Will the Super Guarantee amnesty be the next Government policy dropped?

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Opinion/analysis – Does the Coalition really want to head into an election after giving an amnesty to employers who haven’t paid superannuation owing to their workers?

An election is likely within the next nine months, and the Government is dropping policies that are unpopular or can’t get through the Parliament – or both – in preparation.

The proposed increase to the age pension age from 67 to 70 was dropped on breakfast TV. The changes to super fund governance – requiring more independent directors, which would particularly impact industry super funds – was hard enough to pass before the Banking Royal Commission, and is reportedly shelved. Though it can be hard to tell given the lack of priority given to superannuation Bills.

Is an amnesty for employers who haven’t paid what they owe really something the Coalition wants to take to an election? This would seem to easily fit into a Labor campaign.

The Government has two Bills before the Parliament – one imposes fines or jail, or both, for employers that don’t pay Super Guarantee, the other creates the amnesty for historical SG non-compliance. How can these two positions be reconciled? If they had to be passed to together, by including both measures in the same Bill, it could be said to be a carrot-and-stick. But as separate Bills?

The proposal is already creating issues for employers. If legislated, the 12 month amnesty would start the day the Bill was introduced to the House of Reps, which is also the first time it was publicly announced – 24 May 2018. So the amnesty period to come forward is almost a third gone, but who would want to come forward and rely on an amnesty that hasn’t, and might not, eventuate?

Treasury told a Parliamentary Committee that $230 million of superannuation was expected to be paid under the amnesty – money which is already owing and which the ATO should be chasing.

“The amnesty raises only a small amount of money relatively speaking for a large compromise in policy position,” said Labor. Labor also said the Bill was introduced with “haste and secrecy” and plans to try to amend the Bill to remove the SG amnesty.

The measure also brings in $101 million for the Federal Budget over the forward estimates. This likely includes the interest that will be charged on payments of SG under the amnesty – other penalties are not charged under the amnesty.

Quietly shelving the Bill and hoping Labor doesn’t use it in an election campaign seems like a poor strategy. So will it be the next policy publicly dropped by the Government?

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