Big problem needs bigger response

14 July 2017

Action by the Government to close a legal loophole that leaves workers short changed on their superannuation is welcome but should only be the first step.

David Atkin, Chief Executive Officer of Cbus, the industry super fund for the construction and building industry urged the Government to push ahead and legislate to require superannuation to be paid at the same time as wages.

“Australian workers should not miss out on billions of dollars of unpaid super due to Government inaction,” Mr Atkin said.

“Unpaid super is unpaid wages. It’s unacceptable and it’s gone on too long.

“Closing a loophole that allows employers to shortchange employees who make extra salary sacrifice super contributions is welcome, but will only help one in ten affected by unpaid superannuation[1].

A joint Cbus and Industry Super Australia report released in December 2016 exposed the multi-billion worker rip off and was a catalyst for a Senate Inquiry that has brought greater focus to this important issue.

While Cbus is disappointed the Government has not responded to the comprehensive recommendations made by the Committee, it’s time to take meaningful action.

“The Government can get rid of the antiquated elements of the system and bring payment of super in line with wages and remove the threshold that exempts contributions for incomes below $450 per month, it must include small business in Single Touch Payroll to enable real time tracking of payments and more grunt in the ATO compliance regime.

“If the Government is serious about ensuring workers are paid what they are owed, they will follow through with a comprehensive response. We hope today’s announcement is just the first step.

“The impact of missing superannuation can be dramatic on individuals and the wider community with lost tax revenue and increased reliance on the age pension. We all lose from unpaid super.

“The building and construction industry has some of the highest rates of nonpayment of super and Cbus is proud of its strong record in helping to ensure workers’ get their entitlements.”

Industry Super Australia conservatively estimates the superannuation shortfall to be $5.6 billion that affects almost 3 million or 32 per cent of entitled workers at an average of $2,025 each in 2013/14.[2]

                                  

[1] Industry Super Australia media release: Action on unpaid super urgent - 'Crackdown' tip of the iceberg

[2] As above