By Vanessa Cavasinni, editor Australian Hotelier
A Senate committee has suggested superannuation reforms to counter employers who underpay super, and has criticised the Australian Tax Office (ATO) for its lack of vigilance in regards to the problem.
The Economics References Committee report, Superbad – Wage theft and non-compliance of unpaid Superannuation Guarantee, suggested that the ATO’s reactive approach to unpaid super as “inadequate” and “problematic”.
The committee made 32 recommendations, 15 directed at the ATO. The recommendations included a suggestion to move into the digital sphere to improve compliance, and suggested that the ATO relied too much on employee complaints to monitor underpayments.
The main recommendation, however, was the urging to compile public and accurate data on the extent of unpaid super – something that was not available during the enquiry. Instead the Senate committee relied on Industry Super Australia’s analysis of ATO data, which uncovered that 2.76 million Australian workers were underpaid their super by an average of $2,025 each in 2013-14.
Industry Super’s public affairs director, Matt Linden, welcomed the recommendations of the committee, and urged the Government to give them serious weight.
“The Senate committee and an interagency working group convened by the Minister have spent almost six months on this – Australians now expect to see action in next week’s budget.
“Unpaid super should no longer be a second or third order priority for the ATO – we need an urgent and concerted effort to detect non-compliance and enforce the law,” said Linden.
Other recommendations of the report include:
- Remove the $450 threshold on super guarantee (SG) eligibility
- Close the loophole that allows voluntary contributions to count towards an employer’s SG obligation
- Require SG to be paid monthly and align with regular pay cycles
- Review the definition of Ordinary Time Earnings for the purpose of SG calculations
- Extend unpaid SG liabilities to corporate entities
- Review ATO resourcing to ensure it is able to undertake effective compliance activities
- Extend Single Touch payroll to all businesses