Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Hansard source

This bill, the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018, includes four measures. The first is the one-off 12-month superannuation guarantee amnesty to encourage those employers who haven't paid their employee super to do so. The second allows employees who have multiple employers to apply to the tax commissioner for an exemption certificate from the SG from one or more of their employers. This helps to avoid breaching the concessional contributions cap. The third ensures that non-arms-length income rules for superannuation entities apply in situations where a superannuation entity incurs more arms-length expenses in gaining or producing the income. And the fourth amends the total superannuation balance rules to prevent self-managed super fund members being able to use limited recourse borrowing arrangements to circumvent the $1.6 million transfer balance cap and the unused concessional cap carry-forward rules.

The three latter amendments have merit, but Labor is certainly opposed to the first principle in this legislation of providing an amnesty for employers who have not been paying their workers the superannuation guarantee. It is clear that what the government is doing with this is basically letting dodgy employers off the hook from prosecution for breaking the law. There is a well-enshrined law in Australia that has been in place for the last 25 years that says employers are obliged to pay superannuation once they're above certain thresholds. And this government now wants to give those employers who have been breaking the law a free pass. You can get away with breaking the law under a Turnbull government because they'll give you an amnesty for it in respect of not paying superannuation.

It shouldn't be a surprise that this government has consistently supported big business and corporations over workers, which is what they're again doing with this particular aspect of this legislation. The fact is that this government is more concerned with the ideology of removing regulations on big businesses and giving handouts to big businesses through their corporate tax cuts than actually ensuring that people are paid properly, that people are paid legally, as they should be, under legislation. Instead of cracking down on bosses who have clearly done the wrong thing, the government is handing out leave passes. It wants to give employers who have not paid superannuation to their employees for 25 years a penalty holiday—that's right, 25 years, a quarter of a century. So you can be an employer who hasn't paid your employees' superannuation for the last quarter of a century and you will get away with it under this government. Imagine if the average taxpayer or the average small businessman didn't pay tax for a quarter of a century and then just rocked up to the Australian tax office and said: 'They're letting the employers off from paying superannuation. How about you give me a break. I'm not going to pay back any of the tax that I haven't paid to the government over the course of the last 25 years.' You would be laughed out of town—and so you should be.

But when it comes to superannuation, those bosses who haven't been paying superannuation for the last quarter of a century will get a break and be free from prosecution. That says everything about this government's approach to big business and their approach to superannuation. We all know that they've never really supported superannuation. They don't believe in the philosophy of compulsory superannuation contributions. They certainly don't believe in industry funds. At every opportunity they reduce the number of people who pay into industry funds and reduce the mechanisms to put people into industry funds. They oppose them. Superannuation theft is as bad as wages theft—and it is illegal. Why should dodgy employers get away with stealing hard-earned money from their employees? Why should employers who have ripped off their workers be given a tax break when the Australian average worker or small business isn't when it comes to paying their fair share of taxes?

This government just can't help themselves when it comes to giving more to business at the expense of Australian workers. And it is a common theme. For too long they ignored Labor's push for a royal commission into the banking industry. Their history on this has already been written. The evidence shows that the Turnbull government continues to get this and other big calls wrong when it comes to financial services regulation and acting in the interests of workers, families and small businesses. They even shut down calls to action on a royal commission from their own backbench. Calls to action from the likes of Senator Williams have been coming from their party room for many years. For 600 days they said there was no need for a royal commission. Given the evidence that has been given before the royal commission so far, Labor has been completely vindicated in our calls for a royal commission.

And here we are with an amnesty for dodgy employers, a surprise announcement that was made without consultation. It came completely out of left field with not a mention at all to the industry, to workers or, indeed, to the opposition. There was no mention of it in the budget. It was presumably a decision that was taken but not yet announced.

There are no recent parliamentary reports into unpaid super that actually recommend such a measure. The superannuation guarantee amnesty wasn't recommended by the Senate Economics Committee when they looked at superannuation and nonpayment. They conducted an inquiry into this, and they didn't even recommend it. Neither was it recommended by the government's own superannuation cross-agency working group, and recent reports of the announcement on the amnesty was a surprise even to the industry—peak organisations like the Association of Superannuation Funds of Australia, ASFA, the Financial Services Council or Industry Super Australia.

It is clear that the Turnbull government decided this at the last minute. It was decided by the minister as another break for big businesses that haven't been paying the right amount of superannuation for their employees. They didn't even bother to consult with key stakeholders in the industry. They will always place ideology above effective policy.

Usually, when employers don't meet their superannuation guarantee obligations, they can be liable for penalties and charges: the SG charge, comprised of the SG shortfall, nominal interest and a $20 per employee per quarter administrative component. Penalties can be up to 200 per cent of the amount of superannuation guarantee charge that is not paid.

There are general interest charges where the SG charge or penalties are not paid by the due date. Under the government's proposed amnesty, the administrative component of the SG charge and the penalties would be waived as well. Even worse, the SG charge and contributions offset against the SG charge would become tax deductible for employers, so dodgy employers get a tax break for doing the wrong thing. Yes, it's another unfair, undeserved tax handout from this government to large corporations.

The Prime Minister is out of touch. You've got to laugh at the hypocrisy of the Prime Minister coming in here and saying that Labor has been out of touch when it comes to economic policy and tax policy. We are the ones opposing the big tax cut for large companies, which is overwhelmingly opposed by the Australian public, particularly Australian workers, who haven't been getting wage increases for the last decade, really. They can see that it's unfair to be handing out a tax cut for big businesses. Only someone as out of touch as the Prime Minister would be seriously suggesting a reform such as this.

Businesses who do the wrong thing and steal from workers should pay the price for their misconduct, not get another tax handout from this government. When employees steal from employers, they rightfully have the book thrown at them and they are prosecuted. Why is it one rule for businesses and another rule for workers? The government is really saying that it's okay to steal from workers but it's not okay for employees to steal from their bosses—as it shouldn't be; no worker should ever steal from their boss. But this government is going to allow employers to steal from their workers.

Unpaid super is a massive problem across Australia. Recent estimates point to 2.4 million workers losing about $5.6 billion in superannuation payments each year. That's equal to those workers losing $2,000 per year; that's money that should be going into their retirement savings. Superannuation is part of a worker's pay and conditions and every worker deserves the right to superannuation that they are entitled to.

I just wish to finish with some final comments about the limited recourse borrowing arrangements. Schedule 4 of the bill amends the total superannuation balance rules that were introduced as part of the government's 2016 super reforms. The changes in schedule 4 are integrity measures to ensure that—in certain circumstances, involving LRBAs—the total value of a superannuation fund's assets is taken into account in working out individual members' superannuation balances.

Let's not forget that in 2014 the Financial System Inquiry recommended that super funds not be permitted to use LRBAs at all. They observed:

Further growth in superannuation funds' direct borrowing would, over time, increase risk in the financial system.

So, unfortunately, the government rejected that inquiry recommendation. Labor announced that we would prohibit this, as part of our housing affordability. This will prevent the unnecessary build-up of risk in Australia's superannuation industry. Labor created superannuation and will always defend it, and that's why we support the three other measures in this bill but we can't support the measure which allows wages theft from employees.

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