Senate debates

Thursday, 13 February 2020

Bills

Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019; Second Reading

11:39 am

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | Hansard source

Compulsory superannuation is an essential pillar of Australia's retirement income system. This was highlighted very, very succinctly by the then Treasurer Dawkins, a Labor Treasurer, when he said superannuation was 'an important mechanism for increasing national savings and improving the flexibility of future government budgets in the face of an ageing population'. He made that comment to demonstrate how important it was for Australia to think carefully about the construction and maintenance of its compulsory superannuation arrangements. The 2015 intergenerational report clearly demonstrates that Australians are living longer. In 1974-75, the number of Australians over 85 was around 80,000 people, or less than one per cent of the population. By 2054-55, it is projected that this will grow to around 4. 9 per cent of the population, which will equate to nearly two million Australians aged 85 and over. In this context, the Intergenerational report stated:

An ageing population also underlines the importance of considering the overall adequacy of our retirement incomes system — which combines compulsory and voluntary superannuation, and the Age Pension as a safety net.

Indeed, the Intergenerational report found:

In 2013-14, about 70 per cent of people of Age Pension age were receiving the Age Pension. Of these pension recipients, around 60 per cent receive a full rate pension.

Should this proportion continue, it will place on the Australian Commonwealth budget a very substantial burden for future governments to manage, which is why there is strong and important bipartisan support for increasing the retirement savings of Australians through our compulsory superannuation system. I'd suggest that where the government and the opposition vary on this issue is that the coalition government recognise the importance of boosting retirement savings within the context of the current economic environment. There's no point boosting savings for those in a job if it means that significantly fewer people are in work and therefore they do not have the opportunity to save for retirement.

The Morrison government has already taken strong action to protect Australians' compulsory superannuation and to crack down on late payments. In March last year, the coalition government legislated a suite of reforms to improve the compulsory superannuation system to improve detection and increase deterrence of the underpayment or failure to pay compulsory superannuation. This includes the expansion of Single Touch Payroll to all employers from July 2019. Single Touch Payroll revolutionises the ATO's ability to track underpayment of superannuation as well as PAYG liabilities in real time. This is a game changer and aims to reduce regulatory burden by an efficient, technology based solution while simultaneously increasing compliance. I acknowledge, like others do, that the implementation of Single Touch Payroll has been burdensome for a number of businesses. However, I am confident that, over time, business will see the benefits of this system.

As well as tackling the issue of on-time payment, last year the parliament passed the Treasury Laws Amendment (Putting Members' Interests First) Bill 2019, which tackled default insurance undermining the super balance of young Australians and those with balances under $6,000. I also add that I note that the merit of this is still contested in some parts of the community and it is a matter I will pay or continue to pay very close attention to. Nonetheless, these are two significant measures to boost the savings of Australians.

The bill we are discussing today seeks to legislate the government's announcement of 24 May 2018 to provide an amnesty to businesses who self-report errors in historical superannuation payments. So you might ask why this amnesty is important. From my perspective, there are two issues worthy of note. The first is that the ATO does not have the resources to audit every business's superannuation contributions. Just as the ATO does not have the resources to audit every individual taxpayer every year, it is unrealistic and would be incredibly inefficient if superannuation liabilities were checked by the ATO each and every year.

I note, of course, that, going forward, Single Touch Payroll does mean that the ATO will have significantly more real-time data to identify and address superannuation guarantee anomalies. It makes sense to provide an incentive for individual businesses to self-audit and fix issues before they face the significant penalties that now apply for failure to pay the superannuation guarantee. Since the introduction of the amnesty, 7,000 businesses have already come forward, and the Australian Taxation Office expects an additional 7,000 businesses to do so following the passage of this legislation. That's 14,000 Australian businesses admitting liability without a resource-intensive audit by the Australian tax office, and 14,000 businesses coming forward means there will be thousands and thousands more that have undertaken a self-audit without finding previous errors in payments.

The second issue which is fundamental to the operation of this government is that this is an important measure to enable small, medium and family businesses, in particular, to address genuine issues of the past without potentially business-destroying penalties. The chief executive of—

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