Australian workers have received a $100 million windfall from a controversial amnesty for employers who had failed to pay employees’ super.
The amnesty was proposed by the Coalition in its 2018 budget, and was intended to give employers 12 months from May 24 to repay money owed to workers without fear of retribution.
Despite passing the House of Representatives in June, the bill languished on the floor of the Senate after a backlash from Labor and was never legislated.
But confusion over the state of the proposed amnesty appears to have contributed to a “10 to 15 per cent” increase in employers repaying overdue contributions since May 2018, ATO deputy commissioner James O’Halloran said.
Speaking before the Senate Economics Legislation committee last week, Mr O’Halloran said it was “probably reasonable” to attribute the sudden growth at least in part to businesses mistakenly believing the amnesty was in effect.
In total, 19,000 businesses came forward between May 24, 2018 and February 28, 2019.
About 73 per cent of these were ‘microbusinesses’ with less than $2 million turnover, 21 per cent were medium businesses with turnover between $2 million and $250 million, and 4 per cent were not for profit.
The ATO has also stepped up its audit processes in the same time period, Mr O’Halloran said, and this too may have increased the volume of funds recouped since May.
The growth in employers coming forward has not, however, changed the mind of Shadow Treasurer Chris Bowen, who opposed the amnesty on the grounds it rewards employers who have failed to obey the law.
In December, Mr Bowen said the amnesty allows “dodgy bosses who rip off workers to get off scot-free”, and that Labor would instead “hit them with bigger fines”.
“Nearly three million Australians experienced superannuation non-payment or underpayment in 2015-16, totalling an incredible $5.9 billion in unpaid super,” he said.
“Employers who underpay superannuation to their staff because of a false or misleading statement will face fines equal to 100 per cent of the unpaid super. Employers who fail to tell the ATO about unpaid superannuation when asked will face fines equal to 300 per cent of the unpaid super.”
Assistant Treasurer Stuart Robert did not respond to The New Daily’s requests for comment.
Returning super welcomed by industry
Dr Martin Fahy, chief executive of the Association of Superannuation Funds of Australia (ASFA) said the growth in employers repaying outstanding superannuation was a positive outcome for workers.
“ASFA was supportive of a one-off and short-term amnesty to encourage businesses to pay outstanding employee superannuation entitlements,” he said.
“Notwithstanding that the relevant legislation did not pass, ASFA is very pleased that there has been an increase in businesses paying outstanding employee superannuation contributions.”
Industry Super Australia chief executive Bernie Dean told The New Daily that it was supportive of initiatives that returned superannuation to workers, but added that Mr O’Halloran’s comments suggest the amnesty “has not met its objective”.
“The ATO must not rely solely on a late payment ‘honesty system’ to recoup super that is rightfully owed to workers,” he said.
“The meagre super contributions recovered through the amnesty are a drop in the ocean compared to the approximately $6 billion of unpaid super Australian workers are being robbed of every year.”
A more effective means of ensuring workers receive the superannuation they’re entitled to, Mr Dean said, is for “federal Parliament to legislate the alignment of super payments with wage payments”.
The New Daily is owned by Industry Super Holdings