Issue 883, 20 December 2022
In this issue:
Housing Australia Future Fund: consultation
Treasury has released a consultation package of draft legislation to establish the Housing Australia Future Fund, Housing Australia and the National Housing Supply and Affordability Council. The package is designed to progress implementation of the Government’s commitments, prior to the Election and arising from the Jobs + Skills Summit, in relation to housing. These include facilitating institutional investment (including by superannuation funds) in social and affordable housing.
Program delivery will be guided by a package of reforms, including:
- a National Housing Supply and Affordability Council (the Council) that will be established to independently advise the Australian Government on options to improve housing supply and affordability;
- expanding the remit of the National Housing Infrastructure Facility (NHIF) to directly support new social and affordable housing (this has been achieved via amendments to the NHIF’s mandate, see ASFA Action issue 880)
- expanding the remit of the National Housing Finance and Investment Corporation (to be renamed Housing Australia) to deliver the Government’s social and affordable housing programs
- the National Housing and Homelessness Plan, which will set out the key short, medium and longer term reforms needed to improve housing and homelessness outcomes across the spectrum.
Amongst other things, Housing Australia will have primary responsibility for delivering on the Government’s commitment to deliver 30,000 new social and affordable homes over five years, leveraging its existing capability and relationships with the community housing sector, institutional investors and state and territory housing authorities.
If you have any feedback you would like ASFA to consider in relation to the consultation package, please forward it to Julian Cabarrus by close of business Monday 9 January.
Determining who is an ‘employee’: draft ATO ruling and compliance guided
The ATO has issued for consultation a draft taxation ruling and practical compliance guideline (PCG) considering when a person is an ‘employee’.
- Draft Taxation Ruling TR 2022/D3 Income tax: pay as you go withholding – who is an employee? explains the Commissioner’s approach in applying two recent High Court decisions to the definition of ‘employee’ for the purpose of the income tax withholding requirements in the Taxation Administration Act 1953. While the draft ruling also aids in understanding the ordinary meaning of an ‘employee’ for superannuation guarantee purposes, it is not legally binding on the Commissioner for that purpose.
- Draft PCG 2022/D5 Classifying workers as employees or independent contractors – ATO compliance approach outlines the Commissioner’s compliance approach for businesses that engage workers and classify them as employees or independent contractors. The PCG is relevant for a variety of tax and superannuation obligations for both the engaging entity and the worker, where the worker contracts directly with the engaging entity.
If you have any feedback you would like ASFA to consider in relation to the drafts, please forward it to Harvey Russell by close of business Friday 27 January.
APRA MySuper Heatmap
APRA has published its 2022 MySuper Heatmap, evaluating every MySuper superannuation product’s performance in the areas of investment returns, fees and costs and long-term sustainability of member outcomes. To further enhance industry transparency and product comparison, the Heatmap includes each product’s result under the Annual Performance Test.
APRA’s key findings from this year’s heatmap include:
- fees and costs have fallen for most MySuper products. APRA estimates that 8.1 million members (56 per cent of member accounts) have experienced a drop in disclosed total fees and costs since the 2021 heatmap was published. The total estimated annual savings to members is $210 million
- 28 MySuper products have closed since APRA released the first heatmap in 2019. As a result, 1.5 million member accounts, containing $51.6 billion in member benefits, have been transferred to other products
- 350,000 fewer members are in MySuper products with “significantly poor” investment performance than in 2021, however, around 800,000 members’ accounts remain in these ‘underperforming’ products
- most superannuation funds posted negative growth over the past three years across one or more of the heatmap’s sustainability metrics.
APRA Deputy Chair Margaret Cole said: “APRA expects that trustees with underperforming products will consider options to transfer members or otherwise restructure their businesses, particularly where sustainability pressures are significant”.
APRA had been expected to also publish a heatmap for choice products, but this has been deferred until early 2023. APRA has indicated it is “committed to the publication of the Choice Heatmap, which is being updated using data submitted through the new APRA Connect system for the first time”.
In addition to the MySuper Heatmap, APRA has published an insights paper and a methodology paper as well as updates to frequently asked questions on its heatmaps.
APRA Superannuation Data Transformation: updated FAQs
APRA has updated its frequently asked questions (FAQs) in relation to its Superannuation Data Transformation (SDT) project.
In this most recent update, APRA has:
- updated its General FAQ 1.25, in relation to the revocation of pre-SDT reporting standards that were replaced under Phase 1 of the SDT project
- published a new General FAQ 1.26, indicating it intends to publish the next Quarterly Superannuation Industry Publication and the first Quarterly Product-level Superannuation Statistics “in early 2023”.
Amendments to financial services laws: regulations
The Government has registered regulations amending financial services laws, consequential to measures currently before Parliament in the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 (see ASFA Action issue 880 in relation to this Bill).
The amendments, set out in the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Regulations 2022:
- implement recommendations and other suggested improvements identified by the Australian Law Reform Commission (ALRC) in Interim Report A of its Review of the Legislative Framework for Corporations and Financial Services Regulation. Interim Report A, and the ALRC’s Review more broadly, forms part of the formal response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in 2019, which noted the law needed to be simplified to ensure its intent is met.In particular, the Regulations amend the Corporations Regulations 2001 to clarify the meaning of several defined terms, remove redundant definitions, and make broad improvements in relation to the use of definitions. These changes facilitate a more adaptive, efficient, and navigable legislative framework which help ensure that the legislative intent is met
- amend one prescribed form in the Australian Securities and Investments Commission Regulations 2001 (Form 1) and two prescribed forms in the Corporations Regulations (Forms 5249 and 588) so they align with the ASIC Act, which ASIC to hold hearings and examinations using virtual enquiry technology.
The amendments were released separately for consultation in August-September this year -see ASFA Action issue 866 for background.
Financial adviser registration requirement deferred
The Government has amended the Corporations Regulations 2001 to delay the requirement for financial services licensees to register financial advisers on the Financial Advisers Register until 1 July 2023.
The Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 introduced a central registration requirement for financial advisers, in line with Recommendation 2.10 of the Financial Services Royal Commission. Registration was proposed to occur in two stages – stage one being a oneoff registration process administered by the ASIC using the Financial Advisers Register.
In early November ASIC and the Government announced that the stage one registration requirement would be delayed, to give ASIC time to implement improvements to the operation of the registration process (see ASFA Action issues 877 and 876).
The Government has now registered the Corporations Amendment (Registration of Relevant Providers) Regulations 2022 to give effect to this announcement. The Regulations amend the Corporations Regulations 2001 to delay the requirement for financial services licensees to register financial advisers on the Financial Advisers Register for six months to 1 July 2023.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
