Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) Share this | Hansard source

Our superannuation system is a significant national achievement. It sits alongside Medicare, the Pharmaceutical Benefits Scheme and the NDIS as something that has made our nation stronger, and it makes Australians proud. Unfortunately, unpaid super has become a huge problem. It impacts on workers right across Australia. Industry Super Australia modelling shows that workers are losing $5.9 billion per year in unpaid superannuation. More than 91 per cent of Australians strongly support the superannuation system. The Australian people know that super is part of a worker's pay and conditions, and every worker deserves to receive the superannuation that they're entitled to.

The proposed Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 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 contribution over the past 26 years. Labor strongly disputes the need for an amnesty for unpaid superannuation guarantee entitlements. On 19 December, the Senate referred the provisions of the bill to the Economics Legislation Committee for inquiry. The inquiry uncovered a distinct lack of stakeholder advocacy for the amnesty. This is not a bill that has a lot of love. In fact, what stakeholders told us was that there are concerns that the amnesty could be counterproductive to broader compliance effort.

This bill totally misses the mark. It fails to address the unpaid super issue. Rather than increasing penalties for employers who don't pay their workers, for example, the government wants to give them a free pass. Why? On what basis? What's the rationale? The academic literature on the effect of amnesties is mixed. Recent work from the International Monetary Fund suggests that amnesties may be counterproductive and reduce further compliance, particularly if amnesties become a regular occurrence and employers assume that they just have to wait for the next one to come along.

During the Senate inquiry, Treasury confirmed that $230 million is expected to be brought forward under the amnesty—a very small amount when you consider this is to cover a 26-year period which, according to Industry Super's modelling, might see as much as $5.6 billion underpaid to workers. The ATO has a more conservative estimate. Their estimate is that the gap is $2.8 billion not being paid to workers over 26 years. Even accounting for inflation, nominal rates et cetera, $230 million is a very, very, very small amount to be recovering from this paltry measure. The grandly titled 'Recovering Unpaid Superannuation' bill doesn't go anywhere near that task.

Treasury officials also confirmed that the inclusion of tax deductibility for payments under the amnesty is intended to be a further driver of encouraging better behaviour from employers. Think about what that means. It means that unscrupulous employers will get a tax break when they finally own up for having done the wrong thing. Businesses who do the wrong thing and steal from workers should pay the price for that misconduct. They should not get a tax break. Usually when employers don't meet their superannuation guarantee obligations they can be liable for penalties or charges. Under the government's proposed amnesty the administration component of the superannuation guarantee charge, and the penalties, would be waived.

If you are an employee and you steal from your employer, you have the book thrown at you. The police will come around to your place. But, under this government's plan, if you are an employer and you want to steal from an employee, no worries, so long as you say sorry. We establish an entirely different rule for employers who steal deferred wages from employees. It is not right and it is not fair. An amnesty for employers who have stolen guaranteed superannuation payments from their employees is outrageous and sends the wrong message that wage theft is acceptable. The bill doesn't penalise wage theft; instead it rewards it. Furthermore, it punishes employers who do the right thing, by allowing their competitors to gain a competitive advantage through noncompliance.

The government's key justification for this bill is that some businesses unintentionally underpay their workers' super. They claim that businesses are too busy, forget or simply don't know that they're required to pay superannuation. It's argued that this is essentially just a kind of maladministration, a mistake. If it's just a mistake, if it's not a deliberate strategy, if it's not a part of the business plan, then why aren't we dealing in equal measure with a superannuation overpayment crisis? I asked about this in the inquiry. Could anyone point me to employers who are finding it very difficult because they had accidentally overpaid their employees their superannuation? Nobody could point to that circumstance, because that is not the dynamic in workplaces and not the dynamic in the market. This is not just maladministration; this is wilful disregard of entitlements that are owed to working people, and it has real consequences. People suffer real hardship when super is not paid.

I want to point of the specific consequences for women. For many women the superannuation guarantee is their only source of superannuation savings. They're not working in jobs where they're stashing away a lot of extra, and nonpayment leaves women facing even greater insecurity in retirement, even greater risk of poverty, housing stress and homelessness.

Every day we hear of another company underpaying their workers, and these stories have real impacts on real people—people like Pamela, who has only $3,000 in her superannuation account after a 20-year career as a chef. Her last job, at Alimentari cafe, paid her cash in hand below the minimum wage with no super. Anna Langford was one of nine staff who was paid less than the minimum wage and therefore underpaid superannuation. When she complained, her shifts were cancelled and she was threatened with a lawsuit. They are workers like Jason, who for the entirety of his employment with a construction company in regional New South Wales was not paid superannuation. After a court decision, he was awarded $30,000 in wages and nearly $7,000 in unpaid superannuation. These stories aren't uncommon, but this bill provides no meaningful remedy for any of those cases.

There are alternatives. One obvious alternative would be to include a right to superannuation within the National Employment Standards—a right which would give employees the power to pursue their unpaid superannuation contributions. Labor intends to introduce amendments to do this.

Currently, unpaid or underpaid employer superannuation contributions are a debt owed to the Australian Taxation Office rather than to a worker. Unless there is a clause in their award or their agreement, workers can't chase this money. It is not technically owed to them. Workers who lodge claims with the ATO may not see action for months, years or at all, with very little information given as to why. The ATO is restricted in the information it can provide workers, so it doesn't share the details of payment plans, nor does it allow anyone to contest employers' claims should they say that they do not have the capacity to repay in a reasonable time. By placing superannuation within the National Employment Standards in the Fair Work Act, all employees would be empowered to recoup unpaid super from employers through the Fair Work Commission or through the Federal Court.

Workers and their unions should have this right. They should have the right to pursue unpaid superannuation as an industrial entitlement and they should have the ability to inspect records of payment. If the government were serious about unpaid super, they would support this amendment. They would ensure that superannuation provisions are in the National Employment Standards and they would allow workers to enforce their rights at work.

This government, as has been more than obviously on display this week, has no plan for the economy, no plan for wages and no plan for Australia. The only plan they have—and it's the plan before us—is to give businesses who do the wrong thing and steal from workers a tax break. Australia's super system is the difference between poverty and a decent, dignified retirement for many people, and our focus should be on improving it. Our focus should be on addressing the fact that the average woman retires with almost half the retirement savings of a man. Labor created our world-class superannuation system and we will always fight to protect it.