ATO could net $1 billion windfall
The Federal Government’s changes to superannuation for temporary residents could net the Australian TaxationOffice (ATO) up to $1 billion, according to Deloitte tax partner Sarah Lane.
Earlier this month, Super Review reported Senator Nick Sherry’s release of a discussion paper which indicated that the future contributions and existing balances of temporary residents’ superannuation would be paid to the Federal Government.
Under the new measures, which were first announced by the previous Government, temporary residents will have to claim their superannuation within five years or it will be forfeited.
“While there is merit in a policy designed to reduce the administrative costs and amount of lost super in the system, this change will significantly affect the attractiveness of Australia as a destination for skilled foreign workers,” Lane said.
“[The cost is] difficult to calculate precisely, but with over 100,000 skilled workers currently sponsored for a visa by Australian companies and the upward pressure on wages, particularly in the West, $1 billion is not out of the question,” she said.
She added that the Government is seeking feedback on this proposal by next Monday, May 26, and that Deloitte believes now is a good time to remove the requirement for compulsory super contributions for all temporary residents.
“Australian businesses are already struggling to cope with the skills shortage,” she said.
“We shouldn’t be making it harder for business to compete for overseas talent by introducing such discriminatory measures for temporary residents.”
Senator Sherry has said the measure is not inconsistent with the way Australians who work overseas are treated on their permanent return to Australia.
“In many cases they cannot access compulsory social security or employer pension contributions made in that overseas country,” he said.
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