Commonwealth of Australia Explanatory Memoranda

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TREASURY LAWS AMENDMENT (2022 MEASURES NO. 3) BILL 2022

                                         2022



       THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                                       SENATE




    TREASURY LAWS AMENDMENT (2022 MEASURES NO. 3) BILL 2022




             SUPPLEMENTARY EXPLANATORY MEMORANDUM



    AMENDMENTS TO BE MOVED ON BEHALF OF THE GOVERNMENT




(Circulated by authority of the Assistant Treasurer and Minister for Financial Services,
                              the Hon Stephen Jones MP)
Table of Contents
Glossary................................................................................................. iii
General outline and financial impact ...................................................... 1
                         Faith-based products - Parliamentary Amendments ... 3
                         Statement of Compatibility with Human Rights ............ 5
Glossary
This Supplementary Explanatory Memorandum uses the following abbreviations and
acronyms.

 Abbreviation                           Definition

 Bill                                   Treasury Laws Amendment (2022
                                        Measures No. 3) Bill 2022

 SIS Act                                Superannuation Industry (Supervision)
                                        Act 1993
                              Treasury Laws Amendment (2022 Measures No. 3) Bill 2022

General outline and financial impact

Faith-based products - Parliamentary
Amendments

Outline
The Parliamentary amendments to the Bill remove the framework for a supplementary
annual performance test for faith-based superannuation products from the Bill. This
will enable the Government to consider the treatment of faith-based superannuation
products as part of the broader review of the Your Future, Your Super reforms.

Date of effect

None.

Financial impact

Nil.

Human rights implications

The Parliamentary amendments do not raise any human rights issues. See Statement of
Compatibility with Human Rights -- Chapter 2.

Compliance cost impact

Nil.




                                                                                      1
               Faith-based products -
Parliamentary Amendments

Outline of chapter
1.1   The Parliamentary amendments to the Bill remove the amendments to the
      SIS Act which would provide a supplementary annual performance test for
      faith-based superannuation products.


Context of amendments
1.2   Consistent with recommendation 4 of the Productivity Commission's report,
      Superannuation: Assessing Efficiency and Competitiveness, Schedule 2 to the
      Treasury Laws Amendment (Your Future, Your Super) Act 2021 and
      supporting regulations established an annual superannuation performance test
      to hold superannuation trustees to account for product underperformance. The
      performance test measures investment performance (including investment fees
      and taxes) and administration fees for individual products.
1.3   Schedule 5 to the Bill introduces a supplementary annual performance test for
      faith-based superannuation products to allow investment in accordance with
      faith-based principles to be taken into account when assessing the performance
      of a product against benchmarks.
1.4   Following the Bill being referred to the Senate Economics Legislation
      Committee on 28 September 2022, these changes would benefit from being
      considered in the context of the broader Your Future Your Super review.
      Accordingly, the amendments will remove schedule 5 from the Bill, and the
      Government will consider this measure as part of the broader review.


Detailed explanation of amendments
1.5   Amendment 1 removes table item 5 from clause 2 of the Bill so that the table
      no longer includes commencement information for the faith-based products
      measure.
      [Amendment 1]
1.6   Amendment 2 removes Schedule 5 to the Bill. Schedule 5 to the Bill amends
      the SIS Act to provide a supplementary annual performance test for faith-based
      superannuation products.
      [Amendment 2]
                                                                                     3
               Statement of
Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.

Treasury Laws Amendment (2022 Measures No. 3) Bill 2022


Overview
2.1    The Parliamentary amendments are compatible with the human rights and
       freedoms recognised or declared in the international instruments listed in
       section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
2.2    The amendments remove the framework for a supplementary annual
       performance test for faith-based superannuation products from the Bill.


Human rights implications
2.3    The Parliamentary amendments do not engage any of the applicable rights or
       freedoms.


Conclusion
2.4    The Parliamentary amendments are compatible with human rights as it does
       not raise any human rights issues.




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