Greater super compliance measures needed
5 June 2015
The release of the Australian National Audit Office (ANAO) report into compliance with superannuation guarantee charge (SGC) has reinforced the need for greater policy action by Government’s to protect employee superannuation.
Cbus CEO, David Atkin has said the report found the Australian Tax Office (ATO) has approximately 9,000 cases on average each year where they pursued SGC payments on behalf of employees, with a further 2,000 cases where SGC payments had not been made but no action was taken because the employer was insolvent.
"This report confirms further action is needed to deal with this problem which is having an increasing impact on workers superannuation balances and on government revenues.
"The construction industry has been identified as one of the main sectors for SGC non compliance; consequently this is a serious issue for Cbus members.
"We recovered last year, separate to the work of the ATO, $110 million in unpaid superannuation from the construction sector alone.
"The effect of non-payment on workers retirement can be dramatic with Tria Investments estimating that an average 25 year old impacted by non-compliance for 5 years loses 14% of their retirement savings.
"Cbus welcomes the recommendations by the ANAO but calls on the Government to go further and investigate aligning payment of the superannuation guarantee with wages.
"The development of electronic payment systems and clearing houses make this far easier than when the original SGC legislation was introduced requiring quarterly payments.
"We are confident this will reduce the risk of employers failing to contribute and ensure red flags go up early on employers who don’t intend to meet their obligations.
"The ATO also needs greater resources to tackle the problem or other bodies such as the Fair Work Ombudsman should be given great scope to pursue arrears.
"If we want to protect Australians retirement incomes and reduce the burden of pensions on the Federal Government Budget then this is an area that should be a high priority for government action," Mr Atkin said.
See media coverage of this issue in The Age: Super is still not getting paid by some bosses, report finds