Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Hansard source

I know—go figure. It was pretty bad. I'm glad the other Julie Owens didn't retire and take it all before I managed to get it back. I did get it back because I have an employer who tries to do the right thing, but it turns out that there are many, many employers who don't. Industry Super Australia released some figures recently that showed that 2.4 million workers are being underpaid $5.6 billion in payments a year. That's about $2,000 a year for each of those workers. That's an incredible amount of money to lose from your retirement savings, particularly if you're a low-income worker. For many, that would be their entire super for the year.

The ATO disputed those figures, but it released some of its own. It estimated in 2015 that up to 20 per cent of businesses were noncompliant with their superannuation obligations, saying that the issue of noncompliance was 'endemic, especially in small businesses'. Since then they've released some figures for the 2017-18 financial year showing that the number of business owners who failed to pay their employees super had increased by 60 per cent in that year alone—more than the 20 per cent that they believed weren't paying in 2015—and that the number of employees who had lodged complaints against employers had skyrocketed by over 56 per cent from 8,200 in 2016-17 to 12,903 in 2017-18. One would assume that the number of employees who actually complained would be small relative to the number of employees who weren't aware that their super had not been paid appropriately.

As the previous speaker said, it is a guarantee. It's a super guarantee. I was in the workforce just before it was introduced. When I was 30, there was no super. I'd just finished paying off my university degree. I had no savings at all. I went along to an investment adviser who specifically advised women, and we began to set up some superannuation savings. It was a few years later that the superannuation guarantee was first introduced. I remember those years. I remember the deal then. Workers gave up pay rises. We actually agreed as a workforce that we would give up pay rises while the super scheme was introduced. It was actually part of our pay. It was negotiated. It was agreed on. It became part of our pay. Our long-term savings for our retirement became part of our pay package. It was understood then that super was part of our wage; and, as it's gone up over the decades to the 12 per cent or so that it is now, it is still part of our wage.

I understand sometimes why small business doesn't think it is part of a wage, because you pay it later. I was a small business. Back when I was a small business, super was really hard to pay. You could pay wages by electronic transfer, but you had to fill out paper forms for the super companies every three months. It was unbelievably painful. I totally understand why sometimes a business will think, 'This is different. It comes later. You pay it in a lump sum.' But it's not. The fact that you pay it in a lump sum later, rather than fortnightly or monthly with wages, doesn't mean it's not still part of the wage. It is. We know that as businesses because we cost the super into our decisions to employ a person. When we employ a person we work out how much it's going to cost to do that. We work that out. If we're any good at all in business, we know that that's part of the cost of employing an employee. One wonders why so many businesses—up to 20 per cent—don't pay their super guarantees as they should and why the number of businesses that paid the penalty went up by 60 per cent between 2016-17 and 2017-18. There is clearly something really wrong going on out there.

Of course, it isn't just about super. We have a much bigger issue of wage theft in our community at the moment. Again, just as we've seen the government essentially sit on its hands for five years on the non-payment of super, we've also seen it sit on its hands in relation to other kinds of wage theft. In 2015 we saw some extraordinary examples: Myer subcontractors employing cleaners on sham contracts, resulting in them being denied penalty rates and superannuation and working without OH&S protections; the systemic exploitation of 7-Eleven store workers involving the doctoring of pay records; Pizza Hut delivery drivers being paid as little as $6 an hour in rampant sham contracting arrangements; widespread exploitation of workers in Baiada food processing factories—and it goes on. We're hearing, over and over again, stories of businesses that are not paying workers properly, whether it's wages, conditions or super guarantee. These high-profile examples are just the tip of the iceberg. In 2014-15, the Fair Work Ombudsman recovered $22.3 million in back pay for over 11,000 workers. But that pales into insignificance against the $5.6 billion in super payments each year. This is something that must be fixed.

One would have to question whether what we're talking about today is something that will fix this problem at all. What we're talking about today is the government proposing to give an amnesty to employers who have not complied with their superannuation guarantee obligations. If you haven't paid your superannuation obligations, you'll have a year to pay without penalty. But superannuation theft is just as bad as wages theft, and I find it hard to understand why a government would look at $5.6 billion in underpayment of workers every year and think that we could just waive that with an amnesty. You've broken the law; you've stolen from your workers, sometimes for years. No problem. Pay it back. No problem; slate cleaned; no worries—except for the workers, of course, who've been badly dudded, sometimes for years.

Why should employers who've ripped off their workers be given a tax break as well? The government is actually doing that as well. It's allowing a tax deduction on the charges, so these employers will have no penalty and a tax deduction. This government just can't help giving more and more backdoor ways for businesses to dud their workers.

The amnesty was a complete surprise, and it was announced without any consultation. It wasn't recommended by the Senate Economics Committee inquiry into superannuation guarantee nonpayment, neither was it recommended by the government's own Superannuation Guarantee Cross-Agency Working Group. The Turnbull government's proposed changes mean an employer could have not paid an employee's superannuation entitlements from right back to 1 July 1992, right back to the beginning of the superannuation guarantee. That is 26 years. You haven't paid your super for 26 years? No problem. Waive the penalties. Walk away. No foul. No problem. That is 26 years of underpaying. After 26 years of stealing from your workers you'll get an amnesty—not an amnesty for the last six months, not an amnesty for a year, but an amnesty for 26 years of nonpayment.

And the government wants to give them a free pass. Usually, when employers do not meet their superannuation guarantee obligations, they can be liable for penalties and charges: a super guarantee charge composed of the shortfall, nominal interest and a $20 per employee per quarter administration component; penalties which can be up to 200 per cent of the amount of the super guarantee charge; a general interest charge where the super charge or penalties are not paid by the due date. But, under the government's proposed amnesty, the administration component of superannuation guarantee charge and the penalties would be waived. But, even worse, the superannuation guarantee charge and contributions offset against the charge would become tax deductible for employers. So the dodgy employers who have been stealing from their staff, stealing from their workers—in many cases for years—get a tax break and an amnesty.

The Prime Minister had absolutely no idea of these moves when asked about them by the Leader of the Opposition in question time. He simply didn't know. Only someone as out of touch as Malcolm Turnbull would reward dodgy businesses who have been robbing workers for 25 years with a free pass. Businesses who do the wrong thing and steal from workers should pay the price for their misconduct, not get another tax break from Turnbull. The amnesty for dodgy employers comes completely out of left field. It wasn't mentioned in the budget. It presumably was a decision that had been taken but not yet announced. But there are no recent parliamentary reports into unpaid super guarantee that actually recommend such a measure. Let's remember again that what we're talking about here is theft—theft of $5.6 billion every year from 2.4 million workers. That's around $2,000 a year.

We know that the government doesn't like superannuation very much. We know that Liberal governments in the past haven't liked it and we know they don't like it now. At every step over the years, conservative governments have stood in the way of our compulsory superannuation system. They fought tooth and nail against it when it was first created back in the early nineties. They hated it. They voted against increasing the super guarantee above three per cent. They opposed it initially. They voted against the increase to three per cent. They tried to abolish the low-income superannuation contribution scheme which boosted the superannuation of low-paid workers. They delayed the super guarantee increase to 12 per cent, quite recently, in the term of the Abbott-Turnbull government. They tried to weaken penalties for employers who didn't pay the right amount of super, before we beat them back. Now there is no penalty. There is no penalty now. They've gone one step further: 'Instead of weakening the penalties, let's wipe them out altogether!' Remember too that those opposite recently wanted to undermine the entire super scheme by allowing people to access their super accounts for a house deposit. They just don't like the superannuation scheme that we have, and now we see them attacking the industry super funds, which are the best performing super funds that we have.

But there is another issue to this too when it comes to fairness. It's not just about fairness to workers, which of course is incredibly important—super is wages, and 2.4 million workers are being underpaid every year under the watch of this government—it's also about fair competition with other businesses. These businesses have cheated. They've competed with the business next door and the one down the road by underpaying their staff. If they could operate their business for a lower price than the business down the road, that's probably one of the reasons—because they were stealing from their staff, they were not competing on a level playing field. It's no different from a business that doesn't pay award wages. It's no different from a business which doesn't pay tax. They are competing by cheating. They are competing with legitimate businesses down the road, undercutting the capacity of legitimate businesses to compete and essentially starting that race to the bottom. It is not right that we have up to 20 per cent of businesses cheating by stealing from workers and competing in an unfair way with legitimate businesses that do the right thing.

This amnesty stuff just wouldn't cut it in any other area. We have many businesses deliberately, wilfully, stealing. Some, apparently right back until 1992, are about to get a free pass. They have been stealing from staff that made their businesses work, they have been undercutting legitimate businesses down the road and, in doing that, they have been stealing from us all. Our super scheme is for all of us. It supports our community in retirement and, over time, it reduces the need for taxpayer funded pensions. It leaves many, many people in a more secure financial position in their retirement than they otherwise would be, and that's actually good for all of us. When 20 per cent of businesses rip off $5.6 billion a year from our super scheme, they are actually stealing from us all. This is a really serious matter, and I can't believe we have a government whose approach to it is simply to say, 'Oh, no foul. Never mind. We tried to weaken the penalties but we couldn't get away with that, so we'll just wipe them out altogether.' Will you do it again in three years? Will you do it again in five years? Really? Is that it? Is that the entire response to the theft of $5.6 billion from workers every year. Really? That's it?

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