Last week, the government released edition one of the Regulatory Initiatives Grid (RIG), a new tool that aims to “better streamline and coordinate regulation in the financial sector”.
The RIG lists announced and publicised reform priorities and initiatives that will materially affect the financial sector over the next two years.
In a joint statement, Treasurer Jim Chalmers, Financial Services Minister Stephen Jones, and assistant minister for competition, charities and Treasury Andrew Leigh said the RIG will make it “simpler and easier to do business” in the financial services sector.
“It complements our other efforts to better target regulation across the economy, including through the biggest overhaul to merger settings in 50 years and our changes to strengthen and streamline the foreign investment regime,” the statement said.
“The RIG will provide clear visibility of regulatory changes that will materially affect financial service providers over the next two years and help these businesses engage with the government and regulators more effectively.”
The RIG will be updated twice a year and include information from a range of financial sector regulators, however, in order to incorporate feedback on the first edition, the second edition won’t be published until the second half of next year.
After this initial longer period, the RIG will be updated and published in March and September every year.
“It will particularly support smaller financial sector businesses navigate upcoming changes to the regulatory environment and help them plan with a greater level of confidence and certainty,” the ministers said in the statement.
“More confidence and certainty will encourage competition and improve productivity in the financial services sector.”
Among the measures included in the RIG is the Delivering Better Financial Outcomes reforms.
“Legislation implementing the second tranche of reforms will be introduced following public consultation. Subordinate legislation will be developed and consulted on subject to passage of primary legislation,” the RIG detailed.
“ASIC intends to issue regulatory guidance to assist implementation of the legislation.”
It also includes a timeline for the legislation, putting consultation on exposure draft legislation for the second tranche in the first quarter of 2025, however there is no additional detail beyond this ballpark figure.
The controversial $3 million super tax changes – the Better Targeted Superannuation Concessions bill – also remains on the agenda in the RIG.
Under the changes, an additional 15 per cent tax would be charged on earnings attributable to superannuation balances exceeding $3 million.
Despite considerable pushback from industry stakeholders, particularly on the taxation of unrealised capital gains, that saw the measures all but abandoned at the end of the parliamentary sitting year, it has been put back on the agenda over the last week.
According to the RIG, the tax is still intended to commence on 1 July 2025 “subject to passage of the bill through Parliament”.
The Association of Superannuation Funds of Australia has welcomed the release of the RIG, with chief executive Mary Delahunty saying a “better coordinated regulatory change program was on our Christmas list, and the superannuation sector is pleased to see it delivered”.
According to ASFA, the operational impact of implementing regulatory initiatives shouldn’t be underestimated.
“Super is a fast-changing and highly regulated sector. Ensuring regulatory changes are well coordinated and sequenced helps keep implementation costs down, ultimately benefiting working Australians by ensuring every dollar in super works harder for their retirement,” Delahunty said.
“Progress on the grid will assist our members to collaboratively find efficiencies and address common issues. This effort will benefit all Australians by supporting a more resilient and cost-effective superannuation system.”
