Peter Costello

Media Releases

Strengthening Prudential Regulation

NO.034

STRENGTHENING PRUDENTIAL REGULATION

Funding for the Australian Prudential Regulation Authority (APRA) is to be increased by $21.9 million over four years in measures announced in the 2003-04 Budget. APRA's costs are fully recovered through levies applied to those institutions it regulates.

The increase will enable APRA to employ additional technical experts, to attract and retain appropriately skilled front-line supervisory staff and to enhance its supervisory and information technology capabilities.

APRA's engagement of additional technical experts is intended to deepen and broaden its skill base. The Royal Commission into the failure of HIH Insurance suggested that developing the skills of APRA's front-line supervisory staff should be a priority, and in this regard the funding of additional technical experts should play a key role.

The Government remains committed to ensuring that APRA has adequate resources and the skills and expertise necessary to perform its functions. The report of the HIH Royal Commission made a number of recommendations concerning APRA's regulatory powers, internal processes and regulatory approach. These recommendations are currently being considered by the Government and APRA.

The increase for 2003-04 announced in tonight's Budget is generally in line with the average annual growth in APRA's resources since its establishment.

Contact: David Alexander
Office of the Treasurer
(02) 6277 7340

13 May 2003

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