Small business sees Single Touch Payroll as a Trojan horse towards more frequent payment of Superannuation Guarantee, the ATO Commissioner has told a Senate Committee.
“Single Touch Payroll is based on a reporting function, not a payment function,” said ATO Commissioner Chris Jordan, in an appearance before the Senate Economics Legislation Committee.
“The payment of pay-as-you-go withholding and superannuation is at the end of each quarter. Small business is quite sensitive on this issue,” he said.
Asked if small businesses used superannuation as a cash flow tool the Commissioner said: “Some are concerned that their cash flow would be severely impacted.”
When a Senator interrupted to say “But it is not their money,” Mr Jordan answered “You are preaching to the converted here.”
“You see, it is a sensitive issue. It has spooked small business a little bit, Single Touch Payroll. They are concerned that it is a Trojan horse—that, once it comes in, payment will be required as well as recorded.”
However the ATO Commissioner said he had not made a recommendation to Government for more frequent payment of superannuation.
“I am very careful with what I say. I think adopting Single Touch Payroll will be a marvellous thing for the economy and for us to be able to better data match with Centrelink. Get that up and running and not have a fight with small business around the payment side of it. Let us get the system up and let us see how all that works on the reporting side, and what we can do better, knowing the amounts, regardless of whether we have got the…” said Mr Jordan, before being interrupted.
Following the comments by the Commissioner, Industry Super Australia public affairs director Matthew Linden said: “The solution to unpaid super is clear to all of us, including the Tax Commissioner; what’s missing is political will.”
“The onus is on Government to introduce legislation to ensure Super Guarantee payments are made more frequently, and insist that the ATO collect ordinary time earnings to help with compliance,” he said.