Legislation and regulation
Over the last quarter, the Senate Economics Legislation Committee handed down its Reports on a number of key pieces of legislation, recommending that they be passed through the Parliament. The reports handed down included on the Superannuation (Objective) Bill 2023, the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024, the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024.
In May 2024, the Digital ID Bill 2024 received Royal Assent. This bill will enable the expansion of the government's Digital ID system for use by the private sector within two years. Digital ID service providers who wish to demonstrate compliance with best practice privacy, security, proofing, and authentication standards can participate
The Modern Slavery Amendment (Australian Anti-Slavery Commissioner) Bill 2023, which was introduced into Parliament in late 2023, received Royal Assent in June and will commence within 12 months. The legislation amends the Modern Slavery Act 2018 by establishing a Commissioner as an independent mechanism for victims and survivors, businesses, and civil society to engage on issues and strategies to address modern slavery. It aims to improve transparency of supply chains and thereby help combat modern slavery in Australia and abroad.
The Accounting Standard AASB 18 Standard Presentation and Disclosure in Financial Statements was registered in June and replaces AASB 101 Presentation of Financial Statements. The Standard applies to annual reporting periods beginning on or after January 1, 2027, for for-profit entities (other than superannuation entities applying AASB 1056 Superannuation Entities). From January 1, 2028, the Standard will apply to not-for-profit private and public sector entities, along with superannuation entities applying AASB 1056.
Key superannuation rates and thresholds were also updated in the quarter and are to take effect from July 1, 2024. These include an increase in the superannuation guarantee (SG) to 11.5%; the concessional contribution cap will be $30,000 per year (up from $27,500); and the non-concessional contribution cap is increasing to $120,000. The transfer balance cap remains at $1.9 million for the 2024-25 financial year.
Consultations
The Attorney-General announced the second-stage consultation on reforming Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regime. This follows the feedback from the first round of consultation, which ran from April to June 2023 and provides more detailed proposals on the reforms. The proposed reforms extend the existing Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) to certain high-risk services, also known as tranche two services. Feedback closed on June 13, 2024.
From the Government
The Treasurer handed down the 2024-25 Federal Budget on May 14, 2024 with a projected a surplus of approximately $9.3 billion for the 2023-24 financial year. The Budget focused on the current challenges being faced with cost-of-living measures, along with health, housing and support initiatives designed to assist people through challenging times. It also included a $17.3 million commitment to promote the development of sustainable finance markets in Australia, including developing a labelling regime for financial products marketed as sustainable and funding for ASIC’s enforcement action against greenwashing and other sustainability-related misconduct.
In June, the Government announced that it had issued $7 billion of its inaugural green bond, providing investors from around the world the opportunity to support government-backed projects in Australia crucial to climate change mitigation and adaptation, and improved environmental outcomes. The money raised will go towards projects such as green hydrogen hubs, community batteries, clean transport, and programs to conserve biodiversity
The Government also recently released its Sustainable Finance Roadmap (Roadmap), outlining its plan for the implementation of key sustainable finance reforms and related measures. This includes a commitment to establishing consistent labels and disclosure requirements for investment products marketed as 'sustainable' or similar, including managed funds within the superannuation system
From the Regulators
In releasing its observations from the first phase of a review into superannuation funds’ handling of death benefit claims, the Australian Securities and Investments Commission (“ASIC”) believes that trustees can do more to assist superannuation fund members in understanding, establishing, and updating binding death nominations. ASIC expressed concern about the availability of assistance for certain individuals. For example, only four of the reviewed websites provided or offered death benefit claims information in languages other than English; only nine offered assistance for hearing-impaired people, and only seven provided a specialist contact hotline number or options for alternative forms of identification for First Nations beneficiaries. ASIC expects trustees to review these initial observations and consider how they can improve their communications about death benefit claims
In May, ASIC also released its findings from the review of superannuation fund trustees' deduction of financial advice fees from members accounts in the Review of superannuation trustee practices: Protecting members from harmful advice charges (Report 781). There was variation in the practices by the entities reviewed; three of the seven trustees did not undertake any checks of financial advice documents before deducting an advice fee from a member’s account; there was clear differences in the controls used in onboarding and ongoing monitoring of financial advisers; as well as an over-reliance on attestations that the financial advice provided met the superannuation sole purpose test. As part of its Report, ASIC has provided a number of focus areas to assist trustees to update their own procedures and practices.
Following its consultation in late 2023, the Australian Prudential Regulation Authority (“APRA”) released the finalised Prudential Practice Guide CPG 230 Operational Risk Management (CPG 230), along with its response to submissions from the consultation. The Practice Guide is designed to assist in implementing Prudential Standard CPS 230 Operational Risk Management (“CPS 230”), which takes effect from July 1, 2025. The guidance provides entities with a compliance checklist and more focused details on how they can meet CPS 230 expectations. APRA has also committed to releasing a template for the material service provider register, which entities must submit annually to APRA. Clarification on APRA’s expectations regarding fourth-party service providers was also provided in the guidance
APRA recently released its new digital Prudential Handbook (“Handbook”), as part of its strategic initiative to update the prudential architecture. Available on APRA's website, the Handbook brings together all of APRA's policy standards, guidance, and supporting information into one place. Presented in a digital format, it allows the information to be easily navigated and searched, catering to a range of users across regulated industries and the broader community
APRA issued a letter to all RSE licensees and RSE auditors in June advising of the updates to the prudential framework for superannuation regarding financial reporting and audit requirements. Following earlier consultation, the updates are effective from June 30, 2024 and apply to the following standards and guidance: Prudential Standard SPS 310 Audit and Related Matters (minor and consequential amendments), Prudential Practice Guide SPG 310 Audit and Related Matters (retired), Prudential Standard SPS 510 Governance (consequential amendments), Prudential Standard SPS 520 Fit and Proper (consequential amendments), and Prudential Practice Guide SPG 520 Fit and Proper (consequential amendments).
The Australian Transaction Reports and Analysis Centre (“AUSTRAC”) recently advised that a number of fake AUSTRAC websites had been identified and shut down. While these sites have been shut down, AUSTRAC recommends individuals remain vigilant in identifying and avoiding fake websites and possible scams. AUSTRAC provided a number of tips to help identify a fake website
