House debates

Wednesday, 15 February 2017

Constituency Statements

Superannuation

10:06 am

Photo of Brian MitchellBrian Mitchell (Lyons, Australian Labor Party) Share this | Hansard source

I rise today to talk about the unacceptable level of unpaid and underpaid superannuation in Australia. At an industry briefing held in the parliament yesterday, members were told as many as one-third of eligible workers are being short-changed. Over 2013-14, more than 2.4 million Australians were robbed of more than $3.6 billion. In my electorate of Lyons, the cost to each worker is $2,137, higher than the national average. My office has been helping a shearer, John, who is concerned that several of his employers have failed to pay his super. John is nearing retirement after a lifetime of punishing physical work on the rail lines and in the shearing sheds, and he is worried about how he will survive in retirement. John is typical of many workers who give little thought to super till they get near retirement and then spend months chasing up accounts, only to find some payments have not been made, and then they spend more time chasing the money that is owed.

Superannuation is not a gift that is paid at an employer's whim. It is a legislated right the same as wages, the same as workplace safety, and it is time it is treated as such. When employers do not pay it, they are robbing employees of a decent retirement income and they add to pressures on future pension payments.

Any employer who fails to pay superannuation is a thief, and what is also thievery, if not illegal, is a loophole that allows some employers not to pay any super contributions at all. An ATO ruling from 2006 allows employers to reduce their own contribution when employees salary sacrifice into super. Essentially, the employee's payments do not add to the 9.5 per cent; they replace it—a cruel blow for employees who sacrifice weekly income, believing they are adding to their retirement nest egg. Sixty-one per cent of employees affected by this loophole earn less than $80,000 a year, with the average cost to them being $75 a week. That is a massive cost and it is essentially a direct payment from a worker back to their employer.

This loophole is clearly an unintended consequence of legislation, and action should be taken immediately to close it. I note that a Senate inquiry is underway, with public submissions closing this week. I urge the Senate inquiry to consider these important matters as well as the feasibility of superannuation being paid as part of the pay schedule and not quarterly, with a view to modernising, streamlining and making more transparent Australia's great superannuation system.

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