Welcome call to better align super payments with wages
Industry Super Australia (ISA) is backing the Tax Commissioner’s statement that the use of workers’ superannuation entitlements for cash flow is inappropriate and demonstrates the need for policy makers to ramp up superannuation payment timings to better align with salary and wages.
ISA public affairs director, Matt Linden said the comments made by the commissioner, Chris Jordan at a Senate Estimates Committee hearing in Canberra yesterday highlighted the need for stronger government intervention on super payouts in the wake of a Senate inquiry last month which found the Australian Taxation Office’s (ATO) reactive approach to unpaid super “inadequate”.
Speaking from Parliament House on Tuesday, Jordan said senators were “preaching to the converted” on super payouts and while he did not intend to fight with small businesses over the use of super entitlements for cash flow, the practice had to be reined in.
Linden said data from ISA revealed 2.76 million workers were underpaid their super by an average of $2,035 each at a total of $5.6 billion in the 2013-2014 financial year, and that unpaid super across Australia had begun to decimate retirement plans and would drive up pension costs and shortchange workers.
“The onus is on the Government to introduce legislation to ensure super guarantee payments are made more frequently, and insist that the ATO (Australian Taxation Office) collect ordinary time earnings to help with compliance,” he said.
“The solution to unpaid super is clear to all of us including the tax commissioner; what’s missing is political will.”
ISA also called for the removal of the $450 threshold on super guarantee eligibility, the close of a loophole which allowed voluntary contribution to count towards SG obligations, and an extension on unpaid super guarantee liabilities to corporate entities.
Linden also backed Jordan’s call for across-the-board introduction of Single Touch Payroll technology to support a policy of monthly super payments, rather than quarterly ones.
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