Superannuation Alert 11.11.16
Financial Services eBulletin - 11 November 2016
- On 3 November 2016, the Productivity Commission released for public comment its draft report regarding its public inquiry into data availability and use (Inquiry). The Commission notes that "[u]ntil this Inquiry, there has been no structured attempt to comprehensively review this matter in Australia, despite the enormity of the [technological] transformation under way". In the report, the Commission makes a number of draft recommendations, including that "[a]ll Australian Government agencies should create comprehensive, easy to access data registers (listing both data that is available and that which is not) by 1 October 2017. These registers should be published online and similar registers should be set up across all states and territories. Submissions are due on 12 December 2016.
- On 3 November 2016, AUSTRAC issued a media release in which it advised that it has updated its compliance guide in order to "clarify the 'safe harbour' verification procedures for individual customers with a medium or lower [Money Laundering/Terrorism Financing] risk", including amending the requirements regarding "a customer's full name".
- On 3 November 2016, APRA issued a letter notifying all RSE licensees that a final revised Prudential Standard SPS 510 Governance (SPS 510) and Prudential Practice Guide SPG 510 (SPG 510) have been released. APRA states that the changes "include requiring RSE licensees to have in place a governance framework which sets out policies and procedures to support effective governance practices". In addition, the revised SPS 510 "requires RSE licensees to have in place policies on appointing, nominating and removing directors, director tenure and board size". The updated documents (in mark-up) can be accessed by clicking here. The revised SPS 510 has also been registered on the Federal Register of Legislative Instruments (Superannuation (Prudential Standard) Determination No 1 of 2016). While SPS 510 will not take effect until 1 July 2017, APRA has advised that it "expects RSE licensees to consider the guidance in SPG 510 immediately".
- On 4 November 2016, the Supreme Court of Victoria handed down its judgment in FSS Trustee Corporation v Eastaugh & Anor  VSC 636. The case considered whether recall payments made by hospitals to doctors who are defined benefit members in the First State Superannuation Scheme are included in the meaning of salary as defined in the trust deed. The Court ultimately concluded that "a recall payment is a roster related payment" and that "[a]s such, it is included in the definition of salary as an allowance which is ordinarily payable regularly and periodically", even though it may not actually be paid regularly or periodically.
- On 7 November 2016, Treasury released two papers for consultation regarding the Government's proposal "to introduce an industry funding model for ASIC". These papers were:
- a proposals paper which "provides a high-level overview of how the industry funding framework could be applied", including "the proposed implementation and legislative framework" and "the engagement, transparency and accountability mechanisms built into the model to strengthen ASIC's accountability to consumers and its regulated entities"; and
- a supplementary paper which "provides details of ASIC's costs of regulating each sector and the metrics for how the levies could be calculated for each sector'".
- On 7 November 2016, the Attorney-General's Department released a draft project plan following the recommendation of the Minister of Justice's Report on the Statutory Review of the Anti-Money Laundering and Counter Terrorism Financing Act 2006 and Associated Rules and Regulations, which contained 84 recommendations to streamline and strengthen Australia's anti-money laundering and counter-terrorism financing regime. The project plan implements the review recommendation and proposes that the reforms be introduced in two phases: phase one will include "priority projects scheduled for completion in 2017", and phase two will include "major, long-term reforms" between 2016 and 2019 including "measures to simplify, streamline and clarify AML/CTF obligations and strengthen compliance with the FATF standards". Submissions close on 11 November 2016.
- On 8 November 2016, Shadow Treasurer Chris Bowen issued a media release in response to Treasurer Scott Morrison's announcement that the Coalition Government would be introducing its Superannuation Reform Package into the House of Representatives. The media release states that "the current proposals do not go far enough to return fairness to the system, or to deliver substantial budget repair". The media release states that Labor's response and proposed changes to the proposed Superannuation Reform Package includes:
- "[l]owering the annual non-concessional contributions cap to $75,000" (Labor believes that the current proposal "for a $100,000 annual cap on non-concessional contributions remains too generous");
- "[l]owering the High Income Superannuation Contribution threshold to $200,000" (the current proposal is a threshold of $250,000 and Labor believes that lowering the threshold would "deliver substantial improvements to the budget bottom line" while affecting "less than four per cent of taxpayers"); and
- "[o]pposing the Government’s new superannuation tax loopholes" (in particular Labor argues that "[a]llowing for catch-up concessional contributions and tax deductibility for personal superannuation contributions will overwhelmingly benefit high-income earners, while having a massive impact on the budget").
- On 9 November 2016, the following Bills were introduced into the House of Representatives:
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