LEON BYNER:
Kelly O'Dwyer good morning.
KELLY O’DWYER:
Good morning Leon.
LEON BYNER:
Tell me about this plan to basically take from criminals’ superannuation as compensation for committing crime.
KELLY O’DWYER:
Well I found out last year that there was a very terrible case where there had been victims of very serious sexual assault who wanted to access compensation payments from the perpetrator. The perpetrator informed the family of those victims that he had put all of his assets in superannuation and that they could not touch it as a result of the existing laws. So what we're proposing to do is to say that where a perpetrator tries to shield their assets through superannuation by putting it in to superannuation in an out of character way, victims will still be able to gain access to that superannuation. We have also got a second proposal to say that irrespective of whether they have put the money in deliberately or not, victims of very serious crimes – where there could be the potential of a jail sentence of 10 years – should be able to access the perpetrator's superannuation account. Again, so they can get the compensation that they need to get on their feet.
LEON BYNER:
The other superannuation issue, there's a couple, first of all the business of the $2.6 billion of unnecessary fees. The question is if they are unnecessary why were they being charged and how are you going to fix that?
KELLY O’DWYER:
It's a great question Leon and unfortunately when Bill Shorten was the Minister for Financial Services he uncapped investment and administration fees and charges which means that people, particularly with low balance accounts – so accounts with under a thousand dollars and that's a very substantial number of Australians particularly given that they have multiple accounts – could be charged effective rates of around 9 per cent, which means that they can sometimes end up with nothing in their account when you take into effect their high administration fees and often high insurance premiums as well. What we're doing is we've said no, that's a rip off, we're going to cap the fees and charges that can be applied, we're are going to ban exit fees so that if somebody wants to move accounts or consolidate account. Many of these superannuation funds are actually charging a fee in order to do that. That was a barrier for many people in consolidating their accounts and again it just isn't right. In South Australia alone there are around 330,000 people who will benefit from these fee protections and that will mean $30 million returned back to them.
LEON BYNER:
What about those employees who, and there are many of them, find that they're not having super being paid into the account, they contact the tax office, they don't get a huge amount of interest from there. What are we going to do about this?
KELLY O’DWYER:
It is very serious. We know that most businesses do the right thing, 95 per cent of them do, but for the 5 per cent who don't it can have a substantial impact on those workers.
LEON BYNER:
So what are we going to do?
KELLY O’DWYER:
We are going to jail people for 12 months if in fact they don't pay the superannuation that they should. We have said to those businesses you've got to get your house in order. We are strengthening the powers of the Australian Taxation Office to be able to go after that unpaid super. We have said to businesses you have got 12 months now to come forward under an amnesty and pay every single dollar that you owe to those employees who you haven't paid including interest so that they are no worse off. The Government will forego the penalty that the business would have otherwise paid to the Government because we want to turbocharge people being paid the money that they are owed and that will help around 50,000 people get access to around $230 million of their own money.
LEON BYNER:
So if somebody is not getting paid super there is an amnesty period now where the employee can go to the employer or presumably – see the trouble is, employees are afraid to do this, you know that don't you?
KELLY O’DWYER:
The employee can always go to the Australian Taxation Office confidentially.
LEON BYNER:
Yeah but they do that now and not much happens.
KELLY O’DWYER:
Well actually you would be surprised...
LEON BYNER:
Well hang on I can only go on what listeners are telling me and I'm not giving good vibes yet.
KELLY O’DWYER:
Well I can tell you through the conversations that I've had with the Australian Taxation Office that they take these complaints seriously and we are strengthening their powers...
LEON BYNER:
When?
KELLY O’DWYER:
Right now. We've got legislation in the Parliament right now about jail terms, with single touch payroll, where employers will have to notify the Australian Taxation Office each month about whether they are making the appropriate payments. Under the system as it exists today the ATO only really ever saw this stuff in the 12 month period, which meant that their ability to act often when businesses fell over – it was all far too late and so the money was gone.
LEON BYNER:
So this will all change right?
KELLY O’DWYER:
This is changing. This is changing right now because of the strong measures that we are taking.
LEON BYNER:
Alright, Kelly O'Dwyer you for joining us today. That is the Federal Financials Services Minister.