First regulatory costs burdened advisers, now super
At the same time as the Federal Government seeks to roll back the regulatory impacts driving up the costs of financial advice, accountants have pointed out that superannuation funds are being similarly burdened by regulatory imposts.
The major accounting bodies have used a submission to the Senate Economics Legislation Committee dealing with new legislation covering auditing requirements for superannuation funds to point out that it will simply further push up costs to funds and their members.
In doing so, the Chartered Accountants ANZ, CPA Australia and the Institute of Public Accountants called for a whole of Government approach to regulatory policy while pointing out how the new measures would simply add to the burden already being carried by superannuation funds.
“We encourage a whole of government approach to regulatory policy. Therefore, this package of measures should be viewed holistically with other similar transparency projects either underway or recently completed for RSEs, such as:
- Portfolio holdings disclosure, which commenced on 31 December 2021.
- The member outcomes requirements, administered by the Australian Prudential Regulation Authority (APRA), which commenced on 1 January 2020.
- The design and distribution obligations, administered by ASIC, which commenced on 5 October 2021.
- The performance testing regime, administered by APRA, which commenced on 1 July 2021.
- Reporting requirements set by section 29QC of the SISA, designed to ensure that information provided to APRA as part of fund reporting can be equated with similar information required by ASIC. These are yet to come into effect.
The joint submission said that, additionally, the Assistant Treasurer and Minister for Financial Services, Stephen Jones had committed to overhaling the transparency requirements for funds.
The submission said that while the Explanatory Memorandum attaching to the legislation had claimed there would be a “low compliance cost impact” there was no proof of this and no cost-benefit analysis.
It said superannuation funds would face implementation costs in the first three to five years which might be substantial depending on entity circumstances.
“It is also the case that the Australian Securities and Investments Commission (ASIC) will incur greater costs to collect and assess the financial reports from RSEs. These costs will be passed on to RSEs through the ASIC Industry Funding Model,” it said.
“The total additional costs incurred by RSEs will vary from entity to entity. Nevertheless, we believe that these additional costs cannot be described as “low”. Ultimately, it will be fund members who will bear these additional compliance costs incurred by RSEs, which comes at a time when RSEs are being strongly encouraged to focus on cutting costs to improve member outcomes.”
More, more, more & always more Regulation.
Australian Govt,& Canberra bureaucrats are mad for ever increasing BS Regs.
World Champions of useless, over lapping, over complicated costly Red Tape Regs madness.
Any new Reg must be offset with scrapping an old one.
That should be a rule. To introduce a new rule, you must cancel out an old one. Would make life so much easier for all and would stop these Canberra halfwits adding laws to fix one problem while creating 5 more. It’s like a game of Whack a Mole for these dills but they never learn.
Worse still, while you would expect this type of over-regulation from Labor, the Fed Liberals have exceeded any stupidity Labor could have ever implemented.