APRA levy cost to super up 147% in a decade | Australian Markets

The cost of the so-called “APRA levy” to superannuation funds has elevated by 147% over the previous decade, in accordance to the Association of Superannuation Funds of Australia (ASFA).

And the superannuation industry physique has advised Treasury that the extent of industry funding being supplied to APRA and different regulators is such that it must be incumbent on them on them to present transparency and accountability on how the money is then spent.

It mentioned that is significantly the case in circumstances the place superannuation funds themselves are dealing with better scrutiny together with the efficiency check.

ASFA has advised Treasury that for superannuation funds levies are in the end funded by way of administration charges charged to members’ accounts and calculated that for every MySuper member the cost of the levy for 2025-26 can be round $6.

However, it additionally famous that the cost can be increased different funds, relying on measurement.

“The estimated impact on members of superannuation funds varies significantly according to the size of their fund. If it is assumed that the average balances of fund members are similar regardless of the size of their fund, and equivalent to the system-wide average, then the levy amounts per member for 2025-26 are: around $4 for a large fund ($100 billion), around $8 for a medium fund ($20 billion), and around $11 for a small fund ($1 billion),” ASFA mentioned.

The ASFA submission to Treasury pointed to a latest Product Commission paper highlighting “the potentially distortive impact of industry levies on efficiency and productivity, and thus the need for the careful, considered design of regltor5 funding mechanisms”.

“The Commission finds that there is a role for industry levies to recover the cost of regulation where the benefits of that regulation involve limiting negative externalities (for example, financial sector instability), or addressing a specific market failure (for example, poor-performing providers remaining in a market).”

“On the other hand, the Commission also highlights the potential negative impacts of an over-reliance on levies (to recover the cost of regulation). In particular, where cost-recovery is not linked to regulation that relates to a specific externality or market failure, the cost (to industry) is more likely to outweigh any broader economic/social benefits. If sufficiently high, industry levies can act as a barrier to market entry – which may limit competitive dynamics and future productivity improvements.”