iscover SMC pushes back on inclusion of APRA-regulated super funds in CSLR
SuperThe Super Members Council has pushed back against the inclusion of APRA-regulated super funds into the CSLR levy following the Shield and First Guardian Master Fund failures.
The Super Members Council (SMC) has urged the government to rethink its plan to include APRA-regulated super funds in the Compensation Scheme of Last Resort (CSLR) levy, arguing it would place undue burdens on members who had “nothing to do” with financial misconduct.
The CSLR was launched to compensate victims of financial misconduct in cases where all other options to recover money had come up short. It was first implemented following the Royal Commission into banking to support victims of financial misconduct.
However, the SMC warned that levying members of APRA-regulated super funds would unduly shift the costs to low-risk financial sectors.
“If those in highly-regulated and well-run parts of the system foot the bill for misconduct elsewhere, it will escalate risky behaviour creating moral hazard, weaken accountability, and make some consumers pay twice,” the SMC said in a statement.
“The Government is asking poorer Australians, already feeling squeezed by cost-of-living pressures, to help plug a hole in the [CSLR] due to financial misconduct from others in high-risk products.”
Previously, Assistant Treasurer and Minister for Financial Services, Daniel Mulino, said the government sought to reform the CSLR in the wake of the alleged Shield and First Guardian Master Funds failures, which left almost 12,000 investors out of pocket.
For the financial year of 2025–26, a special levy of $47.3 million would apply to fund the CSLR following the failures. Mulino said this would be applied broadly to reduce the burden on any one subsector and to ensure the sustainability of individual subsectors and the CSLR as a whole.
However, the SMC said the application of the CSLR to APRA-regulated super funds would result in poorer Australians paying the levy while wealthier Australians with self-managed super funds (SMSFs) were not levied, despite 80 per cent of existing CSLR claims relating to advice in that sector.
The SMC urged the government to rethink the levy on APRA-regulated super funds, and called for stronger consumer protections.
These included tougher laws to stop sales tactics pressuring people into risky investments, stronger platform accountability and regulatory oversight into related party conflicts, and a system ensuring that those who caused harm paid to fix it.
“Despite a record super tax windfall, the Government is making poorer Australians pay for financial misconduct in riskier financial schemes,” SMC acting CEO Georgia Brumby said.
“We need to see genuine reform, not just unfair levies, to ensure the scheme is sustainable."
Emma Partis
Emma Partis is a journalist at Accountants Daily and Accounting Times, the leading sources of news, insight, and educational content for professionals in the accounting sector. Previously, Emma worked as a News Intern with Bloomberg News' economics and government team in Sydney. She studied econometrics and psychology at UNSW.
