PBS: APRA - Section 1: Overview, Appropriations and Budget Measures Summary

	Document Index Portfolio Budget Statements Australian Prudential Regulation Authority

Section 1: Overview, Appropriations and Budget Measures Summary

Overview
Appropriations
Administered Capital and Equity Injections and Loans

OVERVIEW

The role of the Australian Prudential Regulation Authority (APRA) is regulation that promotes prudent behaviour by banks, insurance companies, superannuation funds and other financial institutions with the key aim of protecting the interests of their depositors, policy holders and fund members.

Prudential regulation focuses on the quality of an institution's systems for identifying, measuring and managing the various risks in its business.

In carrying out this role, APRA will enhance public confidence in Australia's financial institutions through a framework of prudential regulation, which balances financial safety and efficiency, competition, contestability and competitive neutrality. This is achieved by:

the formulation and promulgation of prudential policy and practice to be observed by regulated institutions;
effective surveillance and compliance programs and, where relevant, remediation or enforcement measures, to give effect to the laws administered by APRA and to standards issued under those laws; and
advice to Government on the development of regulation and legislation affecting regulated institutions and the financial markets in which they operate.

APRA was established by the Australian Prudential Regulation Authority Act 1998. The Commonwealth Authorities and Companies Act 1997 applies to APRA.

APPROPRIATIONS

Total appropriations for APRA in the 1999-2000 Budget are $54.1 million (see Table 1.1.)

Australian Prudential Regulation Authority -- Appropriations 1999-2000
Table 1.1: Appropriations ($'000)

Outcomes	Administered Expenses				Price of Outputs					Total Appropriations ^(e)	Total Estimated Expenses
	Special Appropriations ^(a)	Annual Appropriations		Total Administered Appropriations	Total Price of Outputs^(c)	Revenue from Other Sources^(d)	Revenue from Government (Appropriations)
		Bill 1	Bill 2 (SPPs & NAOs)^(b)				Special	Annual Bill 1	Total
	(A)	(B)	(C)	(D=A+B+C)	(E)	(F)	(G)	(H=E-F-G)	(I=G+H)	(J=D+I)	(K=J+F)
Outcome 1 -- To enhance public confidence in Australia's financial institutions through a framework of prudential regulation which balances financial safety, efficiency, competition, contestability and competitive neutrality	-	-	-	-	55,128	1,008	52,620	1,500	54,120	54,120	56,538
Total	-	-	-	-	55,128	1,008	52,620	1,500	54,120	54,120	56,538
Bill 2 Administered Capital^(b)										-
Bill 2 Agency Equity Injections and Loans^(b)										-
Total appropriations										54,120

Estimated expenses from individual Special Appropriations are shown in Appendix 2.
Under the proposed Appropriation Structure, Bill 2 includes Specific Purpose Payments (SPPs), New Agency Outcomes (NAOs), Administered Capital and Agency Capital via Agency Injections and Loans.
Refer to Budget Statement of Revenue and Expenses for Application of Agency Revenue (see Table 3.1).
Other Revenue includes other revenue from Government (eg resources free of charge) and revenue from other sources (eg sales of goods and services).
Links from Appropriations to Budget Financial Statements include Budget Statement of Revenue and Expenses (see Table 3.1); and Capital Budget (see Tables 3.4 & 3.5).

Note: APRA will receive a loan of $4 million to cover the cost of integrating the Financial Institutions Scheme that currently provides supervision of credit unions, building societies and friendly societies at the State level. The loan will be repaid over 3 years. The loan is within the special appropriation as explained in Appendix 2. The loan amortisation is reflected in the costs within Table 1.1. The loan is recovered from levies before the residual is remitted to APRA from CRF.

Note: The agency has agreed with the ATO to continue to administer excluded superannuation funds for 1999-2000, although the responsibility for the supervision will be transferred on 1 July 1999. APRA requires an appropriation of $1.5 million to fund this administration.

ADMINISTERED CAPITAL AND EQUITY INJECTIONS AND LOANS

APRA has not been appropriated any administered capital for 1999-2000.