Representatives from across the financial services industry yesterday attended a roundtable hosted by Assistant Treasurer Dr Daniel Mulino to discuss the current Compensation Scheme of Last Resort (CSLR) excess levy.
Members of the Financial Industry Council of Australia (FICA) support the role of the CSLR to act as a genuine scheme of last resort for victims of financial misconduct and support the steps announced to consult on changes to the CSLR to ensure its sustainability.
FICA recognises the Minister has made tough decisions around the special levy formula to fill the current CSLR funding shortfall.
As an industry, we continue to hold significant concerns about the speed of reform to the CSLR to make it sustainable.
Consulting on reform options to ensure the CSLR is fair and sustainable in 2026 must be progressed as a priority, ahead of any discussions on managing the 2027 excess.
Certain design elements of the Scheme have created excessive costs that are flowing through to all customers of financial services, and these costs are expected to grow.
The FY26 excess levy has been confirmed to be $47.3 million, and early FY27 estimates suggest this will grow to at least $137.5 million.
Ongoing ad hoc levies to support a structurally flawed scheme send the wrong message and will simply add costs for all consumers.
Without urgent reform, consumers will continue to pay for growing flow-on costs associated with propping up the Scheme by entities unrelated to the financial misconduct.
FICA members are committed to working constructively with the Government on implementing solutions to find the best pathway forward for all consumers, and welcome Minister Mulino's genuine engagement on this issue.
FICA brings together the leading financial services industry associations in Australia - Australian Banking Association (ABA), Australian Finance Industry Association (AFIA), Australian Financial Markets Association (AFMA), Australian Investment Council (AIC), Australian Securitisation Forum (ASF), Council of Australian Life Insurers (CALI), Customer Owned Banking Association (COBA), Financial Services Council (FSC), and the Insurance Council of Australia (ICA).
