Steve Irons (Swan, Liberal Party) Share this | Hansard source

I totally agree with you. I've just said there is an issue, and I agree with you that it's an issue that needs to be dealt with, but we need to do it with real figures and not figures that are inflated.

Any level of superannuation guarantee noncompliance is unacceptable. As we heard from the member for Shortland, he wants to jail them, but I think that might be going a bit far, depending on the category or size of that noncompliance. That is why the government has established a cross-agency working group led by the ATO and including APRA, ASIC, the Department of Employment and the Treasury to investigate these issues and recommend solutions.

I note that the member for Indi's motion has called on the government to accept and act upon all 32 recommendations from the Senate Economics References Committee inquiry into the superannuation guarantee. This government will not adopt blanket recommendations to keep up an appearance of doing something. Instead, we are working collectively towards achieving real outcomes in safeguarding workers' entitlements. For example, the Senate committee recommended things that have very little impact on noncompliance but would instead expand superannuation entitlements, like abolishing the $450 rule, reviewing the definition of ordinary time earnings or requiring more frequent superannuation guarantee payments. The rule that SG is not payable to employees earning less than $450 a month is a longstanding feature of the superannuation system that is well understood.

Noncompliance is largely driven by cash flow issues and not confusion about definitions. I know that the member for Indi, who has experience in business as well, knows that there are many situations where employers are paying their superannuation guarantee levies out of their own cash flow when they're still waiting on huge debtors and creditors to pay their bills and fund them as well. So it is a fine balance for many businesses out there, particularly in the current economy, but, again, no excuse for not paying the particular superannuation guarantees that they are obligated to pay. The government's response to increased visibility targets the key problem as well. Similarly, the use of ordinary time earnings as the basis for the superannuation guarantee is well established and benefits from considerable guidance from the ATO. Any confusion about the definition of OTE is not a key driver of noncompliance.

Requiring more frequent payment will also do little to improve compliance. More onerous superannuation guarantee payment rules can only make compliance more difficult for small businesses, particularly those with cash flow problems, as we've heard before. Already, with the PAYG and the BAS payments, you see companies paying PAYG when they're not earning any money at all, and the government is taking money from them and the ATO is taking money from them. We must be careful that we balance, particularly for small businesses, the cash flow problems. Around two-thirds of employers pay SG more frequently than the required quarterly payment in any case, so there is no value in mandating more frequent payments when its impact on compliance and the total guarantee payments will make little difference.

To the member for Indi: thank you for raising this. It is a real issue, and I'm sure the outcomes from the government's actions will lead to a better system in the future.

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