The Association of Superannuation Funds of Australia has called for the superannuation guarantee to be extended to self-employed workers in response to the rise of the gig economy.
ASFA estimates that there are currently around 100,000 workers in Australia who use web-based platforms to obtain work on a regular basis which comprises around 0.8 per cent of the Australian workforce.
In a discussion paper released today, ASFA said while the gig economy will typically provide individuals with greater flexibility, workers will have lower security of employment and income, and may not be covered by standard conditions.
“The increased prevalence of gig economy workers, in particular independent contractors, suggests a lower proportion of jobs for which workers will receive SG contributions. This will mean lower or no contributions for affected workers, and lower superannuation balances at retirement,” the discussion paper said.
ASFA chief executive Dr Martin Fahy said this would reduce the broader adequacy of the superannuation and retirement income system.
A particular concern with respect to the gig economy, he said, is where workers who, although engaged under a contract, have work arrangements resembling those of an employee.
“These so-called ‘dependent contractors’ do not receive the benefits employees receive,” Dr Fahy.
“In Australia, some platforms with workers who inhabit this legal ‘grey area’ are showing strong growth in worker numbers.”
ASFA has called for the compulsory superannuation regime to formally include the self-employed to address the issue.
“Although tax concessions have led to some self-employed saving for retirement through superannuation, average balances and coverage have remained relatively low,” the discussion paper said.
“Almost one-quarter of self-employed people have no superannuation, with no superannuation being more common for females than males.”
In addition, ASFA said a considerable proportion of self-employed people do not own a business with any material goodwill or value, other than their labour.
“The self-employed should be subject to compulsory superannuation. While this may pose some design challenges with respect to the concept of ‘income’ against which superannuation is to be applied, and the entity or individual that is responsible for making the superannuation contributions, this should not preclude work being done to progress this important policy issue.”
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