The Australian, July 15, 2017
Revenue Minister Kelly O’Dwyer has rejected a call to reduce penalties for bosses who fail to pay superannuation on time.
A recommendation that penalties be made “flexible” is contained in a previously secret inter-agency report examining the non-payment of an estimated $6 billion of super every year, as revealed by The Australian yesterday.
Ms O’Dwyer is to close a loophole that enabled employers to cut the amount of super they contributed if workers made voluntary contributions.
The inter-agency group, made up of members from Treasury, the Australian Taxation Office, the Australian Securities and Investments Commission and Australian Prudential Regulation Authority, said the penalty scheme was “inflexible”.
In recommendation seven of its report, the group said interest penalties should be reduced but “I will not be pursuing recommendation seven of the report,” Ms O’Dwyer told The Weekend Australian.
“A modern superannuation system is one which prioritises the interests of members first.
“That is why we are taking action to close a loophole that was used by unscrupulous employers to avoid their superannuation guarantee obligations.”
The moves came as super funds call for payment terms for employers to be tightened from three months to at least monthly, in order to limit the amount left unpaid when companies go bust.
The super sector also called on Ms O’Dwyer to implement the report’s recommendation that the ATO’s new One Touch Payroll system, which allows it to monitor payroll and tax payments in close to real time, be extended to cover the small business sector, where the risk super won’t be paid is highest.
Industry Super Australia public affairs director Matt Linden said the loophole Ms O’Dwyer had pledged to close was the tip of an iceberg when it came to failure to pay super. “There’s a much bigger problem which affects a much larger group of people,” he said.
He said small business, which is exempt from the One Touch Payroll system, employed about half of Australian workers.
A lack of good data to show the scale of the non-payment problem until recently had also hampered action, he said. “There has not been the priority on this that there should have been.”