Paul Scarr (Queensland, Liberal Party) Share this | Hansard source

It is a delight to follow my good friend Senator Smith, who perfectly encapsulated many of my thoughts on this issue without having the benefit of reading my speech beforehand. I must say, Senator Smith, you're an easy act to follow. Having covered the ground so extensively, it's going to be hard for me to leave out any relevant points.

Firstly, I want to provide some overall context to this legislation, the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019, because I think it's important that we see it in the context of a whole range of superannuation reforms which are being undertaken by the current government. Those include reforms which deal with compliance through the Single Touch Payroll system and through real-time reporting of deposits made to superannuation funds, and with the enforcement aspect, including an increase in penalties against those employers who do the wrong thing—not inadvertently but deliberately. Another reform is resourcing. Just on that point: an extra $133.7 million was given to the ATO between 2018 and 2019. That resulted in $805 million of unpaid super being delivered to its rightful owners. From my perspective, that ratio of six to one in terms of enforcement dollars being spent against the actual outcome is a positive outcome and a good efficient expenditure of government resources.

Lastly, the last limb deals with efficiency. That means dealing with excessive fees in superannuation funds, dealing with the phenomenon of unnecessary insurance being provided through superannuation funds, through the levying of duties and also reuniting people with the lost super. There are a number of reforms taking place, and this is one of them.

I'd like at the outset to deal with the philosophy of an amnesty. We live in a society which has the rule of law, so it's a good question to ask: in what circumstances is it appropriate that an amnesty should be granted to those who are doing the wrong thing? On reflecting on this, in the context of this legislation from my perspective, I think there are three guiding principles. Firstly, any amnesty should be rare and the explanatory statement for this legislation makes it quite clear that this is a one-off amnesty; and, secondly, it only covers a limited period of time. There's only a limited amnesty period in which employers who have not deducted superannuation, paid superannuation, for their employees to make payments—that is, from 24 May 2018 to six months after royal assent is given to this legislation. So, tick: this amnesty meets that requirement in terms of it being rare.

The second element I believe should apply to all amnesties when they come for consideration before the Senate is whether or not the amnesty will assist the victim or hurt the victim. In this case, the evidence is clear that 7,000 employers thus far have taken advantage of the amnesty to pay unpaid superannuation into the accounts of their employees. So, in that respect, this amnesty is actually assisting the people who are the victims—the employees who did not receive their superannuation payments. Treasury estimates are to the effect that an additional 7,000 employers are likely to come forward and make payments, correct those errors—and, in many cases, as Senator Smith said, they're inadvertent errors. So this amnesty will assist those who have suffered a detriment through the superannuation not being paid.

Lastly, the third principle, I think, which has to apply and which I believe this bill meets is that the amnesty should be reasonable and it should be proportionate. If you look at the whole of the bill, that requirement is met and it's met in a number of ways. Firstly, it only applies to employers trying to do the right thing. They have to self-report; it's self-disclosure. Once the ATO starts investigating an employer, it's too late for the employer to come forward. Secondly, it acts to keep the employee whole, and Senator Smith referred to the interest rate that applies to the contribution of superannuation if there's late payment. So it keeps the employee whole, and I think that's important. Thirdly, the payment must be made by the relevant time. It is one thing to self-disclose, self-report, but it's another thing to actually meet your commitment and make the payment on time. If you don't make the payment on time then the amnesty won't apply.

The fourth observation is: as an employer who has not paid your superannuation contributions, does not take advantage of the amnesty period and does not make the payment, you do not comply. If the ATO then identifies you as someone who's in breach, the ability of the ATO to remit the penalties which apply to you is circumscribed. At the very least, except in extraordinary circumstances, if an employer has not complied, not taken advantage of the amnesty period, not met obligations when given this rare opportunity to do so and been found to have done the wrong thing, the ability of the ATO to remit the penalties is circumscribed. And the penalties will constitute at least 100 per cent of the unpaid amount plus general interest, plus there's no tax deductibility for those payments.

From my perspective, we have a situation here where, firstly, you have an amnesty being applied in rare circumstances—it's a one-off—and it only applies to a limited amnesty period. Secondly, the amnesty will actually assist the victims—that is, the beneficiaries of the superannuation funds. Because we've had 7,000 employers take advantage of the amnesty, and another 7,000 employers are estimated to be willing to take advantage of the amnesty, we're assisting the beneficiaries of those funds to get their superannuation amounts. And, thirdly, when you consider the bill as a whole it's reasonable and it's proportionate. On that basis, I'm very happy to support this legislation.