This bill became law on Jul 3rd, 2023.
Budget, tax & economy
Financial firms will fund a last-resort compensation program that pays consumers when an Australian Financial Complaints AuthorityThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. decision is left unpaid for a covered financial product or service.
Unpaid Australian Financial Complaints AuthorityThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. decisions left some consumers without compensation for covered financial products and services. This bill lets the last-resort scheme raise and collect levies from financial firms, gather needed information, and charge penalties for late payment so those claims can be paid.
After the banking royal commissionThe major inquiry into misconduct in banking, superannuation and financial services that led to the last-resort compensation reform. reform agenda produced a plan for an industry-funded Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision., the government moved to fix a gap that left some consumers with unpaid Australian Financial Complaints AuthorityThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. determinations even after winning their cases. This bill supplied the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs.-collection machinery for that scheme so firms could be charged to fund payouts and administration, and by late 2025 the scheme was under new strain as claims linked to the Shield and First Guardian collapses drove sharp levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. increases.
The strongest criticism is that the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. scheme can grow into a large cross-industry bill, forcing firms and even super funds that were not involved in a failure to help pay compensation and raising doubts about long-term sustainability. That concern was not a major parliamentary objection when the bill passed, but later industry reporting and scheme estimates pointed to rising levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. costs and a widening funding gap while no party represented in the debate opposed the bill.
Stephen Jones MP introduced this bill. It passed on the voices.
Did it become law?
Yes
Became law 03 July 2023
Final passage
Passed without a counted vote
Members called out ‘aye’ or ‘no’ — no individual votes were recorded.
Passage speed
117 days
From introduction to the latest recorded parliamentary step
Meaning
Financial firms will fund a last-resort compensation program that pays consumers when an Australian Financial Complaints AuthorityThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. decision is left unpaid for a covered financial product or service.
ASICThe corporate and financial regulator that can require firms to provide information so the levy can be calculated and collected. can require businesses that may have to pay the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. to give information before a levy periodThe time period for which a firm's levy bill is worked out and collected. so their bill can be worked out.
The Financial Services Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision. operator can set how much money each industry sub-sectorA smaller slice of the financial industry used to split the levy bill between different types of firms. needs to raise, including expected compensation, complaint-handling fees and ASICThe corporate and financial regulator that can require firms to provide information so the levy can be calculated and collected. administrative costs.
The first levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. for older unpaid complaint claims is a one-off charge that must be paid in two instalments.
Businesses that do not pay their levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. on time will owe an extra late-payment penalty.
The CSLR is intended to support confidence in the financial system’s external dispute resolution framework. The scheme provides for compensation to be paid to a consumer where a determination issued by AFCA remains unpaid and the determination relates to a financial product or service within the scope of the scheme. The Commonwealth will fund the establishment of the scheme and part of its initial operation. A levy will be imposed on parts of the financial services industry to fund the scheme’s ongoing operation.Financial Services Compensation Scheme of Last Resort Levy (Collection) explanatory memorandum
Persons on whom levy is to be imposed may be notified that they must provide information to ASIC for a levy period.Financial Services Compensation Scheme of Last Resort Levy (Collection) as-passed bill text
In advance of the issuing of a levy, the CSLR operator will determine the amount to be raised through the levy. The CSLR operator's determination will include, as relevant, estimated compensation claims and AFCA fee costs and associated administrative costs. The CSLR operator's determinations will be disallowable.Minister's second reading speech
A one-off levy to fund the back log of Australian Financial Complaints Authority (AFCA) complaints that are expected to be eligible to claim on the CSLR will be issued by December 2023. This levy will be payable in two instalments.Minister's second reading speech
Late payment penalty will be payable if levy remains unpaid after it becomes due for payment.Financial Services Compensation Scheme of Last Resort Levy (Collection) as-passed bill text
Context
After the banking royal commissionThe major inquiry into misconduct in banking, superannuation and financial services that led to the last-resort compensation reform. reform agenda produced a plan for an industry-funded Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision., the government moved to fix a gap that left some consumers with unpaid Australian Financial Complaints AuthorityThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. determinations even after winning their cases. This bill supplied the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs.-collection machinery for that scheme so firms could be charged to fund payouts and administration, and by late 2025 the scheme was under new strain as claims linked to the Shield and First Guardian collapses drove sharp levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. increases.
Government unveils an industry-funded Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision.
The Morrison government announced a compensation scheme of last resortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision. as part of banking royal commissionThe major inquiry into misconduct in banking, superannuation and financial services that led to the last-resort compensation reform. reforms to cover consumers left unpaid after financial misconduct cases.
Australian Financial Review ↗Government introduces the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. collection bill for unpaid AFCAThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. determinations
The Assistant Treasurer told Parliament this bill formed part of the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. framework for the Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision. for consumers with unpaid Australian Financial Complaints AuthorityThe external dispute body that decides some financial complaints and whose unpaid decisions can trigger compensation under this scheme. determinations.
Hansard ↗Parliament passes the bill
Both houses passed the bill, clearing the way for the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. system that would raise money from financial firms for scheme payouts and related costs.
Parliamentary timeline ↗Royal AssentThe final approval that turns a bill passed by Parliament into an Act of Parliament. creates the Act
Royal AssentThe final approval that turns a bill passed by Parliament into an Act of Parliament. made the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. collection framework law so the Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision. could operate with a formal funding mechanism.
Parliamentary timeline ↗Shield and First Guardian collapses push up scheme costs
The Australian Financial Review reported that claims tied to the Shield and First Guardian failures had helped lift the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. from $4.8 million in 2024 to $75.7 million in 2026 and raised doubts about the scheme's sustainability.
Australian Financial Review ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
Second reading debate
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step.
Reported from Federation Chamber
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal AssentThe final approval that turns a bill passed by Parliament into an Act of Parliament., turning the bill into an Act.
Key criticism
The strongest criticism is that the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. scheme can grow into a large cross-industry bill, forcing firms and even super funds that were not involved in a failure to help pay compensation and raising doubts about long-term sustainability. That concern was not a major parliamentary objection when the bill passed, but later industry reporting and scheme estimates pointed to rising levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. costs and a widening funding gap while no party represented in the debate opposed the bill.
Criticism focused more on cost blowouts and scheme design risk than on rejecting compensation for consumers.
Unfair cross-subsidy across the industry
A central objection is that the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. can make businesses pay for misconduct or collapses they had no role in, turning the scheme into a broad cross-subsidy rather than a targeted user-pays system.
Risk of levy blowouts and weak sustainability
Critics warned the scheme's costs were rising quickly, with levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. estimates jumping sharply and potential claims threatening the scheme's long-term viability unless it was redesigned or broadened to find more funding.
Costs may be pushed onto consumers who may never benefit
Another criticism is that expanding the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. to super funds or SMSFs could spread costs to millions of Australians who are unlikely ever to use the scheme, making the funding model look poorly matched to who caused the losses and who is protected.
Votes
The bill passed both chambers on the voices, so there is no list of individual Aye and No votes for final passage.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Amendments grouped by chamber. These cards include amendment outcomes recorded without a counted division.
Senate
The Senate Journal records this outcome as defeated on voices.
Defeated on voices
The chamber decided this amendment without a counted division, so there is no list of individual Aye and No votes.
Parliamentary debate
Start here — lead voices
Jones supports the bill as part of the framework needed to establish and fund the Compensation Scheme of Last ResortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision..
Read in Hansard ↗Taylor says the opposition will not block the bill and lets it proceed, because it completes part of the royal commission reforms.
Read in Hansard ↗Ayres supports the bill as part of the levyThe compulsory charge on parts of the financial industry that funds compensation payments and scheme running costs. framework that will fund the compensation scheme of last resortThe backstop scheme that pays eligible consumers when a financial firm does not pay an AFCA compensation decision., saying it is needed so ASICThe corporate and financial regulator that can require firms to provide information so the levy can be calculated and collected. can collect the levies and the scheme can operate on time.
Read in Hansard ↗All speeches by bloc
2 speakers · 2 support
“This Bill is the second of two Bills which form the levy framework for the financial services compensation scheme of last resort (CSLR).”Read the full speech in Hansard ↗
“This bill is the second of two bills which form the levy framework for the financial services Compensation Scheme of Last Resort (CSLR).”Read the full speech in Hansard ↗
1 speaker · 1 support
“Whilst we won't deny this bill a second reading—it has taken way too long for the bill to get to this point anyway—we do call on the House to recognise the government's mismanagement of the bill, the government's dishonesty with the Australian people, particularly with respect to tax, and the need for the government to commit to reducing inflation and pressure on the cost of living by controlling its own spending, not by taxing Australians more.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal AssentThe final approval that turns a bill passed by Parliament into an Act of Parliament., turning the bill into an Act.
