Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

I welcome the opportunity to speak on what is a very real concern for many people in our communities. I would like to thank the member for Indi for bringing this motion to the House. Indeed, the superannuation guarantee, along with voluntary contributions, forms an integral part of Australia's retirement system. I also accept and acknowledge, as the member for Indi outlined in her contribution, the very real problem of employers' noncompliance with that system—not that this is a new event, unfortunately. Many governments over a long period of time have tried to find various ways to deal with that issue. When companies are found to be noncompliant, they do face punitive payments and penalties as a result.

But we should bear in mind that this motion draws on the figures promoted by the industry super fund, Industry Super Australia. We have seen that these have been dramatically inflated as a result. On 29 August the ATO published its estimate of the superannuation guarantee gap at $2.85 billion. This shows there is an enormous difference between what the ATO have reported and what Industry Super Australia has estimated. We must ask ourselves: why the difference? The reason, as discovered by the government's superannuation guarantee cross-agency working group, which is led by the ATO and includes APRA, ASIC, the Department of Employment and the Treasury, is that Industry Super Australia's methodology was inadequate. In fact, the Treasury estimates just one of its shortcomings regarding defined benefit fund members accounts for some $2.5 billion—45 per cent of Industry Super Australia's $5.6 billion estimate. It must also be noted that ISA made assumptions about locations of individuals. Because the source data is not disaggregated by federal electorate, it is therefore logical to conclude that ISA's electorate-specific figures would have to have a high degree of uncertainty.

This government accepts and promotes that any level of noncompliance within the superannuation system is illegal and unacceptable. The problem, as outlined by the ATO, suggests a gap of some 5.2 per cent of total potential superannuation contributions. This means that around 95 per cent of businesses are compliant with their superannuation guarantee obligations and they are actually paid. It is important to recognise that 5.2 per cent represents real people missing out on what is rightly due to them. Therefore, we see the suite of measures being proposed presently by those opposite as not assisting the system—in particular, the notion of removing the $450 earnings limit.

Amongst the most important elements of our reform package is the commitment to better informing employees about their SG entitlements and ensuring accountability at every stage. It is true that employees are sometimes unwilling to come forward. I congratulate those people in the member for Indi's electorate who have taken the opportunity to come forward and see their local member and raise their concerns, because that is not always the case. Sometimes, unfortunately, that is out of fear of reprisal such as losing their job.

So modernising reporting, which is another important commitment of this package, will allow the ATO to intervene early on employees' behalf, without receiving a complaint, to address nonpayment before it spirals out of control. Furthermore, the ATO will use the data from funds to provide employees with information about all of their superannuation payments through myGov. It will be able to tell all affected employees about their recovery activities, where previously only affected employees were informed.

The reform package does not stop there. It will increase the range of penalties for employers who are doing the wrong thing, and that is the critical part: to remove the capacity for employers to do the wrong thing by their employees.

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