Labor is concerned that the proposed Super Guarantee amnesty may let employers “wipe the slate clean” without having to pay all the superannuation they owe.
The Government is again trying to legislate an amnesty for employers who historically haven’t paid the Super Guarantee they owe for their employees.
Opinion is divided on the amnesty, with some saying it will collect super that is currently owing, while others say it will be ineffective and sends a bad message to employers.
The Government estimates that the amnesty will recover $230 million in superannuation. Estimates of the amount of Super Guarantee owed but not paid each year vary. The ATO puts the ‘Super Guarantee gap’ for 2016/17 at $2.298 billion, whereas Industry Super Australia puts the figure at $6 billion a year.
Labor is now concerned that it could let employers off without even paying all the superannuation they owe.
In a Senate Committee hearing on the SG amnesty Bill, Labor Senators frequently asked people giving evidence how the amnesty would work if employers didn’t have records stretching back the full 26 years the amnesty covers – since the start of the Super Guarantee.
Labor Senator Gallacher asked: “This amnesty may well cover a 26-year period, but if people turned up with five years worth of records and pay for the five years they’ve got records for, the slate is wiped clean. Is that it? Does anybody know that level of detail about this legislation?”
Scott Connolly, Assistant Secretary of the ACTU, said that was the Council’s understanding of what was proposed, adding “that’s your leave pass”.
Glen McCrea, Deputy CEO and Chief Policy Officer with the Association of Superannuation Funds of Australia, was also asked about recordkeeping.
“The ATO are going to have to form a view if someone comes back with no records for 26 years. They are obviously going to have to form a view on when that’s acceptable or not. I suppose we are looking at it merely from a principle point of view. We think that having an amnesty will hopefully encourage people to come forward who otherwise wouldn’t and do the right thing by their workers,” was the answer.
James O’Halloran, ATO Deputy Commissioner for Superannuation and Employer Obligations, told the Committee that there was “one instance where one person did come forward for, effectively, back to 1993”.
Senator McAllister said there was “ambiguity around the time frame to which the amnesty relates”, and asked if an employer came forward with only seven years of records what process would the ATO undertake?
“Perhaps I can’t cover the policy rationale. All I can say is that, if the amnesty law lands as currently drafted, it’s not an unusual situation. It’s obviously got some legislative elements in it. But our normal position, as always, is that we often receive voluntary disclosures from people who have applied their best endeavours,” O’Halloran answered.
“We look at it at different degrees, but certainly the message that the law seems to impose is that people are encouraged to come forward. They should come forward. It’s not to be a cavalier exercise. Therefore, it’s more likely than not that we would accept what they bring forward, because we may not have records back that far either in some instances. We will obviously provide information and advice as to the sorts of sources of information that should be available.”
The inquiry is due to give its report by Thursday, 7 November.
When an earlier version of the SG amnesty was subject to a Senate committee inquiry, Labor said it would oppose the amnesty.