Labor members of a Senate committee have accused the Government of engaging in “haste and secrecy” around its Bill to create an amnesty for employers who haven’t paid their Super Guarantee obligations.
The majority of the Senate Economics Legislation Committee, which includes Liberal Senators and Greens Senator Whish-Wilson, recommended that the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 be passed. Only Labor Senators issued a dissenting report, calling for the SG amnesty provision be removed from the Bill.
Update: The Bill has passed the House of Reps, without amendment.
The Labor Senators “strongly dispute” the need for an SG amnesty, and accused the Government of only listening to business.
“The most ardent advocates for the amnesty were employers and it appears that the superannuation industry as well as employee representatives were left out of the policy development process,” say the Labor Senators in their dissenting report.
Labor is critical of the “haste and secrecy” with which the Bill was introduced, with only a little over three weeks for the inquiry.
“Such tactics further underscore the Government’s intention to limit public debate on the amnesty, hoping that the public would not pay attention to this issue.”
Labor also noted that the SG amnesty was not announced in the Budget, despite the decision already having been taken. The amnesty was included in the ‘decisions taken but not yet announced’ section of the Budget.
“Furthermore, there are no recent Parliamentary or Government reports into SG non-compliance that have actually recommended such a measure.”
Treasury told the Committee that the $230 million of superannuation is expected to be paid as a result of the amnesty, which Labor said was a “very small amount” compared to the annual Super Guarantee gap of $5.9 billion estimated by Industry Super Australia, or the $2.8 billion estimated by the ATO.
“The amnesty raises only a small amount of money relatively speaking for a large compromise in policy position,” said Labor.
Labor intends to try and amend the Bill to remove the amnesty, leaving changes to Non-arm’s length income, LBRAs and for employees with multiple employees.
The majority report says the committee heard evidence that the amnesty will leave no workers worse off and will result in the payment of superannuation that would otherwise go unpaid.
“The committee believes that changes to the way superannuation is collected and remitted to date have simplified and improved the system, with further proposed changes set to continue this trend.”
However the majority were also “concerned that the ramping up of penalties may create a big disincentive for employers to disclose relatively minor shortfalls, with the result that they fall further into arrears”.
“It suggests that it be made easier to correct shortfalls early, and more generally to come forward and rectify underpayments and nonpayment.”
The committee also heard that an “extensive communication strategy” is needed to ensure employers are aware of the amnesty.