Program 1.1: Markets Group
Markets Group contributes to Australia’s continuing economic development and the wellbeing of its people by fostering a well-functioning market economy, a secure financial system, and foreign investment consistent with Australia’s national interest. Improving the operation of markets works to enhance consumer and investor confidence, and foster a secure financial system and sound corporate practices.
The efficient operation of Australia’s product and services markets is supported by a combination of laws, institutions, policies and administrative practices. The Treasury provides advice to the Government on developing and implementing policies to maintain and improve markets, so that investors and consumers can have confidence and certainty in making decisions that are well-informed and free from market distortions and impediments. The Treasury also provides advice to remove impediments to competition in product and services markets, and safeguard the public interest in matters such as consumer protection.
The Treasury also supports the operations of the Australian Government Actuary, the Takeovers Panel and the Financial Reporting Council.
A key focus for the Treasury in 2011-12 was providing policy analysis and advice to improve Australia’s productivity and international competitiveness, and deepen the supply potential of the economy in the face of continued global financial turbulence. These policies focused on promoting economic growth and supporting employment, ensuring the financial system remained robust and dynamic, and ensuring that regulatory frameworks promoted macroeconomic stability and market confidence.
The Treasury also continued to monitor and provide advice on the general prudential framework applying to the banking sector, insurers and superannuation funds. The Treasury coordinated Australia’s participation in the IMF’s Financial Sector Assessment Program (FSAP). The Treasury participated actively in international forums, such as the G20 and Financial Stability Board, to enhance the regional and global financial architecture. In addition, the Treasury provided advice on foreign investment and trade policy, and continued to participate in free trade agreement negotiations.
During 2011-12, the Treasury continued to pursue sound regulatory and structural reforms to foster well-functioning markets in key financial, infrastructure, energy, housing and labour markets. This included work to further the COAG reform agenda to reduce the regulatory burden on business, including for the ongoing maintenance of a national law for consumer protection; housing supply and affordability; and as the lead agency in the multi-agency Standard Business Reporting (SBR) initiative.
The SBR program, intended to reduce the business-to-government reporting burden, was delivered on time and within budget on 1 July 2010. During 2011-12 the program focused on management of take-up targets, and the ongoing operation, maintenance and governance of the SBR solution. Participating SBR agencies include the Australian Bureau of Statistics (ABS), the Australian Prudential Regulatory Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO), and all State and Territory government revenue offices.
Markets Group’s key deliverables are to provide advice on:
- measures to promote competition, macroeconomic stability and market confidence, including providing advice on the prudential frameworks applying to the banking, insurance and superannuation sectors;
- financial sector reform options, including fostering the efficient flow of funds into, and within, the Australian economy;
- how to best influence and implement G20 decisions to strengthen the financial regulatory system;
- international cooperation in financial system regulation, corporate governance, financial reporting, auditing and corporate insolvency;
- financial services reform addressing emerging issues in investor protection;
- reform of corporate regulation, including addressing issues in corporate governance, financial reporting, auditing, corporate insolvency and market integrity;
- further reforms to executive remuneration arrangements, including simplifying remuneration reports;
- initiatives to position Australia as a leading financial services centre in the Asia-Pacific region, arising from the Government’s response to the Australian Financial Centre Forum’s report, Australia as a Financial Centre: Building on Our Strengths;
- key planks in the COAG reform agenda designed to reduce the regulatory burden facing business including the ongoing maintenance of a national law for consumer protection, national consumer credit law, cross-jurisdictional reform of personal criminal liability for corporate fault and the multi-agency SBR initiative;
- assisting the implementation of the National Broadband Network, including on structural reforms to maximise competition in the national telecommunications market;
- implementation of the Government’s Clean Energy Future policies impacting on the Energy sector;
- managing incoming foreign investment to ensure that the national interest is protected and encourage free flows of investment;
- representation of Australia’s interests on investment, financial services, competition and consumer issues in negotiating free trade agreements and, in relation to investment and competition, in multilateral forums such as the OECD and APEC;
- issues relating to the availability and affordability of insurance and reinsurance;
- improving housing affordability within Australia; and
- actuarial matters through the Australian Government Actuary which provides actuarial services to the Government, the Treasury and other agencies.
Markets Group’s key outcomes for 2011-12 were:
- developing amendments to the Banking Act 1959 to allow Australian banks, credit unions and building societies to issue covered bonds, which came into effect in October 2011;
- implementing the Government’s new ‘tick and flick’ deposit account switching service. The new arrangements came into effect on 1 July 2012 and make it easier for consumers to move their deposit accounts between financial institutions;
- making the Financial Claims Scheme (FCS) a permanent feature of Australia’s financial landscape with a new cap of $250,000 per person per Authorised Deposit-Taking Institution (ADI), which came into effect on 1 February 2012;
- implementing the ‘Government Guaranteed Deposits’ seal for ADIs to help consumers easily identify deposit products covered by the FCS;
- continuing to work on refining Australia’s arrangements for crisis management and resolution of financial institutions, including in conjunction with New Zealand’s financial regulators;
- implementing the Government’s Stronger Super reforms to optimise retirement benefits, improve competition and governance, lower costs and fees and foster confidence in superannuation;
- advancing a Housing Supply and Affordability Reform agenda, involving the examination of a range of factors that influence housing supply and demand in Australia;
- leading key reforms of the COAG Business Regulation and Competition Working Group to progress reforms in some of the 27 areas where duplicate and/or inconsistent regulation across jurisdictions imposes an unnecessary burden on business;
- developing the Competition and Consumer Legislation Amendment Act 2011, which received the Royal Assent on 6 December 2011. The legislation introduced amendments to implement the Government’s commitments to clarify the unconscionable conduct and mergers
and acquisitions provisions of the Competition and Consumer Act 2010 — taking effect on 1 January 2012 and 6 February 2012, respectively;
- developing the Competition and Consumer Amendment Act (No. 1) 2011, which received Royal Assent on 6 December 2011. The legislation introduced prohibitions on anti-competitive price signalling and information disclosures to the Competition and Consumer Act 2010, which apply to the banking sector — taking effect on 6 June 2012;
- supporting and monitoring the post-implementation phase of the Australian Consumer Law, as well as further consideration of ongoing minor amendments including the Competition and Consumer Amendment Regulations 2011 (No. 2);
- developing legislation to amend the National Consumer Credit Protection Act 2009 to give effect to the Government’s credit card reforms announced in December 2010;
- monitoring the effectiveness of the reforms introduced in the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011, which commenced on 1 July 2011, and developing legislative amendments to further strengthen Australia’s remuneration framework following the release of the Corporations and Markets Advisory Committee Report on Executive Remuneration in April 2011;
- developing legislative amendments designed to improve audit quality in Australia. The Corporations Legislation Amendment (Audit Enhancement) Act 2012 commenced on 27 June 2012;
- implementing the Corporations Amendment (Phoenixing and Other Measures) Act 2012, which commenced on 1 July 2012. The legislation provides ASIC with an administrative power to wind up abandoned companies so that workers can access the General Employee Entitlements Redundancy Scheme;
- progressing reforms to remove unnecessary regulatory burdens on directors and corporate officers, and minimise inconsistency between Australian jurisdictions in the application of personal criminal liability for corporate fault. An exposure draft of the Personal Liability for Corporate Fault Reform Bill 2012 was released for public comment;
- progressing reforms to the framework for corporate and personal insolvency regulation to promote practitioner professionalism and competency and increased efficiency in insolvency administration. A proposals paper, A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia was released for public comment on 14 December 2011;
- implementing the Government’s decision to support financial market competition in Australia, by completing the transfer of market supervision from the ASX to ASIC and facilitating the launch of Chi-X, the first market operator to compete directly with the ASX, in October 2011;
- implementing G20 commitments in relation to over-the-counter (OTC) derivatives by developing a legislative framework to allow for the flexible implementation of obligations in coordination with other jurisdictions;
- progressing reforms to introduce retail trading in Commonwealth Government Securities. The Commonwealth Government Securities Legislation Amendment (Retail Trading) Bill 2012 was introduced in June 2012;
- implementing the Future of Financial Advice reforms to improve the quality of financial advice provided to Australians through the removal of conflicts of interest and ensuring financial advisers act in the best interests of clients;
- progressing the Government’s initiative to position Australia as a leading financial services centre in the Asia-Pacific region, including work to develop an Asia Region Funds Passport;
- implementing the Insurance Contracts Amendment Act 2012, including establishing a standard definition of ‘flood’ and developing a fact sheet for home building and home and contents insurance policies;
- providing advice, in consultation with the Foreign Investment Review Board, on significant and high profile foreign investment cases of national interest and trade policy matters, and dealing with global investment, trade flows and trends, foreign government investment and trade policy responses and the implications for Australia;
- contributing to free trade agreement negotiations with Japan, China, Korea, Malaysia, India, Indonesia, the Gulf Cooperation Council and the Trans-Pacific Partnership Agreement (which involves Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam, with Canada and Mexico also joining, and consideration being given to Japan joining);
- achieving closer economic integration through initiatives that further progress the development of a single economic market between Australia and New Zealand. In August 2009, the Australian and New Zealand Prime Ministers agreed on principles for developing cross-border economic initiatives and a range of shared practical outcomes in business law;
- continuing to provide secretarial support to the Financial Reporting Council (FRC), and engaging with the FRC to develop broad strategic directions relating to the accounting and auditing standards setting processes for the public and private sectors in Australia;
- leading the ongoing governance of SBR which aims to provide a quicker and easier way for businesses to fulfil their government reporting requirements including the strategic direction, stakeholder take-up, architectural leadership and international collaboration; and
- continuing to provide advice relating to the currency system and maintaining successful operations of the Australian Government Actuary.
Analysis of performance
Following extensive consultation with stakeholders, on 21 September 2011 the Government announced its decisions on the key design aspects of the Stronger Super reforms. Stronger Super is the Government’s response to the review into the governance, efficiency, structure and operation of Australia’s superannuation system (Super System Review). The Stronger Super reforms include:
- creating a new simple, low cost default superannuation product called MySuper;
- raising the bar for those managing the superannuation system, particularly for those managing default superannuation funds in which the majority of Australians invest;
- providing APRA, ASIC and the ATO with the tools they need to improve their oversight of superannuation; and
- making the process of everyday transactions easier, cheaper and faster through the Government’s SuperStream reforms.
The Treasury provided advice to the Government in developing legislation to implement the reforms. During 2011-12, two tranches of legislation were introduced into Parliament and a third tranche released as an exposure draft for consultation.
- The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 was introduced on 3 November 2011.
- The Superannuation Legislation Amendment (Trustee Obligations and Prudential Standards) Bill 2012 was introduced on 16 February 2012.
- The Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012 was released as an exposure draft on 27 April 2012.
In August 2011, the Treasury provided a submission to the Parliamentary Joint Committee (PJC) on Corporations and Financial Services inquiry into the collapse of Trio Capital. The Treasury, in conjunction with the regulators (APRA, ASIC and the ATO), provided advice on the Government’s response to the PJC report. The Treasury continues to work with the regulators to further strengthen the regulatory framework.
The Treasury provided advice on the Government’s investment in infrastructure projects announced in the 2011-12 Budget. The Secretary to the Treasury is a member of the Infrastructure Australia Council, the Governm
ent’s key advisory body on nationally significant infrastructure. The Treasury is engaged in the activities of the COAG Infrastructure Working Group, including the Private Public Partnership Subgroup. The Executive Director of Markets Group chaired the Infrastructure Finance Working Group, which was established as part of the 2011-12 Budget. The Group, which consisted of representatives from both the public and private sectors, delivered a report to the Infrastructure Australia Council identifying potential ways to encourage greater private sector investment in infrastructure.
The Treasury provided advice on the interaction of the Government’s climate change policies and the Australian energy market, including the implementation of the Energy Security Council and secretariat support to the Council. The Treasury was actively engaged in the work of the Senior Committee of Officials of the Standing Council on Energy and Resources which provides advice on ongoing energy market reforms.
The Treasury worked with the Department of Infrastructure and Transport to progress COAG reforms in the transport sector to improve market-based frameworks and promote greater competition.
The Treasury provided advice to ministers on a number of matters arising under the National Access Regime in Part IIIA of the Competition and Consumer Act 2010. Ministers received recommendations on two declaration matters during 2011-12.
The Treasury continued to work with the Department of Broadband, Communications and the Digital Economy, the Australian Competition and Consumer Commission and other central agencies on implementing the Government’s National Broadband Network policy, and providing advice on reform in the national telecommunications market.
The Treasury also continued to work with the Department of Broadband, Communications and the Digital Economy on ensuring the efficient allocation of radiofrequency spectrum, including through spectrum licence renewals and the switchover to digital television.
The Treasury led key activities of the COAG Housing Supply and Affordability Reform (HSAR) Working Party, which is responsible for reporting to COAG through the Ministerial Council for Federal Financial Relations on issues such as planning and zoning, infrastructure charges and an audit of underutilised land. The HSAR Working Party finalised the report to COAG in November 2011, and it will be released on the COAG website following the agreement of all jurisdictions.
The Treasury advised the Government on housing supply policy, funding for housing measures in, and announced after, the 2011-12 Budget and strategic analysis of all other housing matters.
The Treasury contributed to key outputs in the Government’s competition policy legislative reform program.
The Treasury developed legislation to introduce prohibitions on anti-competitive price signalling and information disclosures to the Competition and Consumer Act 2010, which initially apply to the banking sector. These reforms took effect on 6 June 2012. The Competition and Consumer Amendment Act (No. 1) 2011 introduced the prohibitions, which were applied to the banking sector by the Competition and Consumer Amendment Regulation 2012 (No. 1).
The Treasury developed legislation to clarify the mergers and acquisitions provisions of the Competition and Consumer Act 2010 to address creeping acquisitions. The amendments were introduced as part of the Competition and Consumer Legislation Amendment Act 2011 and took effect on 6 February 2012.
The Treasury provided advice on key competition and regulatory reforms of the COAG Business Regulation and Competition Working Group (BRCWG). This included progressing reforms in some of the 27 areas where duplicate and inconsistent regulation across jurisdictions unnecessarily burdens business. It also included supporting the Assistant Treasurer in his role as chair of the BRCWG Competition Sub-committee, which oversees the eight competition reform areas, including national transport, road pricing, national energy markets and access to infrastructure.
The Treasury coordinates the Productivity Commission’s work program and advises departments and the Government on preparing terms of reference for reviews. In 2011-12, the Productivity Commission commenced five public inquiries and five commissioned studies.
The Treasury represents Australia at international forums on competition policy, and is a member of the OECD Competition Committee. The Treasury is also a member of the APEC Economic Committee and coordinates the competition policy work stream.
In 2011-12, the Treasury provided advice to the Government on Australia’s consumer policy framework including supporting the implementation and maintenance of the Australian Consumer Law (ACL).
The ACL includes provisions about unfair practices and fair trading, national unfair contract terms, consumer guarantees, provisions dealing with unsolicited consumer agreements, simple national laws for lay-by agreements, a national product safety regime and provisions on information standards that apply to services as well as goods.
To support the post-implementation phase of the ACL, the Treasury worked with both national and State and Territory consumer agencies during 2011-12 to maintain the policy and enforcement framework for the ACL. The Treasury played an active role in providing responsive policy advice on emerging issues through its role as Chair of the Policy and Research Advisory Committee which includes representatives from the States and Territories. This included considering proposed amendments to the ACL, the preparation of guidance material, and the development of responses to the Australian Consumer Survey released in June 2011.
The Treasury provided secretariat support to the COAG Legislative and Governance Forum on Consumer Affairs as well as Consumer Affairs Australia and New Zealand (including its advisory committees). The Treasury also provided secretariat support to the Commonwealth Consumer Affairs Advisory Council which in 2011-12 gave independent advice to the Assistant Treasurer on a range of consumer-related issues including through its final report Gift Cards in the Australian Market released in July 2012.
The Treasury represents Australia in international forums on consumer policy. The Treasury is a member of the OECD Committee on Consumer Policy. The department contributed to ongoing OECD processes to develop policy guidance to support consumers engaged in e-commerce.
National regulation of credit
The Consumer Credit Legislation Amendment (Enhancements) Bill 2011 was introduced into Parliament in 2011, and has passed the House of Representatives. The Bill includes proposals to introduce specific protections for seniors in respect of reverse mortgages, a national cap on costs (to replace inconsistent State and Territory caps), changes to make it more straightforward for consumers to obtain a variation of their repayments when they are in financial hardship, and reforms to address the current regulatory arbitrage between consumer leases and credit contracts.
These reforms supplement previous legislation introduced as part of the National Credit Reforms, following the 2008 COAG decision to transfer responsibility for consumer credit regulation to the Australian Government. The first phase of these reforms was implemented by the National Consumer Credit Protection Act 2009. This statute:
- replaced the State and Territory administered Uniform Consumer Credit Code with a nationally consistent consumer credit framework;
- introduced a national credit licensing system with both entry standards and ongoing conduct requirements for all persons engaging in credit activities; and
- required lenders, and those intermediarie
s who provide credit assistance, to meet responsible lending obligations, including assessing the capacity of borrowers to make the proposed repayments.
In 2011 the Treasury developed reforms to make the terms of home loan and credit card products more transparent to consumers, so that this market would become more competitive. The legislation to support these reforms, the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011, was passed in 2011.
Financial system reform
A key focus of activities during 2011-12 was providing policy analysis and advice to improve Australia’s productivity and international competitiveness, and deepen the supply potential of the economy in the wake of the global financial crisis and the global recession. These policies focused on promoting economic growth and supporting employment, ensuring the financial system remained robust and dynamic, and the regulatory framework promoted macroeconomic stability and market confidence.
Treasury officials continued to participate in the work of the G20, contributing to the development of key global reforms to financial regulation, including strengthened standards for capital and liquidity. Treasury has been implementing the Australian Government’s G20 over-the-counter derivatives market commitments, which require improved risk managements practices and transparency in derivatives markets.
The Treasury also contributed to the work of other international bodies to foster international cooperation in financial system regulation, corporate governance, financial reporting, auditing and corporate insolvency.
Regulation of particular market sectors addressed in those forums included hedge funds, credit rating agencies and over-the-counter derivatives.
Domestically, the Treasury progressed further initiatives to address regulatory concerns emerging from the crisis.
Financial sector crisis management
The Treasury continued to work with Australia’s financial regulators to implement the reforms announced as part of the Competitive and Sustainable Banking System reform package to foster competition and stability in the banking sector. Implementation of the reforms is on track and a number of measures were completed in 2011-12, including:
- legislation to amend the Banking Act 1959 to allow Australian banks, credit unions and building societies to issue covered bonds, which came into effect in October 2011;
- the ban on mortgage exit fees, which commenced on 1 July 2011;
- the announcement of a commitment by the banking industry and two major independent ATM companies to voluntarily provide free transactions at ATMs in selected very remote Indigenous communities;
- home loan key fact sheets, that allow consumers to compare different mortgages side by side, which became available from 1 January 2012; and
- the ‘Australian Government Guaranteed Deposits’ seal, to help consumers easily identify deposit products covered by the Financial Claims Scheme (FCS), now available for use.
Treasury chaired a Working Party to implement the Government’s new ‘tick and flick’ deposit account switching service. The new arrangements, which came into effect on 1 July 2012, will make it easier for consumers to move their deposit accounts between financial institutions.
The Treasury also provided advice on Australia’s financial sector crisis management arrangements, including the FCS. The FCS provides depositors and insurance policyholders with timely access to funds if a financial institution fails.
Treasury advised the Government on the implementation of its decision to make the FCS a permanent feature of Australia’s financial landscape. This decision followed a joint review of the FCS undertaken by members of the Council of Financial Regulators (CFR). A new FCS cap of $250,000 per depositor per ADI came into effect on 1 February 2012 (with transitional arrangements for existing term deposits). The Treasurer also announced a number of refinements to improve the operation of the FCS. These will be progressed in 2012-13.
Treasury has worked with Australia’s financial regulators to ensure the adequacy of our arrangements for crisis management and resolution, including assessing their consistency with new international standards being developed in this area. It has also worked with other CFR members to refine Australia’s contingency plans for dealing with financial distress. As part of this work, Australian authorities have engaged with their New Zealand counterparts under the framework of the Trans-Tasman Council on Banking Supervision.
The Treasury continued to participate in the work of the CFR and liaised with other government agencies to monitor developments in the global and domestic financial markets and provide policy advice. The department continued to monitor developments in key overseas financial markets to inform policy considerations.
G20 commitments on over-the-counter derivatives
Treasury has been implementing the Australian Government’s G20 over-the-counter derivatives market commitments made at Pittsburgh in 2009, following the global financial crisis. These commitments require improved risk management practices and transparency in derivatives markets.
During 2011-12, Treasury developed policy advice in conjunction with APRA, ASIC and the RBA, and consulted on a legislative framework to implement the G20 commitments. This framework will allow for the future creation of rules requiring the reporting of derivatives transactions, the central clearing of derivatives transactions and the use of trading venues for derivatives transactions.
The framework will be flexible enough to ensure that Australia can implement the reforms in coordination with other jurisdictions and can accommodate unexpected market changes.
Financial market infrastructure
In April 2011, the Deputy Prime Minister and Treasurer made an order under the Foreign Acquisitions and Takeovers Act 1975 prohibiting the acquisition of ASX by Singapore Exchange Limited (SGX). In the context of this decision the Deputy Prime Minister and Treasurer sought advice from the CFR on how to ensure that appropriate resolution and recovery arrangements were in place for financial market infrastructure and that regulatory influence and control were preserved in an increasingly internationalised environment.
The Treasury chairs this working group, which also comprises representatives of APRA, ASIC and the RBA.
The CFR has advised the Government on the potential measures for ensuring Australia’s regulatory system for financial market infrastructure continues to protect the interests of Australian issuers, investors and markets participants, including under a scenario where the ASX is part of a foreign-domiciled group. Further consultations have been conducted by the Treasury and regulatory reform proposals are being developed.
Market supervision and competition
In 2011-12, the Treasury implemented the Government’s decision, announced in March 2010, to support financial market competition in Australia. This involved completing the transfer of supervision of financial markets from the ASX to ASIC, and putting in place necessary regulation and other changes to allow for the launch in October 2011 of Chi-X, the first direct competitor to the ASX.
The introduction of competition has already resulted in significant savings to industry through decreased market fees and is expected to promote improvements in service quality and increased innovation.
The Treasury continues to work with ASIC in the development and ongoing review of a cost-recovery framework for market supervision in a multi-market operator environment.
Commonwealth Government Securities
The facilitation of trading of Commonwealth Government Securities (CGS) on retail f
inancial markets forms part of the banking package announced by the Deputy Prime Minister and Treasurer in December 2010. One of the objectives of the measures in that package is to secure the long-term safety and sustainability of the Australian financial system by reducing reliance on offshore wholesale funding markets. As part of this objective the Government has committed to fostering a deep and liquid corporate bond market. Trading of CGS on retail financial markets is a crucial element of this proposal as it will provide retail investors with a visible pricing benchmark for investments they may wish to make in corporate bonds.
Treasury has been coordinating the implementation of the arrangements required to facilitate the trading of CGS on retail financial markets. This has involved the development of legislative amendments to the Commonwealth Inscribed Stock Act 1911 and the Corporations Act 2001. The Commonwealth Government Securities Legislation Amendment (Retail Trading) Bill 2012 containing these amendments was introduced into Parliament on 27 June 2012.
Financial services reforms
Financial advice reform
On 26 April 2010, the Government announced the Future of Financial Advice (FoFA) reforms, which focused on improving the quality of advice and enhancing retail investor protection. Following a series of public information sessions and targeted stakeholder meetings, the Treasury developed legislation to tackle conflicts of interest that led to high profile corporate collapses such as Storm Financial, Opes Prime and WestPoint.
The Corporations Amendment (Future of Financial Advice) Act 2012 and the Corporations Amendment (Further Future of Financial Advice Measures) Act 2012 include a ban on conflicted remuneration structures, the introduction of a best interests duty for people providing personal advice, and compulsory renewal and fee disclosure obligations for ongoing advice relationships. The legislation received Royal Assent on 27 June 2012 and commenced on 1 July 2012. The requirements in the legislation are voluntary from 1 July 2012 and mandatory from 1 July 2013. Regulations to support the legislation are being progressed; the first package was made in July 2012. Further regulations are expected to be made throughout 2012-13.
As part of the FoFA reforms, the Government announced on 26 April 2010 that it would remove the exemption for accountants from holding an Australian financial services (AFS) licence when providing advice on the establishment and closing of self-managed superannuation funds. On 23 June 2012, the Government announced that it would introduce a new restricted AFS licence that will allow accountants to provide a broader range of financial advice services than was previously allowed. Regulations to implement this measure are expected to be made in 2012-13 ready for the commencement of a three-year transition period from 1 July 2013.
Statutory Compensation Scheme Review
As part of the FoFA reforms, Mr Richard St. John was commissioned to undertake a review of the costs and benefits of a statutory compensation scheme for financial services. On 8 May 2012, the Government released for public consultation Mr St. John’s report, Compensation arrangements for consumers of financial services. The report concluded that it would be inappropriate to implement a statutory compensation scheme at this time. It makes recommendations to strengthen existing compensation arrangements and to review the level of responsibility assumed by responsible entities of managed investment schemes in particular. The Treasury will provide advice to the Government in response to the report and submissions.
Improving insurance disclosure
On 23 November 2011, in response to a series of natural disasters in Queensland and parts of New South Wales, the Government introduced into Parliament the Insurance Contracts Amendment Bill 2011. The Bill contained the legislative framework for the introduction of a standard definition of ‘flood’ to be used in home building, home contents, small business and strata title insurance policies and the provision of a one-page fact sheet for home building and home contents insurance policies. On 15 April 2012, the Insurance Contracts Amendment Act 2012 received Royal Assent.
On 14 June 2012, the Insurance Contracts Amendment Regulation 2012 was made, which contained the wording of the standard definition of flood that is to be used in home building, home contents, strata title and small business insurance policies.
Consultation is continuing on a proposed Regulation for the introduction of the requirement to provide consumers with a one-page fact sheet for home building and home contents insurance policies.
The standard definition of flood, and the one-page fact sheet, will help consumers to better understand what their insurance policy covers.
Shorter Product Disclosure Statements
The requirement to provide Shorter Product Disclosure Statements (SPDS) for regulated superannuation and simple managed investment scheme products (except for superannuation platforms and multifunds) came into operation from 22 June 2012. SPDS provide retail clients with short, easy-to-read disclosure documents which contain the key information consumers need to be aware of before choosing to acquire an investment product.
In late December 2011, in order to address the need to transition to the new regulation, the Government specified that superannuation platforms and multifunds would be excluded from the SPDS regime until further consultation with industry and consumer groups could be undertaken.
Australia as a Financial Centre
In September 2008, the Government commissioned a panel of experts — the Australian Financial Centre Forum — to identify the key priority areas necessary to position Australia as a leading financial centre in the Asia – Pacific region.
The Australian Financial Centre Forum’s report, Australia as a Financial Centre: Building on Our Strengths, was released in January 2010. The Government has supported all 19 recommendations. This included recommendations on the taxation of financial services, such as commissioning a Board of Taxation review of Islamic financial products and collective investment vehicles, and regulation of financial services such as the development of an Asia Region Funds Passport and a financial services regulatory online gateway for potential overseas investors.
The Asia Region Funds Passport is being led by the Treasury and progressed under the auspices of APEC. Policy and technical workshops were held in Singapore in August 2011, Kuala Lumpur in December 2011 and Bangkok in June 2012. The Asia Region Funds Passport has been endorsed by APEC Finance Ministers in 2010 and 2011.
Financial sector trends and structures
The Treasury continues to advise the Government on emerging market trends and structures by assessing market developments and new products, monitoring trends affecting competition and efficiency in the financial sector, and considering potential developments which may affect the effectiveness of existing policy settings. In addition, the Treasury has advised the Government on developments in banking; the affordability and availability of insurance; and the operation, structure and cost of the superannuation system.
Corporations regulation reforms
Treasury has continued to review the operation of Australia’s executive remuneration framework, and to develop reforms to ensure that it remains robust and effective. The last round of reforms to strengthen the remuneration framework took effect on 1 July 2011 through the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 and associated Regulations. The reforms addressed many of the recommendations made by the Productivit
y Commission in its 2009 inquiry into Australia’s executive remuneration framework, including the introduction of the ‘two-strikes’ test.
Treasury is developing legislative reforms to implement the Government’s decision to further strengthen Australia’s executive remuneration framework. Several of the proposed reforms address recommendations made by the Corporations and Markets Advisory Committee in its 2011 report on executive remuneration, and include proposals to improve and simplify disclosures in the remuneration report, and a proposal to clawback remuneration in the event that it is later found to be materially misstated.
Reforms have been developed to remove unjustified or excessive regulatory burdens on directors and corporate officers, and to enhance consistency between Australian jurisdictions in the application of personal criminal liability for corporate fault. These reforms will reduce the risk that directors will be prosecuted for misconduct in situations where they could not reasonably be expected to prevent the misconduct. The reforms form part of the Commonwealth’s obligations under the COAG Seamless National Economy National Partnership to implement a coordinated national approach to directors’ liability. A draft Bill to progress this reform, the Personal Liability for Corporate Fault Reform Bill 2012, was exposed for public comment.
The Corporations Amendment (Phoenixing and Other Measures) Act 2012 (the Phoenixing Act), which provides ASIC with an administrative power to wind up abandoned companies so that workers can access the General Employee Entitlements Redundancy Scheme, took effect from 1 July 2012. Treasury also consulted on reforms to impose personal liability on directors engaged in phoenix activity using similar company and business names.
On 14 December 2011 the Parliamentary Secretary to the Treasurer and the Attorney-General jointly released a proposals paper, A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia. The paper sets out a framework for corporate and personal insolvency regulation that promotes a high level of practitioner professionalism and competency, enhances transparency and communication between insolvency practitioners and stakeholders, and promotes increased efficiency in insolvency administration. The Phoenixing Act also removed the burden of advertising corporate insolvency notices in newspapers by providing for the establishment of a new corporate insolvency notices website administered by ASIC.
A number of important reforms to enhance audit quality were identified in stakeholder feedback to the Treasury consultation paper Audit Quality in Australia: A Strategic Review in 2010. The Government has addressed a number of these reforms in the Corporations Legislation Amendment (Audit Enhancement) Act 2012, which was passed with bipartisan support on 18 June 2012 and received Royal Assent on 27 June 2012.
These reforms include the extension of audit partner rotation periods by two years under certain circumstances; the publication of annual transparency reports by certain audit firms; replacing the Financial Reporting Council auditor independence function with a strategic, high-level ministerial audit quality advice role; allowing ASIC to issue audit deficiency reports in certain circumstances; and allowing ASIC to communicate directly with an audited body on certain audit matters.
The Parliamentary Secretary to the Treasurer released a discussion paper in November 2011 canvassing options for possible amendments to the test for payment of dividends (dividends test), titled Proposed Amendments to the Corporations Act. The discussion paper addresses stakeholder feedback following reforms to the Corporations Act 2001 in 2010, which included the replacement of the former profits-based dividends test with a net assets-based dividends test.
Treasury is preparing advice on further amendments to the dividends test in response to submissions to the discussion paper.
Advice on, and processing of, individual foreign investment proposals
Foreign investment proposals that fall within the scope of Australia’s foreign investment policy or the Foreign Acquisitions and Takeovers Act 1975 (the Act) are examined to determine whether they are contrary to Australia’s national interest.
Foreign persons are required to notify the Treasurer when entering into an agreement to acquire an interest in certain types of Australian real estate or a substantial interest1 in an Australian business or corporation valued above $244 million.2 All foreign governments and their related entities must notify and get prior approval before making a direct investment in Australia, regardless of the value of the investment. Foreign governments and their related entities also need to notify and get prior approval to start a new business or to acquire an interest in land (except when buying land for diplomatic or consular requirements).
During 2011-12, the Foreign Investment Review Board (a non-statutory body which advises the Treasurer on foreign investment matters) provided advice to the Treasurer on major proposals. The General Manager of the Foreign Investment and Trade Policy Division is the Executive Member of the Foreign Investment Review Board.
Proposals are initially examined by the Treasury, in its role as secretariat to the Foreign Investment Review Board. Under the Treasurer’s authorisation, senior Treasury officers make decisions on less complex proposals that are not sensitive; this accounts for the majority of proposals. The Treasury also undertakes associated compliance work.
In examining large or otherwise significant proposals, the Treasury consults with Commonwealth and State government departments and authorities with responsibilities relevant to the proposed activity, to assist in assessing the implications of proposals. While the majority of proposals proceed without objection, the Treasurer has powers under the Act to prohibit proposals that are contrary to the national interest, or to approve them subject to conditions that are considered necessary to ameliorate any national interest concerns. Most proposals are decided within the 30 day statutory period.
Additional information on Australia’s foreign investment screening arrangements, including statistics on foreign investment, is provided on the Foreign Investment Review Board’s website at www.firb.gov.au.
Advice on investment and trade policy
The Treasury provides advice to the Government on general foreign investment and trade policy matters. This has included advice on global investment and trade flows and trends, foreign government investment and trade policy responses, and the implications for Australia. The Treasury also provides advice on Australia’s participation in multilateral, regional and bilateral investment and trade agreements.
Representation in international forums
The Treasury provides policy input on international investment issues in multilateral forums such as the World Trade Organization and the OECD, in regional forums such as APEC, and bilaterally through free trade agreements, Investment Promotion and Protection Agreements and other bilateral partnerships. The Treasury is involved in negotiating investment, financial services and competition-related provisions in free trade agreements.
Trade agreements/closer economic cooperation
The Treasury continued its involvement in Australia’s ongoing free trade agreement negotiations with Japan, China, K
orea, India, Indonesia, the Gulf Cooperation Council and the Trans-Pacific Partnership Agreement (which involves Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam; Canada and Mexico have also joined and consideration is being given to Japan joining). The Treasury participated in these negotiations together with the Department of Foreign Affairs and Trade and a range of other Australian Government agencies.
On 22 May 2012, the Malaysia-Australia Free Trade Agreement was signed and will enter into force once Australia and Malaysia have completed their domestic ratification procedures. Treasury participated in the negotiations.
OECD Investment Committee
Australia is represented at OECD Investment Committee meetings by a senior Treasury official. The committee enhances the contribution of international investment to growth and sustainable development worldwide, by advancing investment policy reform and international cooperation.
The committee also oversees the operation of the OECD Guidelines for Multinational Enterprises, a voluntary code providing recommendations for responsible business conduct in labour relations, human rights, the environment, bribery, tax and consumer welfare. As a member of the OECD, the Government promotes and implements the guidelines. This responsibility rests with the Treasury and is performed by the Australian National Contact Point, who is a senior executive of the Foreign Investment and Trade Policy Division.
In 2011-12, the Australian National Contact Point received one specific instance complaint under the guidelines. This complaint involved the operations of an Australian multinational operating in Chile. This matter was transferred to the Chilean National Contact Point as the corporation involved in the joint venture mining operation, which is the subject of the complaint, is in Chile; the key company representatives that have day-to-day decision-making responsibilities for these projects are based in Chile; and the Australian National Contact Point is not in the best position to assess whether the actions by the company in relation to the projects are valid or illegal under Chilean law; this will have some bearing on any consideration of the matter under the Guidelines.
The Treasury is a member of the APEC Economic Committee and coordinates the competition policy work stream.
International Financial Reporting Standards regional policy forum
The sixth International Financial Reporting Standards regional policy forum, which was held in Malaysia in March 2012, was attended by many jurisdictions from the Asia-Oceania region. Australia actively participated in the forum through representatives from the Treasury, the accounting standard setters, the auditing standard setters and professional accounting bodies. The theme of the forum was ‘Convergence and Beyond, Navigating Change’.
IMF Financial Sector Assessment Program
Australia is participating in the IMF’s Financial Sector Assessment Program, which is examining the stability of the Australian financial system and Australia’s compliance with international standards relating to banking, insurance and securities. The Treasury is coordinating Australian authorities’ engagement with the IMF as part of this process.
Coordination of business law with New Zealand
In August 2009, the Australian and New Zealand Prime Ministers agreed to principles and a range of shared short- and medium-term practical outcomes in business law for developing the Single Economic Market. The principles are:
- persons in Australia or New Zealand should not have to engage in the same process or provide the same information twice;
- measures should deliver substantively the same regulatory outcomes in both countries in the most efficient manner;
- regulated occupations should be able to operate seamlessly between each country;
- both governments should seek to achieve economies of scale and scope in regulatory design and implementation;
- products and services supplied in one jurisdiction should be able to be supplied in the other;
- the two countries should seek to strengthen joint capability to influence international policy design; and
- outcomes should seek to optimise net Trans-Tasman benefits.
The range of shared outcomes include insolvency law, financial reporting policy, financial services policy, competition policy, business reporting, corporations law, personal property securities law, intellectual property law and consumer policy.
A Trans-Tasman Outcomes Implementation Group comprising senior officials from the Australian and New Zealand governments has been tasked with overseeing and, wherever possible, accelerating the progress of the reform agenda. The Treasury and the New Zealand Ministry of Economic Development co-chair the group.
Trans-Tasman Accounting and Auditing Standards Advisory Group
The Trans-Tasman Accounting and Auditing Standards Advisory Group (TTAASAG) comprises representatives from the accounting and auditing standard setters, the professional accounting bodies, and the policy makers of both Australia and New Zealand. TTAASAG’s focus is to ensure that the financial reporting and auditing frameworks of both countries do not unnecessarily impede Trans-Tasman business activity. During 2011-12, the Group continued to work together to progress a range of reforms designed to ensure greater commonality and alignment between the two frameworks.
Trans-Tasman Council on Banking Supervision
The Trans-Tasman Council on Banking Supervision reports to the Treasurer and the New Zealand Minister of Finance on promoting a joint approach to deliver a seamless regulatory environment for banking services. The Secretaries to the Treasuries of Australia and New Zealand jointly chair the Council; its membership also includes senior officials from the financial system regulators.
The Treasury has pursued the Council’s work program, focusing on improved cooperation on crisis management.
OECD Insurance and Private Pensions Committee
The Treasury has provided the Australian representative to the OECD Insurance and Private Pensions Committee, which also includes the Working Party on Private Pensions and the Working Party on Government Experts on Insurance. In 2011-12, the committee focused on issues arising in the financial crisis that were relevant to insurance sectors and private pension funds across member countries. These included crisis resolution options, corporate structures, consumer protection and accounting standards. It also undertook further work on the OECD guidelines on insurer corporate governance in cooperation with the International Association of Insurance Supervisors.
Financial Reporting Council
The Financial Reporting Council (FRC) is the peak body responsible for overseeing the effectiveness of the financial reporting framework in Australia. Its key functions include the oversight of the accounting and auditing standards-setting processes for the public and private sectors, providing strategic advice in relation to the quality of audits conducted by Australian auditors, and advising the Minister on these and related matters to the extent that they affect the financial reporting framework.
Treasury provides secretarial support to the FRC and in relation to its quarterly meetings, and is also responsible for advising the Minister on the appointment of members to the FRC to ensure that it is broadly representative of stakeholders (including Treasury) with an interest in financial reporting. Treasury continues to maintain a close relationship with the FRC, and engages in high-level discussions with the FRC which benefits both the Treasury in the development of policy advice, and the FRC in guiding their strategic direction and activities.
During 2011-12, the FRC established five Task For
ces — Integrated Reporting, Managing Complexity in Financial Reporting, Board Education, Audit Quality, and Public Sector Financial Reporting. Treasury has been actively engaged with the activities of the various Task Forces, by providing secretarial support to the Task Forces, fostering dialogue with stakeholders on the issues explored by the Task Forces, liaising with the Task Forces to form their strategic direction and providing assistance to key outputs.
The Takeovers Panel contributed to well-functioning securities markets in Australia by dealing with 16 applications, which are essentially disputes relating to takeovers made under the Takeovers Chapter of the Corporations Act 2001 and other control transactions. The Panel, a peer review body with regulatory functions, has 52 members who are specialists in mergers and acquisitions either as investment bankers, lawyers, company directors or other professionals. In resolving disputes, the panel helps to ensure that acquisition of control over voting shares in listed and widely-held companies occurs in an efficient, competitive and informed market; security holders and directors are given enough information; and security holders have a reasonable and equal opportunity to participate in any benefits of a proposal. The Panel also publishes guidance notes to help foster market confidence and efficiency.
In 2011-12, the panel:
- considered a number of applications alleging association considered a number of high profile applications;
- considered some significant and complex applications including truth in takeovers policy, applications of Chapter 6, bidder statement disclosure and rights issues; and
- updated the guidance note on bidder’s statements (renamed takeover documents), which is the last guidance note to be rewritten under the program commenced in 2008 to review and simplify the Panel’s guidance.
Financial Reporting Panel
The Government confirmed the closure of the panel in 2012 due to lower than expected referral rates. The Corporations Legislation Amendment (Financial Reporting Panel) Bill 2012 to effect the closure was introduced into Parliament on 21 June 2012.
Standard Business Reporting
SBR is a multi-agency initiative, led by Treasury and co-designed by Commonwealth, State and Territory government agencies and the private sector, to reduce the business-to-government reporting burden by providing standardised electronic reporting. SBR simplifies financial reporting to government and makes it a by-product of natural business systems. Under SBR, Australian businesses are able to use SBR-enabled software to prepare and lodge over 400 government forms directly from their software to the agencies in the program — APRA, ASIC, the ATO and the State and Territory revenue offices.
SBR was launched on 1 July 2010 and the SBR program continued to focus in 2011-12 on extending business usage of SBR’s three core capabilities: the SBR online gateway, which enables reports to pass between business and government (in both directions); the SBR taxonomy (harmonised dictionary of common reporting terms); and the AUSkey credential (single secure log on for business).
While AUSkey is widely used by business (about three million times per month by the end of 2011-12), the use of SBR for report lodgment was constrained until this year by the limited availability of SBR-enabled software in the market. However, the steady increases in SBR lodgments in the December and March quarters of 2011-12 accelerated sharply in the June quarter, as new SBR-enabled software became available. By the end of the year, there were more than 80 commercial software providers licensed to develop SBR-enabled software; 15 had product in the market and this number is expected to increase significantly over the next 12 months.
Governments across Australia have endorsed SBR, which formed part of COAG’s broader agenda to develop a seamless national economy (SNE). The Productivity Commission’s May 2012 review of the SNE, Impacts of COAG Reforms, concluded by confirming that the potential benefits of SBR for business are likely to be large, of the order of $500 million per annum. The program is continuing to work at the realisation of these benefits, including through engagement with key software developers to encourage and support the development of SBR-enabled financial/accounting and payroll software products for use by businesses and reporting professionals.
Two developments during the year have strengthened the business case for SBR and have contributed positively to the development of SBR-enabled software: the Government’s announcement, in September 2011, that SBR is to be the standard platform for superannuation transactions under SuperStream; and the ATO’s announcement that it is adopting SBR technology to rationalise its online reporting channels by 1 July 2015.
While continuing to work at embedding the use of the existing SBR capabilities more widely across the business community, the program is increasingly focusing on the next stage of SBR’s development. It is contributing to the work of the COAG Taskforce, which was asked by COAG in April 2012 to report on specific ways to remove overlaps in Commonwealth and State and Territory reporting obligations, including through the expanded use of online business reporting. COAG’s commitment to addressing the ‘Red Tape Challenge’ by reducing reporting burdens on business is part of its new set of reform priorities.
The Treasury provided advice to Treasury portfolio ministers on a range of currency-related matters. It chaired the Royal Australian Mint Advisory Board to assist the Mint to develop its policy and administer its initiatives. The Treasury also assisted the Perth Mint in relation to its currency determinations (legislative instruments) which are tabled in Parliament before the release of numismatic (collector) coins.
Statutory and other procedural requirements
Financial sector levies
During 2011-12, the Treasury, in conjunction with APRA, consulted with industry and provided advice to the Government on the determination of financial sector levies which support APRA’s operations.
Review of need for Terrorism Insurance Act 2003
On 1 July 2003, the Australian Government established a terrorism insurance scheme to minimise the wider economic impacts that flowed from the withdrawal of terrorism insurance following the terrorist attacks of September 2001. The Terrorism Insurance Act 2003 requires that the Act be reviewed at least once every three years. A key recommendation of the 2012 Review was the payment of a dividend from the Australian Reinsurance Pool Corporation, the statutory body established to manage the scheme. Following the Government’s agreement, the Treasury is working with the Australian Reinsurance Pool Corporation to implement the review’s other recommendations. The Act will be reviewed again in 2015.
In October 2011, a paper was circulated to the Secretaries Board requesting the departmental coordination of sunsetting legislation. The majority of Treasury instruments are managed by Markets Group and Revenue Group.
The sunsetting regime of the Legislative Instruments Act 2003 provides that most legislative instruments (including Regulations) cease automatically 10 years after they commence, to encourage a regular review process. Upon review, agencies can remake or seek exemptions for the instruments that they administer, or allow them to sunset if they are no longer required. Instruments start sunsetting from 2015.
The Office of Legislative Drafting and Publishing provided Treasury with a list of legislative instruments for review in October 2011, and is currently preparing a paper regarding the next sta
ge of the process for the Secretaries Board.
In 2011-12, The Treasury provided secretariat services for the Working Party implementing the Government’s new ‘tick and flick’ deposit account switching arrangements. The Working Party was chaired by Treasury and consisted of representatives from the financial services industry, financial sector regulators and consumer groups. The new account switching arrangements were implemented on 1 July 2012.
The Treasury provided secretariat services to the Ministerial Council for Corporations (MINCO). The Treasury also assisted ministers to fulfil the Government’s obligations under the Corporations Agreement 2002. A streamlining project initiated by COAG in 2011 resulted in changes to the ministerial council system. MINCO now operates as the Legislative and Governance Forum for Corporations (meeting as the Ministerial Council for Corporations). Most work priorities and operational arrangements are continuing as with the former MINCO. However, work performed by MINCO that did not fall within the new terms of reference ceased or was transferred to other agencies.
The Treasury provided secretariat support for the Financial Reporting Council, which met four times during 2011-12. This statutory body provides strategic oversight of the accounting and audit standard-setting processes, including the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB). The AASB deals with the setting of accounting standards for the public and private sectors of the Australian economy, while the AUASB focuses on the development and formulation of Australian Auditing Standards.
The Treasury provided secretariat support to the Financial Sector Advisory Council, which brings together a range of senior financial market participants to provide advice to the Government on policies to facilitate the growth of a strong and competitive financial sector.
The Treasury provided secretariat support to the Insurance Reform Advisory Group, which provides a forum in which consumers, insurers and other stakeholders can be heard by government and can contribute to the fair, efficient and effective regulation of the general and life insurance industries.
The Treasury also provided secretariat support for the COAG Business Regulation and Competition Working Group Competition Sub-committee, which is chaired by the Assistant Treasurer. The sub-committee oversees the eight competition reform areas under the National Partnership to Deliver a Seamless National Economy and met twice in 2011-12.
The Treasury provided secretariat services for the Natural Disaster Insurance Review. The secretariat also included staff from the Australian Reinsurance Pool Corporation, and APRA. The Government commissioned the review on 4 March 2011 to examine the arrangements for the insurance of the assets of Australian individuals, small businesses and governments for damage and loss associated with flood and other natural disasters. The Review presented its report to the Government on 30 September 2011, at which time the Secretariat was disbanded.
The Treasury provided secretariat support to the Energy Security Council, which was established as part of the Government’s Clean Energy Future package. The Council’s purpose is to provide assurance and advice to the Treasurer in the event that systemic risks to energy security emerge from financial impairment arising from any source, including from the introduction of carbon pricing. The Council is responsible for assessing two categories of applications for assistance, including: loans for generator owners who need to refinance their debt if finance on reasonable commercial terms is not otherwise available; and loans or other assistance to seek to address systemic risk to energy security in the light of the financial distress of an energy market participant.
In addition, the Treasury provided secretariat support to the National Housing Supply Council (NHSC), which met four times during 2011-12. The NHSC provides forecasts, analysis and advice on the adequacy of land supply, and construction activity to meet housing demand and improve affordability.
Australian Government Actuary
The Australian Government Actuary operates in a competitive and contestable market for actuarial services. Income from consultancy services relative to total costs is, therefore, a primary indicator of performance. The Australian Government Actuary operates a special account to ensure its financial operations are managed properly and transparently. At 30 June 2012, the account was in a sound financial position.
Demand for service was again high during 2011-12.
Australian Government Actuary consultancy services typically involve analysing uncertain future financial flows using financial modelling techniques, documenting the analysis and presenting the results to clients.
Departments which sought advice included Defence; Attorney-General’s; Industry, Innovation, Science, Research and Tertiary Education; Families, Housing, Community Services and Indigenous Affairs; Health and Ageing; Finance and Deregulation, and Veterans’ Affairs. Centrelink and the Australian Taxation Office also sought advice.
Feedback from these agencies indicates they were generally satisfied with the advice received, and its value as an input in achieving their objectives.
Services to the Treasury
The Australian Government Actuary contributed its technical expertise on policy issues, including the superannuation system and insurance matters. The Australian Government Actuary has provided assistance with the Natural Disaster Insurance Review and the National Disability Insurance Scheme.
The office operates under the direction of an internal advisory board comprising three senior officers from the Treasury, including the Australian Government Actuary. The board reviews financial performance and oversees the strategic direction of the office.
1 A substantial interest is defined as an interest of 15 per cent or more for an individual foreign person, or an interest of 40 per cent or more for two or more foreign persons, and their associates.
2 Under the Australia-US Free Trade Agreement, higher thresholds apply for US investors. From 1 January 2012, the threshold is $1,062 million except for acquisitions involving US government entities or in prescribed sensitive sectors.