The Australian Prudential Regulation Authority (APRA) will run at a $3.8 million loss in the next financial year, according to the Federal Budget papers.

This is despite an $8.7 million increase in its budget, with the bulk of the new funding coming from its role in implementing the Federal Government’s superannuation reforms.

The loss will be covered by accumulated surpluses from previous financial years.

APRA has set employee expenses at $84.1 million for the 2012 financial year. This covers a reduction in staff from 619 to 607.

The regulator says it will also reduce spending on technology, travel and Sydney leasing costs to meet the Federal Government’s cutback on public sector spending.

In the year ahead APRA says it will be concentrating on “enhancing prudential standards in line with the global reform initiatives endorsed by G20 and overseen by the Financial Stability Board”.

“APRA will be updating and harmonising capital standards in the general and life insurance industries,” it said in the Budget papers.