Superannuation industry associations have criticised Treasury for a lack of detail on costing the implementation of the federal government's SuperStream.
The estimated costs of $467.1 million for governmental agencies seemed excessive, they said.
Treasury released its consultation paper yesterday outlining financial industry levies, including SuperStream, and opened the legislation for consultation.
The Financial Services Council (FSC), Association of Superannuation Funds of Australia (ASFA), Australian Institute of Superannuation Trustees (AIST) and Industry Super Network (ISN) have called for amendments to the proposed legislation that will require the Australian Taxation Office (ATO) to give a detailed cost analysis.
"Our issue is not whether cost recovery should occur, it is on expenditure of levied monies and the manner in which they are raised from the industry," FSC senior policy manager Andrew Bragg said in an address to the Parliamentary Joint Committee Inquiry into Superannuation Legislation Amendment (Stronger Super) Bill 2012 yesterday.
The FSC estimates its members, which make up about one-third of the super industry, will have to pay another $250 million on top of the $467.1 million for implementing the new system in their own organisations.
"We believe this to be a conservative figure, it does not include costs related to member communications and product administration and is based on a survey of efficient superannuation entities with high technological capability," Bragg said.
The ATO and the super industry should also continue to look for areas where the expenditure and development that had already been planned or put in place by the industry reduced the need for expenditure by the tax office, the associations said.
In an attachment to the consultation paper, Treasury gave a breakdown of the SuperStream costs, specifying costs for on-boarding, account consolidation, program management and communications.
But the industry associations pointed out the four line items in the table did not give any indication as to how the costs had been calculated.
"We don't think this amount is needed to implement SuperStream," ASFA chief executive Pauline Vamos said at the public hearing.
Vamos also said Treasury's estimated cost of $4 per member was incorrect.
"There are a lot of exemptions [to SuperStream] both in terms of exempted accounts, government accounts and self-managed fund accounts as well," she said.
"If something is going to be paid for by the industry, for the long-term efficiency of the industry, then it should be an industry-wide application."
ISN chief economist Sascha Vidler said: "We welcome the leadership that has been provided by the ATO and Treasury. There seems to be a strong degree of momentum behind the changes and that is positive."
But Vidler also criticised the size of the levy.
"At $121 million for the next financial year it is equivalent to the budget of APRA (Australian Prudential Regulation Authority) and double of what was raised to fund the investors in the Trio super fund in APRA-regulated funds," he said.
"It is enough money for the ATO to hire a small army of programmers."
AIST project director David Haynes added that the ATO had already spent a significant amount of money on SuperStream, but it was unclear what the money was spent on.
"I was surprised to see that the ATO has already spent $31.4 million on SuperStream," Haynes said.
Parties have until 15 June to make submissions on the proposed levies.
Treasury also announced the establishment of a SuperStream advisory council, which would advise the government on "issues relevant to the successful implementation and maintenance of the reforms".
The industry associations welcomed the establishment of the advisory council, but said the recruitment of members would have to comply with a transparent and robust process.
They would also like to see regular reporting to the SuperStream Advisory Council on expenditure and progress against budgeted plans.
