Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

The Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 includes four measures: a one-off 12-month superannuation guarantee amnesty to encourage employers who have not paid their employees the SG to do so; allowing employees who have multiple employers to apply to the tax commissioner for an exemption certificate from the SG for one or more of their employees, so as to avoid breaching the concessional contributions cap; ensuring that the non-arm's-length income rules for superannuation entities apply in situations where the superannuation entity incurs non-arm's-length expenses in gaining or producing the income; and amending the total superannuation balance rules to prevent self-managed super fund members from being able to use limited recourse borrowing arrangements to circumvent the $1.6 million transfer balance cap and the unused concessional carry forward rules.

We have no problem with three out of the four measures contained in this bill and have no problem supporting those measures through both houses. Avoiding a breach of the concessional contributions cap, the non-arm's-length income rules and the limited recourse borrowing arrangement changes are sensible provisions and we support them. But we have a very fundamental problem with the first measure—the amnesty for employers who have not paid their workers the superannuation guarantee.

Let me be very clear: superannuation is the member's money; it is the employee's money. Superannuation is a condition of employment. It is part of an individual's remuneration. Not paying the superannuation guarantee is wages theft. Not paying the superannuation guarantee is theft from your employees. It should not be provided with an amnesty. If anything, it should be provided with greater penalties for noncompliance. This amnesty would be a penalty holiday for people who had not provided the superannuation guarantee for up to 25 years. Somebody who has never paid the superannuation guarantee to their employees would be able to benefit from this amnesty. This is a serious problem.

There have been various mechanisms to look at this problem. There was a Senate Economics Committee inquiry into superannuation guarantee nonpayment. It made a series of recommendations—some of which the government supports and some of which we support, but most of which were good-faith sensible recommendations. What was not recommended was an amnesty. At no point did the Senate committee recommend an amnesty. The Turnbull government's own Superannuation Guarantee Cross-Agency Working Group did not recommend an amnesty.

This government is making changes that will mean that an employer could have kept superannuation entitlements from an employee for more than 25 years and now will not face any penalty at all if they pay it back. Usually when an employer does not does not meet their superannuation guarantee requirements—and it is found that they have not paid it; it's reported—there are two things that happen: a superannuation guarantee charge is levied, and that is not tax deductible if the superannuation guarantee charge is levied in that circumstance; and additional penalties of up to 200 per cent of the amount of the superannuation guarantee charge can be levied. The government's proposed amnesty will have the effect that the employer in question will be able to claim a tax deduction for the superannuation guarantee charge and avoid penalties. So they are going to make it tax deductible and take the penalties away. Honourable members might recall that we asked the Prime Minister about this in question time a few weeks ago. It was quite clear that the Prime Minister had absolutely no idea what we were talking about. He was unaware that this was his government's policy. It was one of the more embarrassing question times. Although today might have surpassed it, it was a pretty embarrassing question time for the Prime Minister.

We have a fundamental issue with this. I would say that over my 14 years in this House I would have seen—as many honourable members certainly on this side of the House would have seen—scores of people who have not been paid their superannuation guarantee and who have been at their wits' end about how to get their employer to pay their superannuation guarantee. You work with those people and you refer them to the tax office. A lot of women are affected by this in lower-paid, precarious employment, and employers think that they have the whip hand over those employees and that they don't have to pay the superannuation guarantee. It is a big problem. We're not talking about a few people. The Productivity Commission's draft report on superannuation estimates that, conservatively, there is $2.8 billion a year in unpaid superannuation. They did a model simulation of somebody aged between 21 and 25 whose employer did not pay 50 per cent of contributions and would have a retirement balance of $63,000 less than somebody who got all of their contributions, and, if they didn't get any of their contributions at all, they'd be self-evidently close to $120,000 behind. What we do not believe is that an amnesty is an appropriate way to deal with this issue.

If an employer has legitimate reasons, if an employer has made a very legitimate administrative mistake—there's been a natural disaster and their systems have been affected in some way—then, of course, people would understand, but not when an employer has knowingly engaged in theft from their employees and has knowingly engaged in noncompliance with the law of the land. This parliament legislated that the superannuation guarantee should be universal and compulsory, and 'universal and compulsory' means it should be paid to everyone. It's not an option. There are certain workplace conditions in this country which are not optional anymore. Workplace health and safety rules used to be optional. This parliament and state parliaments have improved working conditions. Working hours are regulated; conditions are regulated; there are obligations on employers and employees. You don't pick and choose. It's not a smorgasbord of what you're going to comply with or not going to comply with.

The government could look at the issue of superannuation guarantee noncompliance and say, 'Well, we could increase penalties, we could look at the Senate committee recommendations and we could look at the recommendations of our own working group. We could do all of those sensible things. We could engage with the opposition and we might get a bit of bipartisanship. This is a very serious issue and the opposition are very interested in working with people, with goodwill, across the board to try to fix it. We could do all of those things.' But, no, what does the government do? With no warning, with no indication of any consultation with anybody—certainly no public consultation—and with no process of draft legislation, they simply say, 'We're going to let people off. We're not going to enforce the law of the land.' It's been the law of the land for 25 years. 'We're not going to require employers to pay the superannuation guarantee of their employees. If they haven't, we're going to provide them with a penalty holiday. We're going to make it tax deductible and we're going to waive the penalties.'

This is, frankly, appalling. This is just an appalling piece of legislation. This legislation is an affront. It's an affront to the House and it's an affront to the hardworking Australians who deserve a dignified retirement. We are not talking about luxury; we are talking about people, often on low incomes, who, the parliament decided, under a Labor government, deserved a dignified retirement by having some money put aside for them from every pay packet for their future retirement, and it was legislated. I recognise and accept that the Liberal and National parties opposed that legislation. They opposed compulsory universal superannuation. They argued against it. They said it was a con job. They said we shouldn't have dignified retirement. They said superannuation should be kept the preserve of the few. That's what they argued when the Keating government legislated for compulsory universal superannuation. They made that argument and they lost, and it has been the law of the land for 25 years, like it or not.

The parliament should be saying to everybody, 'If you breach the law, there's a consequence. If this parliament passes a law, we expect it to be complied with.' That's how the system is meant to work. You can't pick and choose which laws you comply with. This is a government who say they're tough on law and order. They lecture us about the people they don't like and how we should be tough on unions and they hold royal commissions, but, if you have an employer who's not complying with the law and is ripping off employees, that's okay—'We're going to let them off.' Well, it's not okay and it won't be okay if we have anything to say about it in this House or the other House. We don't think that this should be the law of the land—that all of a sudden it's optional as to whether you comply with the superannuation guarantee. There is a difference of approach here. The Andrews government in Victoria has announced that it will criminalise wage theft. The Foley opposition in New South Wales have announced that, if they're elected, they will criminalise wage theft in New South Wales. Yet this government says superannuation theft is just fine. Just fine. No penalties. No reason to comply with the law. Don't worry about it.

This amnesty applies for 12 months, but it applies retrospectively for 25 years. What's to say that, when this 12-month period is over, the government's not going to do this again in a few years time? This legislation sends all the wrong signals about the importance of the superannuation guarantee. It sends all the wrong signals about all the wrong priorities of this government. I move:

The motion was unavailable at the time of publishing.

The final point refers to an announcement that the Leader of the Opposition and I made some time ago, that we would actually implement the recommendations of the Murray inquiry into limited recourse borrowing in relation to self-managed superannuation funds. There are some measures in this bill that we support, but the government should go further. They should accept the recommendations of their own inquiry, the Murray inquiry into financial system, as well. I can feel that the honourable gentleman here, the member for Scullin, is very keen to second the amendment. I commend the amendment to the House, and I hope the government sees sense and actually thinks that the law of the land should be complied with, implemented and policed.

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