The Senate is looking to get tough over superannuation guarantee commitments with its economics reference committee to inquire into their non-payment.
In one of its last actions before it rose for the year, the Senate chose to shine the spotlight on employers who avoid the 9.5 per cent SG payment.
The inquiry will look at the accuracy of data collected by prudential and corporate regulators, along with the effectiveness of the Australian Tax Office’s compliance enforcement for the SG.
In 2015-16, the ATO recouped $241 million in unpaid super, interest and administration fees from employers who in one way or another were avoiding their SG responsibilities.
Australian Institute of Superannuation Trustees chief executive Tom Garcia said the problem was big with billions in unpaid super “quietly leaking” from the system because employers failed to meet their obligations, engaged in sham contracting or became insolvent.
Construction industry super fund Cbus estimates that SG non-compliance costs employees $2.6 billion a year.
Construction is the most affected industry, although so too are employees in property services, mining, hospitality and manufacturing.
Financial misconduct also under microscope
The Labor opposition has pushed through a further Senate financial inquiry “to examine cases of wrongdoing in the banking and financial services sector and to allow victims of financial misconduct, scandals and rip offs to have their voices heard,” said opposition financial services spokesperson Senator Katy Gallagher.
The inquiry will also look closely at existing legislative and regulatory frameworks to ensure they have Australian consumers best interests at their core.
The inquiry will examine:
- The impact of misconduct in the banking, insurance and financial services sector on victims and on consumers;
- The impact on consumers of executive and non-executive remuneration as well as incentive based commission structures and fee-for-no-service structures;
- The culture and chain of responsibility in relation to misconduct within entities within the sector;
- Any failures that are evident in the regulatory or legislative frameworks for the protection of consumers;
- The adequacy of legal advice and representation for victims of misconduct; and
- The availability and adequacy of redress and compensation for victims.
The inquiry will also examine the impact of financial misconduct on small businesses and the social impacts of consumer protection failures in the financial services sector.