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‘Inadequate’ new SG proposals cop union backlash

‘Inadequate’ new SG proposals cop union backlash

Lucy Dean
04 June 2018 — 2 minute read

The government’s proposals to address the underpayment of superannuation entitlements, including increased penalties against employers, won’t do enough to stop unscrupulous employers, according to the Australian Council of Trade Unions.

The ACTU’s workers’ capital organising officer, Joseph Mitchell, told the economics legislation committee on Friday that the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 doesn’t go far enough in preventing the underpayment of superannuation.

Quoting Industry Super Association (ISA) figures estimating that 2.98 million workers were short-changed in 2015-16, Mr Mitchell said that the bill will be ineffectual in the face of “unscrupulous employers”.

This will be especially so in cases of underpayment of wages, cash in hand payments or rorting of the system, the officer added.

The committee was hearing from parties on the draft legislation, which proposes strengthened penalties against employers, extended use of single touch payroll for small businesses and boosted the powers for the Commissioner of Taxation to compel employers to cough up the unpaid super.

It also called for more regular reporting from superannuation funds.

According to the ACTU, however, these proposals won’t go far enough.

“The penalties proposed in the bill sound exciting and tougher penalties for rogue employers are warranted, but that is if the employers are caught and only if they fail to pay after they’re caught and then only at the discretion of the commissioner,” Mr Mitchell said.

“It’s ridiculous to think that many employers may face harsher penalties as a result of this law, especially given the amnesty that has been given to employers who have ripped off their staff for more than 26 years.”

In its submission, the ACTU said that underpayment is rife because super payments aren’t obvious to workers who also are unable to check their employers’ records of payment.

It also questioned the intelligence of granting the commissioner extended powers without the requisite resources needed to wield them.

“After years of cuts to the resources of the ATO and the Fair Work Ombudsman, there is little to no ability for proactive action to be taken. Similarly, the ATO has thus far been unable to identify the size of the SG gap, and its current approach is reactive to cases of superannuation guarantee non-payment,” the ACTU said.

Mr Mitchell said that increasing the workload without a reciprocal increase in frontline staff means this bill is “little more than a piece of paper”.

ISA echoed Mr Mitchell, adding that workers denied superannuation will also be workers relying upon the age pension in the future.

“This is an issue for people denied their retirement savings; it’s an issue for government through increased pension costs; and it’s an issue for businesses put at a competitive disadvantage,” ISA public affairs director Matt Linden told the committee.

“It has taken policymakers far too long to get on top of it,” Mr Linden said.

According to ISA analysis of ATO data, the total amount of employer contributions underpaid rose from $5.6 billion in 2013-14 to $5.9 billion in 2015-16, with the proportion of underpaid workers rising from 32 per cent to 33.4 per cent.

‘Inadequate’ new SG proposals cop union backlash
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