Although the Government agreed to increase the FMA’s budget to $60.805 million in the coming years, a Cabinet paper that was recently released showed that market participants will be covering the majority of the funding through an increase to the levy on financial service providers.
“A Cabinet paper released by the ministry last week shows that participants are picking up the tab as the regulator’s budget increases significantly over the coming years.
The paper said the FMA has faced an expansion of its regulatory remit and broader cost pressures in recent years.
In April, Cabinet agreed to increase the FMA’s appropriation over three years to $60.805 million by 2022/23.
Cabinet agreed that the majority of this increase – $23.501 million per annum by 2022/23 – would be funded via an increase in the existing levy on financial service providers.”
To minimise drastic increases to the FMA levy, increases will be introduced in phases over the next three years.
“The funding and levy increases are now being phased in over three years instead of two.
“This is to lessen the impact of increased levies on financial services businesses at a time when revenues may be lower because of the economic impact of Covid-19. This adjustment complements the other lines of support the Government has been providing businesses to cushion the impact of Covid-19,” the paper said.” Click here to read more
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