Wednesday, 27 November 2019
Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019; Second Reading
That all words after "That" be omitted with a view to substituting the following words;
(1) declines to give the bill a second reading;
(2) notes that the Government is not doing enough to combat the blatant theft of worker's entitlements by dodgy bosses;
(3) calls on the Government to help Australians unions protect Australian workers from superannuation theft; and
(4) further calls on the Government to end policy uncertainty on superannuation and ensure Australians can enjoy a comfortable retirement by committing to the legislated increases to the superannuation guarantee".
I rise to speak in favour of the amendment that is moved in my name. The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 contains a single schedule that would provide for a one-off, 12-month superannuation guarantee amnesty for employers who have not paid their required superannuation guarantee contributions—not for the last year, not for the last two years, not even for the last five years or even the last decade; in fact, not for the last two decades—for the last 26 years. You heard that right. The bill contains a schedule which will provide an amnesty for employers who have not paid superannuation for the last 26 years.
The measure was previously introduced in the 45th Parliament as part of an omnibus bill. At that stage Labor did not support the bill. We scrutinised it, we consulted with the experts, we consulted with the stakeholders and we formed the view that to support the legislation was not in the public interest.
Mr Howarth interjecting—
I will get to you!
Mr Howarth interjecting—
You will feature in this show. To the matter before the House: unpaid superannuation is actually a massive problem. On that matter, we agree with the more enlightened members on that side of the House that it is a massive problem. Industry Superannuation Australia has estimated 2.4 million workers are losing somewhere in the vicinity of $5.6 billion in payments each year. The Australian tax office takes a slightly different view. It says the amount is roughly half that. So somewhere between $3 billion a year and $5.6 billion a year is being lost to workers' superannuation accounts. So, whether you take the ATO's amount or whether you take the estimates of Industry Superannuation Australia, we have a massive problem with superannuation theft in this country. To put this into perspective, that's equal to those workers losing $2,000 per year which should be going into retirement savings. Two thousand dollars per year is being robbed from those workers. Superannuation is part of a worker's pay and conditions. Every worker deserves and, in fact, is entitled to receive their superannuation as a matter of law.
The government have made an absolute meal of this bill. I've said publicly they have absolutely cocked it up. They botched the handling with the business community. They announced and, indeed, encouraged employers without the support of legislation to put their hands up, and we understand that hundreds if not thousands of employers have done exactly that on the promise of an amnesty—that is, they will not pay the fines that are attached to the crime of not paying these superannuation amounts.
We on this side think the bill is a problem. We think the whole scheme is a problem. If the government were serious about unpaid superannuation, they would be looking at a much wider suite of policies. They would be looking at how they can enhance enforcement activities. They would perhaps ensure that workers and their representatives have standing so they could take actions in small claims tribunals and in courts of competent jurisdiction throughout the country to recover unpaid superannuation so that it doesn't fall just to the taxpayer and the Australian tax office to action those unpaid super amounts. We could beef up the resources in the Australian tax office to ensure there is a more aggressive approach towards unpaid superannuation, a more forward-leaning approach to unpaid superannuation. In fact, with an entire suite of approaches, of which perhaps an amnesty was just a small part, you might say that is something worth looking at. But a 26-year 'get out of jail free' card for employers who have been systematically doing the wrong thing does not pass muster.
In the last parliament, Labor senators who inquired into the measure found that the academic literature on the effect of amnesties is mixed and that, in many cases, an amnesty can be counterproductive. How can an amnesty be counterproductive? We found, in other jurisdictions and in other circumstances, that if a non-taxpayer—somebody who is doing the wrong thing—believes an amnesty is just around the corner they will repeat and they will continue their non-paying behaviour. It actually extends the crime.
I thank the member for Mackellar for his interest. I note that he hasn't had the energy, forethought or concern to put himself on the Notice Paper for this bill. If he wants to make a contribution in this debate he should jump. He should put himself on speaking list. He hasn't shown enough interest in it to date to do so, so, no, I won't be taking any intervention from the overexcited member for Mackellar. Do the normal course of events and put yourself on the speaking list.
While employees have the book thrown at them for stealing from employers, by introducing a superannuation guarantee amnesty the government is establishing a different rule for employers who steal deferred wages from employees. Not only have the government failed to address the issue of unpaid super, they have also botched the handling of this issue with business and the ATO.
The Senate inquiry has found that while employees have the book thrown at them for stealing from employers, the government, by introducing an SG amnesty, is establishing a different rule for employers who steal deferred wages from employers. It's a simple fact, undisputable, that it's a different rule for SG amnesty as opposed to other unpaid wages and entitlements.
Let's look at what would occur, what would follow, if this bill passes because there may be many on the other side who say, 'Yes, we get that this is a dud bill but is it going to do some good in the scale of things?' Treasury has confirmed that $230 million is expected to come forward under this amnesty. Unfortunately, that is a drop in the ocean for a 26-year period. Estimates are the annual SG gap is $5.9 billion but $230 million is likely to come forward as a result of this amnesty.
We want you to think what is going to go on. Let's take two bakers working in the same town. One of them is complying with their obligations under the SG laws paying their 9.5 per cent to their employees and paying all their rightful entitlements while the baker down the road is not paying their 9.5 per cent superannuation guarantee requirements. Their wages bill is more than 9.5 per cent less than the baker down the road. They have an advantage. Everything they sell, everything they put on their shelves, goes to market cheaper because they have sought and found an advantage by doing the wrong thing and breaking the law.
Through this amnesty, we will be congratulating, we will be rewarding and we will be saying to the baker that has done the wrong thing, 'We're going to forgive your sins and you are going to have obtained the historical advantage over the baker that has done the right thing.'
As my colleague the member for Blair has pointed out, there is nothing in here that is going to stop them from continuing to do the wrong thing. There is nothing that is going to stop them from recidivist behaviour. An amnesty for employers who have stolen guaranteed superannuation payments from their employees, we believe, is simply the wrong way to go. The proposed amnesty is for employers who have not complied with their superannuation guarantee obligations. They are going to get a leave pass for doing the wrong thing for up to 26 years.
Superannuation theft is just as bad as wages theft. We don't think the employers, the businesses that have done the wrong thing, should be rewarded while employers that have been doing the right thing, struggling through difficult times, are going to be relatively disadvantaged. Importantly, this was not recommended by the Senate economics committee that inquired into superannuation guarantee non-payment. No recommendation came from that committee that looked in a detailed, deliberative way at those provisions—nor was it recommended, interestingly, by the government's own superannuation guarantee cross-agency working group. It didn't come from there. It didn't come from the Senate. Effectively, what is going on here is that the lawbreakers are going to get a tax cut. The government's proposed changes mean that an employer could have kept superannuation entitlements from an employee for more than 25 years. They will not face any penalty if they pay that back during the amnesty. Rather than increasing penalties for employers who do not pay their workers' superannuation, the government wants to give them a free pass.
Usually when employers do not meet their superannuation guarantee obligations they can be liable for penalties and charges. An SG charge, which is composed of the SG shortfall together with nominal interest and a $20 per employee per quarter administration component, will be waived. Penalties can be up to 200 per cent of the amount of the SG charge plus a general interest charge when the SG charge or penalties are not paid back by the due date. Under the government's proposed amnesty, the administration component of the SG charge and the penalties will be waived. Quite simply, what we are proposing to do here is penalise employers and businesses that have done the right thing and reward businesses that have done the wrong thing.
My second reading amendment also calls on the government to end the uncertainty around superannuation. If you talk to workers, if you talk to people within the industry, the first thing they will mention when we talk about superannuation is the uncertainty. The continual chopping and changing of policies, the uncertainty around the future settings and the uncertainty around where the government is going on this is undermining confidence in the sector and it is undermining the willingness of workers and others to do what the superannuation system was set up to do. It was set up to enable and encourage them to save for their retirement.
The sort of uncertainty that I am talking about comes from members such as the member for Mackellar, a self-declared member of the 'dirty dozen'—these are the 12 MPs who believe—
Honourable members interjecting—
They're something short of a majority, even in their own caucus.
And I will. I will refer to a member of that unseemly 12, of that dirty dozen, as the member for Mackellar.
Mr Falinski interjecting—
The member for Mackellar has outed himself! He's outed himself as the shop steward of this group. They claim:
It’s fair to say that in Canberra if you get most members of parliament, regardless of which side they sit, without a microphone around them you wouldn’t find a lot of support for an increase in the super guarantee much over 10 per cent.
I look behind me and I see Labor members of parliament. Are we agreeing with that?
Honourable members interjecting—
He is in a minority in his own party room, and he's certainly a minority in this parliament. The empty vessels sometimes make the most noise, don't they? If only he was alone a few days ago. A few days ago, the newly minted senator from New South Wales, who once worked for an organisation that was very, very attached to superannuation, described superannuation as 'a cancer'. The senator for New South Wales said:
I would change direction: superannuation should be made voluntary for Australians earning under $50,000.
You've only got to think for about 30 seconds—three seconds if you're a quick thinker; 30 seconds if you're the member for McKellar—to understand that that means if you're a high-income earner you get massive tax breaks and if you're a low-income earner you're going to be paying more tax on that money, which is deferred to wages as opposed to superannuation. So this is a recommendation for higher tax on low-paid workers.