Monday, 24 February 2020
Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019; In Committee
Thank you, Chair and thank you, Senator McAllister. This will only be relatively short. During my speech on the second reading I indicated that Centre Alliance wouldn't be supporting Labor's proposed amendment, on the basis that the government had made a commitment to us. I would just like to ask the minister to confirm that commitment to the chamber so that everyone has an understanding of what it is you're intending to do.
You have a commitment from the government and from me personally in writing that we will consider the options that have been outlined in Labor's amendment. But we believed that there was a need for some considerable time and scrutiny to be given to the ideas that were put forward in that amendment that hadn't been outlined or hadn't been considered in the committee phases of this bill and when it's gone to the Senate economics committee, twice now.
Yes. My commitment to you, Senator Patrick, was that we would look at that particular idea over the next six months and that we would give to you, and to anyone else that supported that, briefings throughout that period of time as we look at the implications of what those changes might be.
Thank you. I have one more general question. If the bill passes today, I'm just wondering what your strategy is to advertise and to make companies aware of the fact that the amnesty exists. If you could outline that for me, Minister, I would be grateful.
There is a considerable communications and advertising campaign that is going to be run by the ATO. The benefits of the amnesty have been publicly communicated already by the government, both as part of the original announcement and by the ATO through its broader communications activities. Once legislation passes and receives royal assent, it will be communicated publicly to employers by the government and by the ATO. The ATO has advised that there is a significant communications plan in place for the amnesty, which is planned to commence following royal assent. More importantly, the ATO web content will be updated and the SG amnesty form will be made available to employers for employers to apply. The ATO intends to have this published within 24 hours of royal assent.
In addition, external messaging is being finalised ready for release across multiple channels. That includes through ministerial media releases; the ATO's website, ato.gov.au; and the ATO media. A video will also be made available on the ATO website and shared via social media channels and through ATO newsrooms and public relations activities. There will be PR through third-party channels as well, including other government agencies, tax and BAS agents and industry associations. There are plans for an ATO public notice of formal announcement—so there's paid advertising; social media newsrooms; emails to stewardship groups; internal communications to ATO staff; and direct correspondence with those that have come forward previously. So it's quite a comprehensive program of communications.
Minister, I think you have now indicated to Senator Patrick that, over the next six months, the government will examine the proposal contained in Labor's amendment, and that proposal in question is to include a right to superannuation within the National Employment Standards. Am I correct that that's the commitment that you have provided to crossbench senators?
I have provided a commitment to Senator Patrick that it is something that I would look at over the next six months, and that I would brief him throughout that process.
Minister, you indicated to Senator Patrick that you would be willing to provide briefings to him and, I think, to other crossbench members who are interested in this matter over the course of the next six months. Will those briefings be available to the opposition?
It was an understanding that those briefings would be given to those crossbench members that were interested in your amendment but weren't going to support it. So, if you would like to withdraw your amendment, potentially we could give you those briefings too.
Just for clarity, Minister—and I wonder if you might want to reflect on that answer: we've proposed a constructive idea to the chamber, which actually received broad engagement and support. And I'm very grateful to the crossbench for the constructive way that they engaged in that proposal. Crossbench senators have, I think, granted the government time. As I understand it, they have said: 'This is an idea which is good in its essence. We are willing to grant the government time.' That's not our preferred approach—we think we can proceed immediately—but it's the view of the crossbench. You're willing to brief them about this constructive idea that we have presented to the chamber, but you're not willing to brief us about it. Is that correct?
Senator McAllister, this bill has gone to the Senate Economics Legislation Committee twice, and you and I were both members of that committee at the time. Not once has this issue been raised. It wasn't raised in the opposition's additional comments or dissenting reports on either occasion. This is a brand new idea, and we're just beginning to put our minds around it. I don't think it's an unreasonable thing for crossbenchers to say, 'Hey, I don't know anything about this but, if you can investigate it, come back to us and talk to us about it.' I think that we're approaching it with a reasonably open mind and in good faith. So I don't think this is a reasonable request.
Senator McAllister, you've worked with me in the past. You know what I'm about, and I'm quite happy to work constructively with anyone who's happy to work constructively with us. We don't get a sense that this is an amendment that has been put forward in a constructive manner. In fact, we think it's an amendment put forward in order to scuttle this bill. If you would like to remove the amendment, we're quite happy to discuss with you, in good faith, the contents of it.
I don't think that seems like a very good-faith approach to unscrambling a problem. We've got billions of dollars in superannuation not being paid to ordinary workers. We've put a constructive proposal on the table. I think making a discussion with the opposition about that proposal hostage to some procedural demand that you have today is petty and rather unfortunate. I've asked you to consider it or to reconsider your position. You've refused to do so, and there's probably no point in discussing it much further.
I will now move to the amendment. As I said, I appreciate that the crossbench engaged constructively with us. We think this is a constructive idea that, unlike the bill that is presently before this chamber, would actually do something about unpaid superannuation, which in some cases amounts to deliberate theft from hardworking people. For clarity, the amendment that we've circulated would include the right to superannuation within the National Employment Standards, and that would give all employees to the power to pursue their unpaid superannuation. Currently, unpaid or underpaid employer contributions are a debt that's owed by the employer to the tax office rather than the worker. Unless there is a clause in the award or the agreement that covers that worker, the worker can't chase that money as an individual because the debt technically isn't owed to them. This bill seeks to fix that, because it doesn't really work. If a worker is not paid their super, what happens then is that they submit a claim to the ATO. Workers who lodge claims with the ATO may not see action for months or years or ever at all, with very little information given to those people as to why. Actually, the ATO is restricted in the information it can provide to workers, so it doesn't share details of any payment plan that might have been arrived at with an employer, nor does it allow anyone to contest the employer's claim if they say that they do not have capacity to repay in a reasonable time.
This isn't a small problem. The amount of unpaid super, as I alluded to earlier, is staggering. A report from Industry Super Australia has found that 2.94 million workers, a big group of workers, lose $5.95 billion each year in unpaid super. It's outrageous, and blue-collar workers are the ones who are most likely to be ripped off. Machinery operators and drivers, labourers, technicians and trade workers make up more than one million workers whose super is underpaid. Just under one in three community and personal service workers have their super stolen, amounting to more than $468 million. These are some of the most poorly paid workers in our system, doing hard and important work in the community services sector. It is outrageous.
This does represent a fix. Placing super within the National Employment Standards and the Fair Work Act means all employees will be empowered to recoup unpaid super from employers through the Fair Work Commission or through the Federal Court. It would allow them to seek unpaid superannuation in the same way workers can seek unpaid wages. Workers and their unions should have the right to pursue unpaid superannuation as an industrial entitlement. They should have the ability to inspect records of payment. If the government were serious about unpaid super, it would actually support this amendment today and it would ensure that superannuation provisions in the National Employment Standards to allow workers to enforce their rights at work are put into place. I seek leave to move amendments (1) and (2) on sheet 8872 revised together.
I move amendments (1) and (2) on sheet 8872 revised:
(1) Clause 2 , page 2 (at the end of the table), add:
(2) Page 9 (after line 28) , at the end of the Bill, add:
Schedule 2—Superannuation contributions in National Employment Standards
Fair Work Act 2009
1 After paragraph 61(2 )( h)
(ha) superannuation contributions (Division 10A);
2 After Division 10 of Part 2-2 of Chapter 2
Division 10A—Superannuation contributions
116A Superannuation contributions
Obligation in relation to contributions
(1) An employer must make contributions to a superannuation fund for the benefit of an employee so as to avoid liability to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the employee.
Amount of contributions
(2) The amount of the contributions relating to the employee is to be worked out:
(a) in accordance with the Superannuation Guarantee (Administration) Act 1992 ; or
(b) if a modern award or enterprise agreement applies to the employee and provides for an amount higher than the amount applicable under paragraph (a)—in accordance with the modern award or enterprise agreement (as the case requires).
(3) The superannuation fund to which the contributions relating to the employee are made must be:
(a) if a superannuation fund is a chosen fund (within the meaning of the Superannuation Guarantee (Administration) Act 1992 ) for the employee—that superannuation fund; or
(b) if there is no chosen fund (within the meaning of that Act) for the employee and a modern award or enterprise agreement applies to the employee—the superannuation fund specified in the modern award or enterprise agreement (as the case requires); or
(c) otherwise—a superannuation fund for which the choice of fund requirements in section 32C of that Act are satisfied in relation to the contributions to the fund.
Salary sacrifice arrangements
(4) A contribution made by an employer to a superannuation fund for the benefit of an employee under a salary sacrifice arrangement (within the meaning of the Superannuation Guarantee (Administration) Act 1992 ) with the employee does not satisfy the employer's obligation to make contributions under subsection (1).
Superannuation Guarantee (Administration) Act 1992
3 After subsection 37(1)
(1A) Without limiting subsection (1), the Commissioner may amend an assessment if a court or tribunal has ordered the payment of superannuation contributions in relation to an employee and the order has been complied with.
[superannuation contributions in National Employment Standards]
The CHAIR: The question is that the amendments, as moved as Senator McAllister, be agreed to.
I should have put on the record the reason the government opposes this amendment, which is that, while it acknowledges that super theft is a disgrace, the government has worked tirelessly to ensure the integrity of the superannuation guarantee. Most importantly and most recently that was by extending Single Touch Payroll to businesses with fewer than 20 employees, ensuring the ATO has real-time reporting of contributions received by super funds and strengthening the commissioner's ability to collect superannuation guarantee charges.
I have always encouraged people across the parliament to come to me with their policy ideas, knowing I'll carefully examine them on their merits and in good faith. If you are genuinely serious about an idea and you think it's a good policy, you shouldn't be scared to come forward and have it stand up to considered scrutiny. This Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019, as I said, has been to committee twice already—in this parliament and in the last—and, despite it being mooted in testimony before the committee, this idea was not at all recommended by either the majority or the dissenting reports on the bill. Furthermore, it was within the terms of reference of the Senate Economics References Committee's inquiry into superannuation underpayment in the 45th Parliament, chaired by a Labor senator. Again, there was absolutely nothing on this included in its recommendations.
So, as a result, the amendment that was proposed had no opportunity for proper scrutiny. The only reason it should be put up now is as a bad-faith attempt to scuttle a very good bill. It would have been a legislative and regulatory quagmire. Furthermore, the Fair Work Act does not have 100 per cent coverage of Australian employees, with state and local government employees not covered, along with some private sector employees. We felt this policy on the run was policy underdone.
Bill agreed to.
Bill reported without amendments; report adopted.