THE Joint Standing Committee on Treaties has tabled a report recommending the ratification of the two treaty actions related to the Universal Postal Union.

First, Acts of the Universal Postal Union adopted by the 2nd Extraordinary Congress: Tenth Additional Protocol to the Constitution of the Universal Postal Union and Second Additional Protocol to the General Regulations of Universal Postal Union.

Second, Acts of the Universal Postal Union adopted by the 27th Universal Postal Congress: Eleventh Additional Protocol to the Constitution of the Universal Postal Union, Third Additional Protocol to the General Regulations of the Universal Postal Union, the Universal Postal Convention, the Final Protocol to the Universal Postal Convention, the Postal Payment Services Agreement and the Final Protocol to the Postal Payment Services Agreement.

The Universal Postal Union (UPU) aims to promote accessible and efficient universal postal services of value that ensure communication around the world. Participation in the UPU enables Australia to promote and safeguard its interests in the UPU and continue to work to improve the international postal system for the benefit of Australian consumers, businesses, and designated postal operator, Australia Post.

These treaty actions aim to create a more efficient UPU by addressing internal governance arrangements and representation issues. Changes to internal arrangements include clarity around decision-making and the responsibility of adopting procedures, while establishing a system for the electronic submission of procedural documents.

Representation changes will be made by introducing gender equality principles and addressing membership inequalities for Small Island Developing States and Least Developed Countries, such as Australia’s Pacific Island neighbours.

Committee Chair Mr Josh Wilson MP said, "The exchange of international mail between member states is important for commerce and development. These changes create a more efficient and less ambiguous UPU, which aligns with Australia’s trade, national security, biosecurity, and border protection interests.”

“The establishment of permanent Pacific Island seats on the UPU Councils highlights the importance of supporting and promoting Pacific Island interests and aligns with Australia’s engagement with the region.”

The committee supports ratification and recommends that binding treaty action be taken.

The report can be found on the committee website, along with further information on the inquiry.

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THE Joint Standing Committee on Treaties will hold a public hearing today for its inquiry into the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) (Second Protocol).

The Second Protocol updates the original treaty and First Protocol with a range of new provisions including additional commercial opportunities for Australian businesses, particularly in the services sector, and the digital economy and green economy.

The 10 countries comprising the Association of Southeast Asian Nations (ASEAN) aim to work together to accelerate economic growth, social progress, and cultural development, promote peace and security, promote collaboration and mutual assistance, and encourage growth in the agriculture, industry, and trade sectors.

In 2022, ASEAN was Australia’s second largest trading partner with the relationship accounting for $178 billion in two-way trade. ASEAN Member States represent six out of Australia’s top 15 export markets.

The Second Protocol further includes a chapter on trade and sustainable development for the first time in an ASEAN-centred free trade agreement. This will enhance cooperation on labour standards, environmental protection and women’s economic empowerment, which are key objectives of the Australian Government.

Committee Chair, Josh Wilson MP said, “The Second Protocol to the AANZFTA is designed to deepen the beneficial trading relationships between Australia, New Zealand and ASEAN.

"By upgrading the AANZFTA, Australians and our New Zealand and ASEAN partners would see liberalised trade provisions on services and investments, new digital trade data rules, and steps towards enhanced cooperation on the environment, labour rights, and women’s economic empowerment.”

As part of the public hearing, the committee will hear from officials from the Department of Foreign Affairs and Trade, the Attorney-General’s Department and Australian Border Force.

Public hearing details 

Date:              Monday 18 March 2024
Time:              11am
Location:       Committee Room 2R1

The hearing can be accessed online and the program for this hearing is available on the Committee website, along with further information about the inquiry.

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THE Compensation Scheme of Last Resort (CSLR) has determined the estimates for the 1st and 2nd levy periods that will fund claims from eligible consumers who have been the victims of financial misconduct.

As outlined in the legislation for the CSLR, the 1st levy period will be funded by the Australian Government and the 2nd levy period by the sub-sectors of the financial services industry that are covered by the CSLR.

This is in addition to the already announced pre-CSLR complaint estimate for the levy that will be paid by the 10 largest banking and insurance groups in the establishment phase of the CSLR.

It is the responsibility of the CSLR to determine estimates that it reasonably believes to be the cost of the compensation scheme in each year. The Australian Securities and Investments Commission (ASIC) will issue the levy for each financial firm and collect the levy payments.

1st Levy Period Estimate

CSLR has provided a 1st levy period estimate of $4.8 million, which falls within the scheme’s annual levy cap of $250 million. As outlined in the legislation, the 1st levy period estimate will be funded by the Australian Government. (See the notifiable instrument.)

This estimate is expected to meet eligible compensation claims and costs from the CSLR’s commencement on 2 April 2024 to 30 June 2024.

While financial firms will not contribute to the 1st levy period,  CSLR notes that the estimate falls within the legislated annual levy cap of $20 million for each subsector, with the estimate for each sub-sector being:

• Financial advice $2.4 million
• Credit provision $0.7 million
• Credit intermediation $0.8 million
• Securities dealing $0.9 million
  
  

2nd Levy Period Estimate

In addition, CSLR has provided a 2nd levy period estimate of $24.1 million, which also falls within the scheme’s annual levy cap of $250 million and within $20 million subsector cap. 

This estimate is expected to meet eligible compensation claims and costs from 1 July 2024 to 30 June 2025. The estimate for each sub-sector is:

• Financial advice $18.5 million
• Credit provision $1.5 million
• Credit intermediation $1.8 million
• Securities dealing $2.3 million.

A summary to assist entities in calculating the leviable amounts per entity can be viewed on the ASIC website.

The 2nd levy period estimate is subject to a 'disallowance' period, with the Federal Parliament having the opportunity to object to the estimate within 15 parliamentary sitting days of the legislative instrument being published on the Federal Register of Legislation.

Once 15 parliamentary sitting days has elapsed, ASIC will issue the levy for each of the financial firms and collect the levy on behalf of the Federal Government.

The estimates for the 1st and 2nd levy periods are based on actuarial principles, as required by legislation.  The CSLR engaged the services of a leading actuarial consultancy, Finity Consulting, to establish a policy for determining the estimates and to conduct detailed modelling and analysis for each estimate. This work was reviewed by a second, independent actuarial consultancy, Taylor Fry. A full copy of the report from Finity is available on the CSLR website.

“These latest estimates are another milestone towards the CSLR being able to meet compensation claims from the victims of financial misconduct,” the CSLR Board said.

“We are committed to a robust and rigorous process that allows us to make the best estimates based on the best information available.”

Background

These latest estimates follow the CSLR announcement in January providing $241 million as the initial funding estimate for the levy that will be paid by the by the 10 largest banking and insurance groups in the establishment phase of the CSLR. The initial levy estimate includes provision for the majority of claims involving Dixon Advisory and Superannuation Services (DASS)

The legislative framework for the CSLR passed the Australian Parliament in June 2023 and the scheme is scheduled to start receiving claims from 2 April 2024.

The main establishment legislation and associated Levy Act 2023, Levy Regulations 2023 and Levy (Collection) Act 2023 set out the levy process for the establishment of the CSLR and for subsequent years.

The funding will pay for compensation claims of up to $150,000 to eligible consumers who have been the victims of financial misconduct relating to personal financial advice, securities dealing for retail clients, the provision of credit or the arranging of credit.

Read more about the CSLR here.

About the CSLR

The Compensation Scheme of Last Resort (CSLR), which is scheduled to begin operations on 2 April 2024, is a scheme designed to make payments to eligible consumers where determinations by the Australian Financial Complaints Authority (AFCA) for compensation remain unpaid in the financial sub-sectors specified in legislation. The CSLR will facilitate the payment of up to $150,000 in compensation to consumers who meet the eligibility criteria.

For more information visit www.cslr.org.au.

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The House Standing Committee on Economics has announced new public hearings as part of its inquiry into insurers’ responses to 2022 major floods claims.

In March, the committee will wrap up hearing from insurers and reinsurers. It will also hear from key departments and agencies, including Treasury, the National Emergency Management Agency and the Australian Competition and Consumer Commission.

The committee is also announcing today its high-level schedule for planned hearings in April and May at some of the regions worst affected by the 2022 major floods, including Brisbane, Lismore, Sydney, the Hawkesbury, Eugowra, Molong, Melbourne, Rochester and Heathcote.

Committee Chair Daniel Mulino MP said, "We are entering the critical second phase of this inquiry, where we want to hear firsthand about the floods’ impact on communities, and the experiences of local residents and businesses going through the claims process with their insurers.

"One of our priorities for these hearings will be organising roundtables and community statements, where we want to hear directly from people on the ground about their experiences with the insurance industry after the floods.

"A number of these affected towns have been hit again by floods since 2022, and the committee will be looking to see if insurers’ handling of claims has improved."

Further details about the regional hearings and attendance options will be released closer to the date.

Dr Mulino said there is also time for people and organisations to make a public or confidential submission, through this online link. Impacted individuals are encouraged to submit before 31 July 2024.

More than 400 people have already provided feedback about their experience with their insurer through an online survey, which will also remain open until 31 July 2024. The committee encourages affected individuals to complete the survey.

March 2024

Public Hearing – Swiss Re, Treasury, the National Emergency Management Agency, Lloyds

Date: 15 March 2024
Time: 11am to 6.30pm
Location: Videoconference

Public Hearing – John Trowbridge, ACCC, Auto & General

Date: 22 March 2024
Time: 9.30am to 2.45pm
Location: Videoconference

Programs for the hearings will be made available on the inquiry website. A live video stream will also be available on the APH website.

April–May 2024

Public Hearings and Site Visits – Local Councils, Community Groups, Residents & Businesses

Dates: (TBC) April 2024
Locations: Brisbane, Lismore

Public Hearings and Site Visits – Local Councils, Community Groups, Residents & Businesses

Dates: (TBC) April 2024
Locations: Metro Melbourne, Rochester, Heathcote

Public Hearings and Site Visits – Local Councils, Community Groups, Residents & Businesses

Dates: (TBC) May 2024
Locations: Molong, Eugowra, the Hawkesbury, Parramatta

Further details to be confirmed. These indicated dates and locations may be subject to change.

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