The federal government will impose a $47.3 million special levy to cover a Compensation Scheme of Last Resort funding shortfall, despite opposition from insurers and other financial services sectors.

Financial Services Minister Daniel Mulino announced the measure as he prepared to host a meeting today with industry stakeholders and consumer advocates.

He says the levy, to be imposed this financial year, “will be applied broadly to reduce the burden on any one subsector and to ensure the sustainability of individual subsectors and the CSLR as whole.

“We are acting in partnership with industry and consumer advocates. That is why today I am hosting a roundtable on the CSLR, where we will discuss the special levy and some options on the table for post-implementation reform”.

Dr Mulino says the government is considering “targeted reforms to deal with the issues across the whole ecosystem and will consult on these early in 2026”.

General insurers have opposed a broad special levy. Other options were flagged in a Treasury consultation after the CSLR said it needed about $75.69 million for 2025-26 to pay eligible claims.

The CSLR has a levy cap of $20 million per subsector, but its legislation states a special levy can be imposed to cover excess claims costs.

The funding shortfall was caused mainly by the collapse of the Shield Master and First Guardian Master investment schemes.

Dr Mulino said: “Supporting consumers includes ensuring the CSLR is there to support them when they need it.”

But Finance Industry Council of Australia members – which include the Insurance Council of Australia – have raised concerns over the special levy.

“Ongoing ad-hoc levies to support a structurally flawed scheme send the wrong message and will simply add costs for all consumers,” the Finance Industry Council said.

“Certain design elements of the scheme have created excessive costs that are flowing through to all customers of financial services, and ... these costs are expected to grow.”

The Finance Industry Council backs the government’s move to consult on “changes to the CSLR to ensure its sustainability and deal with the causation of these terrible financial collapses and losses.

“Consulting on options in 2026 must be done quickly ahead of any discussions on managing the 2027 excess.”

The CSLR, which launched last year, aims to provide compensation for complainants who have not been paid following Australian Financial Complaints Authority determinations.