant Minister for Productivity, Competition, Charities and Treasury, Andrew Leigh, to consider how the misuse of insolvency processes can allow financial advice firms evade Australian Financial Complaints Authority (AFCA) determinations,” Mulino’s announcement said.
“Early in 2026, we will also release an options paper on post‑implementation reform of the CSLR. This will address potential structural and technical changes to the scheme itself to ensure it remains sustainable.”
What Mulino knows is that while the broader financial services sector will reluctantly accept having to make a contribution to the $47.3 million special levy, they will not accept being forced to contribute to successive special levies to fund the ongoing CSLR cost over-runs.
The Financial Services Council (FSC) warned about the unsustainability of successive levies more than a month ago and, yesterday, the Association of Superannuation Funds of Australia (ASFA) reacted to Mulino’s announcement with a warning that he was setting a dangerous precedent.
ASFA chief executive, Mary Delahunty issued a statement suggesting that including APRA-regulated funds in the levy catchment “risks undermining trust in in Australia’s compulsory retirement savings system.
Delahunty said it was wrong in principle to use Australians’ retirement savings to fund compensation for losses in other sectors through the CSLR, because most super fund members cannot benefit from the scheme.
“Super has its own compensation mechanism, already paid for by super fund members under Part 23 of the Superannuation Industry (Supervision) Act. If super fund members suffer losses, it is through those arrangements, not the CSLR, that they may be compensated,” she said.
MIS pay how much ? NOTHING
Adviser Govt income Theft continues.
Another sad joke from Canberra
All I want to know is how much more will the Adviser sector have to pay?
It’s entertaining watching people who didn’t care at toss about equity when advisers copped it, but now they’re facing the same inequity…. suddenly equity and moral hazard matter.
They can all shut up. Hypocrites. Especially Industry Super.
“ASFA chief executive, Mary Delahunty issued a statement suggesting that including APRA-regulated funds in the levy catchment “risks undermining trust in in Australia’s compulsory retirement savings system.
Delahunty said it was wrong in principle to use Australians’ retirement savings to fund compensation for losses in other sectors through the CSLR, because most super fund members cannot benefit from the scheme.
“Super has its own compensation mechanism, already paid for by super fund members under Part 23 of the Superannuation Industry (Supervision) Act. If super fund members suffer losses, it is through those arrangements, not the CSLR, that they may be compensated,” she said.”
Ok, so most of the investor in these failed MIS were invested through their super, if super is protected, why are advisers footing the bill?
Spot on Rob