Assistant Treasurer and Minister for Financial Services & Superannuation
14 September 2010 - 14 December 2011
Government and Inspector-General Of Taxation See
Eye-to-Eye on Providing Strongest Ever Protection
for Workers' Super
The Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon. Bill Shorten MP, today released the Inspector-General of Taxation's Review into the ATO administration of the Superannuation Guarantee Charge (the Review).
The full response to the Inspector-General's recommendations will provide the strongest protection of employee superannuation entitlements ever seen for Australian workers.
The Review examined the ATO's administration of the Superannuation Guarantee (SG) charge, including the level of non-payment of workers' superannuation entitlements, the ATO's non-compliance detection mechanisms and how the ATO manage non-compliance cases after they are detected.
The Review found that the SG system works well for the majority of Australians. However, those most at risk of not receiving their superannuation entitlements are employees who are least empowered, being predominately low paid, casual and young workers.
In his report the Inspector-General makes 12 recommendations in respect of the superannuation guarantee system. Of the seven recommendations and three part recommendations directed to the ATO they have agreed with nine and disagreed with one. The remaining recommendations were directed to Government.
The Assistant Treasurer said "Significantly for working Australians, the Gillard Government has already adopted the majority of the relevant policy recommendations to protect workers' superannuation entitlements."
"On 25 July 2010 the Gillard Government committed to taking strong action to ensure all employees receive their entitlements, including superannuation. The Government's Protecting Workers' Entitlements package includes measures to ensure superannuation entitlements are paid in a timely manner, and that employees and employers are given more information about their superannuation payments."
"This stands in direct contrast to the Coalition, who will rip workers' entitlements away. Australian employees work hard and deserve to know their wages, superannuation and other entitlements are safe."
Through the superannuation measures contained in the Protecting Workers' Entitlements reforms, employees will receive:
- Information on their payslips about the amount of superannuation actually paid to their account (Recommendation 2)
- Quarterly notification from their superannuation fund if regular payments cease (in line with Recommendation 3).
Providing employees with more timely information on their superannuation will also assist in reducing the timeframes between when a SG shortfall arises and when an employee lodges a complaint with the ATO.
The Government will shortly commence consultations with the superannuation industry, employer representatives and unions about the implementation of these measures.
The Government is also extending the director penalty regime to cover unpaid SG charge (part of Recommendation 11). The Inspector-General was of the view that if a company fails and owes superannuation to employees, then the directors of the company should be made strictly liable for the unpaid superannuation liabilities of the company. This will act as a strong deterrent against employers not paying superannuation and also discourage phoenix practices.
"It is not surprising to see the Gillard Government and the independent Inspector-General of Taxation on the same page about ensuring workers receive their superannuation entitlements.""Together with our commitment to move the superannuation guarantee from 9 per cent to 12 per cent super, our forthcoming response to the Cooper Review and our response to this review by the Inspector-General, the Gillard Government is putting in place a series of reforms to Australia's superannuation system that will significantly improve the retirement savings of millions of working Australians," the Assistant Treasurer said.
24 November 2010