The only people and groups which benefit from Australia’s superannuation system are the funds and their corporate and union stakeholders, according to the Council of Small Business Organisations of Australia (COSBOA).
In a follow-up submission to the Productivity Commission inquiry into superannuation competitiveness and efficiency the COSBOA has reinforced its argument that employers should either be removed from the superannuation guarantee (SG) collection process or be paid for the work they do in ensuring payment of SG contributions.
The submission described the obligation on employers to pay the guarantee as a “forced arrangement”.
“… this forced arrangement combined with the nature of the make-up of superannuation funds has created a collection process that creates confusion and inefficiencies for business and superannuation funds as well as for members of funds,” it said.
“It also provides opportunities for vested interests to manipulate the system to their advantage and to the disadvantage of members in their funds as well as to the employers forced to collect their contributions,” the submission said. “Indeed, the only individuals in the system who do not get paid for the work they do is the small business person who is also the only person who can get fined.”
“Furthermore, as discussed at the hearing, we believe the current threshold for payment of superannuation has been set at $450 earnings over a period of a month (in most cases) since the inception of the Superannuation Guarantee.,” it said. “This was originally determined based on the tax-free threshold; that threshold has now risen from what was around $5,000 to over $18,000.”
It said that, on this basis, the threshold had to rise to match that increase.
“We do note however that under our proposal to remove employers from the collection process that the idea of a threshold for earnings for superannuation to be paid becomes redundant,” the submission said. “We would like to reinforce that the current superannuation collection process is overly complicated and lacking in transparency for employers and employees. It seems that the only people or groups who benefit from the system are the funds and their corporate and union stakeholders.”