Jim Chalmers (Rankin, Australian Labor Party, Shadow Special Minister of State (House)) Share this | Link to this | Hansard source

Thanks very much, Mr Speaker, for the opportunity to speak on the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018.

This bill, at its core, is about unpaid super. Unpaid superannuation is wage theft. Businesses not paying their workers the superannuation that they are entitled to by law is an enormous problem in this country. We have had billions of dollars of super not being paid to millions of Australian workers over the last quarter of a century or so, and that's a really big problem. The super guarantee is called the super guarantee for a reason: it's not optional, it's compulsory superannuation. We need to make sure we're doing all we can to ensure super is paid, that people aren't dodging their obligations to their workers, and that workers can save for their retirement and retire with dignity.

What this bill does—or, at least, one part of this bill—is reaffirm what we have come to know about this government. This government is notorious for creating one set of rules for the top end of town and another set of rules for everybody else. What this bill does with its so-called amnesty provision is it protects dodgy bosses who fail to pay superannuation to their employees. It does this by proposing to give a 12-month amnesty to employers who haven't paid compulsory super payments to their staff since 1992. That's more than 25 years of bad behaviour by employers, and those opposite want to sweep that under the rug. They want to pretend it never happened. They want to forgive the wage theft that has gone on in this country when it comes to superannuation. That's more than 25 years, more than a quarter of a century, of bad behaviour that the government proposes to just wipe away.

What makes it especially hard to cop, what makes this proposed legislation even worse, is that under this bill the superannuation guarantee charge will also be tax deductible for employers who've done the wrong thing. In a nutshell, dodgy bosses will get a tax break for doing the wrong thing. Doesn't that say it all about those opposite and their approach in trying to ensure that there's one set of rules for big business and another set of rules for everybody else? If an employee stole from an employer for 25 years, they'd go to jail. Under this Prime Minister, employers who steal entitlements from their workers get a tax deduction. It's quite extraordinary when you think about it along those lines. It's outrageous. It's infuriating. It's shocking in some ways, but, in others, sadly, it's not surprising.

When you take a look at the track record of those opposite, they always side with the top end of town at the expense of those who work and struggle. We're seeing that, as we speak, in the other place, on another bill about tax cuts. They will always side with the top end of town against people who work and struggle. That's why they want to give that $80 billion tax cut to multinationals and the big banks. That's why they want to chop penalty rates in our community. That's why there have been big rises in private health insurance on their watch and rises in the cost of energy and cost of living. They will always prioritise the people with the most over the people with the least.

Australians know that, every step of the way, those opposite have tried to undermine and water down superannuation in this country. They say they support superannuation, but time and time and time again they do what they can to undermine super. On an almost weekly or monthly basis there's some new harebrained idea from the Minister for Revenue and Financial Services and others on that side of the House that seeks to undermine and diminish superannuation, which is one of the greatest public policy achievements in the history of this nation. Other countries look at our superannuation system with envy and seek to replicate what we have achieved here since the early 1990s, while, at the same time, those opposite come up with all sorts of harebrained ideas—dangerous ideas like the amnesty in this legislation—which seek to undermine what we've achieved for Australian workers when it comes to superannuation.

The bill contains four main elements. I want to focus largely on the fourth, as the first three are largely uncontentious. They have some merit in them. They are: allowing 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 so as to avoid breaching the concessional contributions cap; ensuring that the non-arm's-length income rules for super entities apply in situations where a super entity incurs non-arm's-length expenses in gaining or producing income; and amending the total superannuation balance rules to prevent SMSF members being able to use limited recourse borrowing arrangements to circumvent the $1.6 million transfer balance cap and the unused concessional carry-forward rules. Those three parts of the bill are not, in our view, without merit. They have some merit. Our issue is not with those parts of the bill. Our issue is with the amnesty arrangements—the one-off 12-month amnesty for employers who have done the wrong thing—and that's why the member for McMahon moved the amendment to remove that part of the bill so that the rest of it may pass.

One of the reasons we know that this is a sneaky, dodgy attack is because it was done without warning, without consultation. This amnesty just popped up one day. It was a complete surprise to the industry, to the rest of the parliament. It wasn't recommended by the Senate committee's inquiry into superannuation guarantee non-payment. They looked at this in some detail. A lot of good senators, who held up our SG system to the light and looked at unpaid super, did not recommend this measure. It wasn't recommended by the government's own Super Guarantee Cross-Agency Working Group. It wasn't in the budget. Presumably it was a decision taken but not yet announced. There have been no recent parliamentary reports that have recommended this course of action.

When you think about unpaid super, there has been some welcome attention on that in the last little while. When I was in that portfolio in the last parliament, we were always looking for ways to shine a light on unpaid super. It's been pleasing that in this parliament—whether it be with the work of industry super, the work of the tax office, the work of parliamentary committees—this has become an issue that people have become more aware of, and that's a terrific thing. But in all of that work, all of those parliamentary inquiries and the ATO's work and the sector's work, this recommendation has never bobbed up. Nobody has ever said to the revenue minister, 'Hey, why don't you do a 12-month amnesty for employers who haven't been paying super to their workers since 1992?' And the reason it hasn't been recommended is because it's crazy. It is crazy. It's a double standard: it wouldn't be applied to workers in this country, so it shouldn't be applied to employers in this country either. We shouldn't be giving this free pass to dodgy employers who've done the wrong thing.

Usually, when employers don't meet their super guarantee obligations, they can be liable for penalties and charges. This includes the super guarantee charge, which is not tax deductible, and also can include additional penalties of up to 200 per cent of the amount of the SG charge. What this proposed amnesty says is that the SG charge will also be tax deductible for employers, so you get a tax break for doing the wrong thing. It really is quite remarkable, and that's why we're seeking to amend the bill to remove this amnesty from it.

I mentioned that unpaid super is a big and growing problem in this country. Industry super estimates that 2.4 million workers are losing $5.6 billion in payments each year—$5.6 billion robbed from the retirement balances of 2.4 million workers. That is an enormous challenge. No self-respecting parliament can allow that situation to continue, and we certainly shouldn't be giving tax breaks and pats on the back and encouragement to employers who do the wrong thing. A recent ATO audit found that, between 2009 and 2015, employers ripped off workers by almost $17 billion by short-changing them on super—many of them are low-paid workers and many of them are women—and that then turbocharges some of the other inequities in the superannuation system. We already have an adequacy challenge for low-paid workers and for women. Women, who have interrupted work patterns for obvious reasons, already retire with around half as much in their superannuation balances than men. That's ridiculous, and we can't have that continue. And we certainly can't turbocharge that problem by giving a free pass to bosses who don't pay super. It disproportionately impacts on women and it disproportionately impacts on low-paid workers, and we can't encourage that further, which is what the government is proposing to do with this superannuation amnesty. Every Australian worker deserves and is entitled to the superannuation guarantee to be consistent with the laws.

As I said before, an Australian worker hoping for a fair go from this government will be waiting a long time, will be waiting in vain. If the workers of Australia want a fair go, they're going to need a Labor government. They'll have the opportunity for that at the next election, whether it's in two months or 10 months or whenever. Australian workers can hold up our plans for them against the government's plan for them. We will be reminding the Australian people that this is the government that wants to give a tax cut to employers who've done the wrong thing in the superannuation system—and that's before we even get to the $80 billion tax cut for multinationals and the big banks, which will spray around offshore and have no noticeable benefit here in Australia. The Australian people know that this government fought tooth and nail for two years against a banking royal commission. They know that they took their penalty rates away, up to $77 a week. They know that there are all kinds of different ways that this government has been antiworker in this country.

Superannuation is a really proud public policy achievement of this country. It's something we're proud of on this side of the House, having been the architects of superannuation, but, more importantly and more broadly, it's something the whole country should be proud of. To have compulsory superannuation is a public policy triumph for Australia. It has its imperfections, and I mentioned some of them a moment ago. Adequacy for low-paid workers and the gender imbalance are serious challenges that we need to address.

Those opposite say they support superannuation. But their hearts are not in it. We know that their hearts are not in it, because they opposed universal compulsory super in the first place. They consistently voted against increasing the super guarantee above three per cent—they froze it multiple times in their budgets, delaying that super guarantee increase to 12 per cent. They tried to abolish the low-income super contribution scheme. People forget this, but they also tried to weaken the penalties paid by employers who don't pay the right amount of super. We beat them back in the parliament, especially in the other place, and we're proud that we did so. That really shows what they're on about when it comes to superannuation. That's before we even get to the attacks on industry super and all of these other sorts of things that the government have proposed and the other things that have been whispered to journalists around this building that they wanted to make happen, like taking the compulsory out of compulsory super; they wanted to make it voluntary—opt in, opt out. All of these sorts of things give us a sense that they don't believe in super; they never really did and they never really will.

On this side of the House, we're proud to defend and advance the superannuation system. We've been doing it now for a quarter of a century and we'll continue to do it—because we're proud to have put in place a super system which makes it more likely that Australian working people can retire with dignity, that they can save for their own retirement and that that money can be wisely invested so that, after a lifetime of work, they can have the dignity, living standards and security that Australians need and deserve.

As part of our commitment to super, we cannot support giving employers who've ripped off their workers a penalty holiday and a tax deduction, like those opposite are proposing to do in this bill. The member for McMahon moved his amendments because we want to see this amnesty taken out of the bill. The other three bits are not, in our view, offensive; there's some merit to them and we would support those. But we can never support something which turbocharges a problem that we already have in this country, which is the wage theft associated with unpaid superannuation. We cannot continue to have billions of dollars not paid to millions of Australian workers, when that is the superannuation that they need and deserve to save for a dignified retirement.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

This is becoming more and more of a pattern of this government: make the bill wide enough and slot things into it which will be unconscionable in the full knowledge that it becomes unacceptable. There are many decent things in this bill, things that should be supported by both sides of the House, but then this government puts into the bill a superannuation guarantee amnesty, a holiday for people who break the law in relation to compulsory superannuation. They want to slide this through and thought that everyone here would simply say, 'Well, the overall benefits—yeah, we'll just go along with that.'

I was part of the trade union movement that fought long to get compulsory superannuation in this country. As Bill Kelty used to say, it was probably the single biggest thing that the trade union movement has been able to establish in the last 50-odd years or perhaps even longer. Having proper funds established for people's retirement so they can retire with dignity is something that is right, and it is just, and it was certainly worthwhile for us to fight for as a principle all those years ago.

I will just remind the House that when the first notion of compulsory superannuation came in, it was only supported by one side of this House. It was supported by the Labor government. Each of those on the other side voted against compulsory superannuation. They voted against it on the basis that people had superannuation in those days. People who were professionals and could construct their own superannuation and retirement funds, such as doctors and lawyers and others, were already covered by their own superannuation requirements; and it was indeed fortunate for many Commonwealth and state public servants that they also had super. But for those of us who grew up in working-class backgrounds, superannuation was something we didn't know about. When you got to retirement age, you went onto the age pension. That was a suitable retirement that those opposite thought was there for the masses—you could go onto the pension. We thought: life has to be better than that. People putting in year after year, working and making a contribution, not just in their workplace but effectively to this country, deserve better than simply being told they can all just go onto the age pension and that's their lot in life post employment.

Superannuation is a touchstone issue for us, something that we believe so passionately in. Paul Keating was right: this needs to be at a level that will give people a decent lifestyle in retirement. Yes, it is a form of saving. But when the first round of superannuation came in at three per cent, can I remind everybody here, that was a direct trade-off from wages. It was called a 'productivity increase', which the then Industrial Relations Commission determined. That was traded off, for all Australian workers, for the benefit of superannuation. That's where the three per cent came from. That's how it all started. Those who don't think workers are entitled to it says more about them than it does about Australian workers.

Today we are here to talk to a piece of legislation in which the government want to insert a provision that allows people to hide from their obligations to pay employees their compulsory superannuation. Imagine if they gave the same notion of being able to hide from paying employees their proper wages. We would call that wage theft. Given that superannuation is an integral part of an employment package these days, whether it be wages, superannuation or other conditions, this piece of legislation that those opposite are bringing into the parliament today is basically saying: 'We'll give you a holiday. If you haven't made the appropriate contribution to your workers over the past 25 years, we'll just wipe the slate clean, provided you make the difference up, provided you pay it. But we'll also give you a tax deduction for paying it—not a penalty, not a charge, not a jail term, which you probably would encounter if you didn't pay your employees properly for 25 years, but a tax deduction.' So for all those in the gallery, if this piece of legislation gets through, you will have the honour of paying a tax deduction for employers who have broken their obligation to pay workers their appropriate contribution for superannuation going back 25 years. It just beggars belief that the government would want to put this amnesty, or this holiday from payments, into a piece of legislation that incorporates elements of reasonable merit—merit to the extent that it would be supported on both sides of this House.

We want people to obey laws. We have penalties. Sure, people in ordinary life know that the police will detain you when you're breaking the law, because there is a penalty. There are obligations on people. We set strong obligations on people to do the right thing and strong deterrents to stop people doing the wrong thing. People will incur penalties. If you don't pay your tax on time, the Australian Taxation Office will fine you. Banks have been fining people day in, day out. That's one of the reasons we wanted a royal commission. Banks were willy-nilly fining people for all sorts of things. But the whole idea of getting people to comply with a scheme of arrangements is to do the right thing; therefore, we do have penalties attached to them, if you willingly choose not to do the right thing.

This bill is just a display of this government's readiness to support dodgy employers who willingly and very concertedly have decided to cut people's conditions short by not meeting their obligations in terms of their superannuation contributions. These are dodgy employers. Let's face it, any reputable employer out there is doing the right thing. There are penalties already imposed on employers who do not do the right thing. For instance, they can be required to not only pay their superannuation to the employee but pay at a double rate; that's a penalty imposed by the Australian Taxation Office. But this now undermines all that penalty regime.

We on this side understand the superannuation guarantee system. We understand it thoroughly because we are the party that brought the superannuation guarantee to this nation. Voluntary superannuation contributions and a means-tested, government-funded age pension join together to form an integral part of dignified retirement in this country. As I said, we understand superannuation; we brought it here. They oppose superannuation at the outset.

Dealing with the non-payment of superannuation has got to be a priority for everybody. It has always been a priority for Labor. We want to ensure that our superannuation system is fair, sustainable, robust. Above all, it should serve the main and intended outcome that we want for Australian workers, and that is being able to retire with dignity. That's why penalties were imposed on employers who do the wrong thing. Under current law, an employer who does not meet their superannuation guarantee contributions can be held liable for penalties and charges. These include superannuation charges that are not tax deductible and additional penalties that are up to 200 per cent—double—the unpaid amount. That should be an incentive for an employer to do the right thing. If you don't, you are going to be penalised. The bill before us today seeks to change that by introducing a 12-month amnesty.

If this legislation gets through, employers will have a full 12 months to go to the authorities and declare: 'Look, I have done the wrong thing for the last 25 years. Very, very sorry. I'll pay what I owe my employees. I won't double it or pay them a special commission. I'll just pay what I owe them. When I do, I understand that that's going to be tax deductible.' If they put that argument to the government after this legislation gets through, if it does, those opposite will be nodding their heads and saying, 'Yeah, that's what we meant by it.' That's why I say to the people in the gallery: through this piece of legislation, which effectively rewards dodgy employers who do the wrong thing, you will have the honour of making up that difference.

Just think about it. If an employer didn't make the right payment to its employees over 25 years, how much is that going to cost an employee in their retirement? Imagine: you're turning 65, you think you're about to retire—although they want you to work until you're 70, but we'll leave that aside—and you find out that you don't have sufficient funds in your account. You get your accountant, if you can afford one at that stage—well, they can—to go back and have a look at this and you work out, 'Oh, look, they've short-changed me!' You're not going to get much support out of that mob over there, because they've just rewarded the very person who has short-changed you over that whole period.

And imagine—and I know no-one up here would—if, over the last 25 years, you'd been stealing from your employer. They didn't find out, and it went on for 25 years. Then all of a sudden they had a new accountant brought into the organisation and found out that you had been systematically knocking off money from the company over 25 years. The police would be called. You'd probably be charged immediately and you would be taken to court. And, over an issue like that, it's highly likely you'd be doing jail time.

Have a look at those two different scenarios. The government is going to give special treatment to a dodgy employer who's prepared to take money from an employee, or not make the appropriate contribution, which is basically the same thing as wage theft. But, if you're an employee caught knocking off material or money from an employer, you will be subject to the full weight of the law. If you think that's hypocritical, so do we, and that's why this piece of legislation cannot be supported and why I support the amendments put forward by the member for McMahon.

We need to have a system in this country where everyone understands their obligation, and, to do that, maybe sometimes we've got to make things clearer to people. But we should not be giving a holiday to people who wilfully do the wrong thing, in this case by exploiting their employees. It is such a ridiculous situation that the government would choose to bring this part of the proposal through with a bill that, as I say, has many aspects of merit. This defaces what that would stand for, and it also shows where this government sits in relation to employers and employees in this country. (Time expired)

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 and on the amendment moved by the member for McMahon. As a member of this House who represents one of the oldest electorates in the country, an electorate with a demographic of many people over the age of 65, I know how important it is, for contributions towards superannuation, to ensure that there is a system put in place to look after Australian workers after they've stopped work and retired.

We on this side of the House, the Labor Party, are very proud to be the party that built Australia's modern superannuation system. We know that back in the eighties, working together with the unions and through the accord, the Hawke and Keating governments set about expanding the superannuation system. They transformed a system that had previously only served public servants and a small group of professionals in Australia. Public sector workers were about the only group of people that had superannuation and investments for their retirement, leaving the vast majority of blue-collar workers—factory workers, cleaners, people in low-paid jobs—without any superannuation or savings for their retirement. The transformed superannuation system ensured that millions of Australian workers could enjoy a comfortable standard of living after their working life in their retirement.

Through that accord with the Hawke and Keating governments back in the eighties, workers gave up wage increases in return for super contributions. What that means is that superannuation is not a gift from the employer or the government; it is part of a wage package. It is money that's put into a savings account for workers' retirement, for the work that they've done. Let's make that clear: superannuation is not a gift. It's not something extra on top of your pay. It's part of your pay that goes into a savings account for your retirement. This is the way that superannuation came to be in Australia. Now there are trillions of dollars in deferred wages and earnings that have built up through our super system that are being used for infrastructure and a whole range of other investments in Australia. So I'm very proud, as all the members on this side are, of Labor's commitment to superannuation, which has seen millions of older Australians retiring with an income far in excess of the value of the aged pension and maintaining a relatively high quality of life.

In government, we not only increased the superannuation; we made it easier for lost super accounts to be reunited with the account holder. Our record on this side of the House is in stark contrast to that of those opposite. We know that Labor created the superannuation guarantee and that, back then, the coalition opposition opposed it. We increased the super guarantee to nine per cent, and the coalition again opposed it. It provided super support to low-income earners, and again they sought to abolish it. We also increased the super guarantee from nine per cent to 12 per cent when we were in government. Again, the coalition opposed it, with the increase to 12 per cent being pushed out to at least 2025, meaning workers in Australia lost thousands of dollars.

Those members opposite, and this government in particular, have always been ideologically opposed to superannuation, particularly industry super, because it was hard fought for by the unions. They oppose it on an ideological basis, not from some sort of logic, which is very wrong. They oppose it because it was hard fought for by the unions and won by the labour movement in this nation. We know that they oppose industry funds, despite reports that have found that a lot of the industry funds, which have people from unions and businesses as well as independents on their boards, dramatically outperform the retail funds. Every year we look at the results of superannuation companies, and we find that industry funds are continually outperforming the retail funds. Even with those records, which provide a stark contrast, this government opposes industry funds.

I, like other members on this side of the House, am also concerned about wage theft. We heard the previous member speak about wage theft. Decent hardworking Australians deserve every dollar of their wages and their super. Let me remind you, as I said earlier, that superannuation is not a gift; it's part of your wages. Therefore, if an employer is not paying the contributions into your super fund, it is wage theft. There can be no doubt that deliberately underpaying the wages and superannuation of hardworking people is nothing less than theft.

We've heard countless examples in recent years of franchises, cafes, restaurants—all sorts of industries—underpaying workers on a grand scale. Usually, it is young people and newly arrived migrants—people who perhaps aren't 100 per cent sure of the system. Basically, a lot of these unscrupulous, dodgy bosses consider it to be their own gift to be paid when they feel like it. This is wrong. It's part of a worker's wages. As I said, young and new Australians in particular have been exploited and targeted, and, at its worst, this is disgraceful behaviour and should have no place in our society.

The minister outlined in her second reading contribution that, according to the Australian tax office, around $2.85 billion in super went unpaid in the year of 2014-15. That's $2.85 billion. We call it super but in fact it's wages. People worked and were not paid; that's what it is. And, as I said, it's not a gift from the employer. It's not a gift from government; it's not something extra on top of your wages; it is part of your wages. That's $2.85 billion that was stolen from the pockets of hardworking Australians.

Over the 25 years since the superannuation charge was introduced under the Keating government, that underpayment of super by dodgy bosses is tens of billions of dollars. And it is tens of billions of dollars of additional pressure that has unnecessarily been put on taxpayers and the pension system by bosses who decide, for whatever reason, to line their pockets or just don't feel like paying it. That's the only reason. What that means is that each and every one of us is paying for it. It is theft from every Australian in this nation, because, if the worker's superannuation is not at a level where they can live comfortably, then they will go on the age pension, and we pay for that through our taxes. So, when they don't pay that superannuation, it's not just theft from that particular worker; it's actually thieving from the pockets of every Australian in this nation.

The minister talks about giving the Australian tax office tools that they need. But we know that this government continues to make it harder for regulators such as the ATO to go after those who rip off hardworking Australians. We know they've cut thousands of jobs from the Public Service and thousands of jobs from the ATO since they came to office in 2013. They've cut $26 million from ASIC at a time when, through the royal commission that's currently being conducted, we've seen rip-offs and rorts. Those opposite had to be dragged kicking and screaming to the calling of that particular royal commission.

They have frozen funding for the Fair Work Ombudsman in the budget that was announced a few weeks ago. The Fair Work Ombudsman is the government body that workers can turn to when they've got nowhere else to seek help, and they've frozen the funding to it. They've cut and outsourced Centrelink support staff and they've overseen cuts to penalty rates. We saw that the commission made a finding to cut penalty rates. We had a bill in this place that they could have supported to overturn that, but they didn't, therefore contributing to penalty rate cuts for some of the most vulnerable and lowest-paid workers in this nation.

When I hear those opposite talking about supporting workers, it reminds me of the time when a former Prime Minister, Mr John Howard, said, 'Working families in Australia have never been better off.' That was at the same time that he was introducing Work Choices, which saw thousands of dollars being ripped out of workers' wages through AWAs. Give us a break when they say these things!

This bill also proposes another nasty. It gives a 12-month amnesty for the nonpayment of super, and it goes back all the way to 1992. It is an amnesty for stealing money out of workers' pockets since 1992. Most people would go to jail if they stole money from someone else—and this is going to go all the way back to the nineties, and it could be worth three to 10 times more if you add interest on the money that's owed to these people. So not only do dodgy bosses get an amnesty from penalties; they get a tax deduction as well on top of it. What a joke! And look at how they treat others. It should be a criminal offence. Here in Australia, we're not asking for much. We're asking for a decent wage for a decent day's work. That's always been the motto in this country, and we're starting to see it go down the gurgler.

Why don't the government give an amnesty to Centrelink recipients who perhaps have put in some wrong documentation or have been given wrong information, as has been the case at Centrelink? Give them an amnesty. These people are experiencing very hard times. You don't go to Centrelink because you've got money coming out of your ears; you go to Centrelink because you are having a hard time. Sometimes mistakes are made. Sometimes Centrelink makes mistakes and then Centrelink demands that you pay back a debt. But there is no amnesty for those people. All you have to do is look at the robo-debt debacle last year, where over 20,000 people—mainly pensioners—were sent notices from Centrelink demanding that they pay overdue debts when there was no overdue debt. Investigations through the minister's office found that 20,000 were sent notices and those notices were wrong. They didn't give those people an amnesty—and many did pay, even though they shouldn't have had to. This government set about trying to enforce debts through that Centrelink system when in fact those debts simply did not exist. The government finally admitted that, last year, 20,000 people were wrongly given notices and told they owed money to Centrelink—something we on this side helped to expose.

You can see the stark difference with this government. When it comes to supporting workers or low-income people in this nation, they have absolutely no interest. On the one hand, they come down with the hard hand of the law when it comes to Centrelink recipients and, on the other hand, they give an amnesty of 25 years to people who have stolen money from other Australians.

The minister talks about this being a mechanism for small and medium businesses to come forward and make good—that's the argument put forward for this amnesty—but it doesn't appear that this amnesty is limited to small and medium businesses. This will also cover many multinational companies that have done the wrong thing and it will cover many big businesses and big companies that pay no tax in Australia—companies that have set up their shelf companies overseas, pay no tax and also rip money off workers. The government are going to give them an amnesty as well. When the minister says that this is a mechanism for small and medium businesses, she doesn't tell us that the big businesses that have all the accountants in place, and most probably know that they are doing the wrong thing, will get an amnesty.

Only weeks ago we saw that ISS Facility Services Australia—part of the multinational ISS Group—was issued with a penalty of $132,217 by the Federal Court for underpayment of wages. ISS employ 13,000 staff across Australia. It's not exactly a small business or medium business. A penalty of $132,000 for a company like that is peanuts. Research by Industry Super Australia found that around 2.76 million, or almost one-third of Australian workers, eligible for super are missing out on some or all of their entitlements. That is a massive amount. This is theft on a large scale, not bits and pieces happening occasionally here and there; this is 2.76 million Australians who are owed money or have not had money put into their super funds.

It sickens me and all of us on this side of the House that some dodgy bosses out there have been getting a competitive advantage over good bosses—the majority who do the right thing—and now they are going to get an amnesty. This affects law-abiding businesses that are doing the right thing, as the ones who are underpaying are the ones who are going to benefit out of this. I believe that we are better than this, and that's why I'll be supporting the amendment moved by Labor.

Madeleine King (Brand, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to follow my colleague, the member for Hindmarsh, in speaking today on the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 and also the amendment moved by the member for McMahon. As you well know, Mr Deputy Speaker Mitchell, and as all of us on this side of the House realise, superannuation is very important. It is very important to us as the Labor Party and it is very important to the labour movement across this nation.

Labor created Australia's superannuation system and we will always work to defend it and the workers who benefit from having their employers pay into the system for their retirement. We believe in it. We really believe in superannuation. Let's remember that the Liberal and National parties opposed compulsory superannuation, just like they oppose every great social reform in this country. Each one of them voted against compulsory superannuation when it was introduced into this parliament. Ultimately, and luckily for this country, they lost that argument and the Keating Labor government legislated for compulsory superannuation to the greater benefit of workers in this country.

The bill includes a number of measures and they have been gone through in much detail by others. The most disappointing, upsetting and destructive measure we see in this bill is the so-called one-off 12-month superannuation guarantee amnesty. The government have put forward a measure that proposes a superannuation guarantee amnesty for employers who have done the wrong thing by their workers. The proposal the government have put forward for this supposed one-off 12-month superannuation amnesty will be given to employers who have not complied with their legal obligations to pay superannuation to employees. The idea, they have said in this place, is that this will encourage those employers who have not paid superannuation to their employees to now get their act together and do so. Employees will be 'encouraged' to meet their obligations and this will lead to employees being paid superannuation. Encouraged? Is this government really serious?

There is something fundamentally wrong with this way of thinking and this proposal. This government thinks proposing an amnesty will encourage employers to pay employees their hard earned superannuation, their actual wages. It feels ridiculous to have to point out in this place that the superannuation guarantee is the law. Employers have to pay it. There is no option. There is no need for encouragement. It is just the law. Employers have to pay their employees their proper wages. The proposal of this government does not address what is a despicable wrong. Superannuation is part of every worker's conditions of employment. It's not an option, just like workplace safety is no longer an option in workplaces around this country. Not paying employees super in the first place is nothing less than wage theft. It is wrong, it is immoral and it needs to be stamped out as the unacceptable practice that it is.

I'm always reluctant to bring matters of religion into this place but it is important to note that Pope Francis, an international leader of millions of people around the globe, has taken to task employers who do not pay employees what is legitimately owed to them. The Holy Father called the practice of wage theft a 'mortal sin'. I'm sure the millions of Australian workers who have been ripped off in this country feel exactly the same way. An employee's superannuation, once earned, does not belong to their employer; once earned, it belongs to the employee. Again, not paying the employee their super is theft pure and simple.

It is perplexing to think that dodgy employers are being given the chance by this government to get away with stealing from their employees. Industry Super Australia previously estimated that at least 2.4 million Australian workers were victims of stolen superannuation in one year alone. More than 2.4 million ordinary working people who went to work, who fulfilled their end of the work bargain, were then taken advantage of and had their money stolen from them by the dodgy employers who have engaged in wage theft.

I'm pretty sure we all know someone who has not had their super paid and has been trying to track it down. I know there are some young people in my family who have been ripped off by employers. They are often young people who work in cafes and the hospitality industry. They do change jobs—that is the nature of being young and moving around in that environment while you are studying. They are the people who have been attacked by greedy employers who literally fail to meet their obligations under the law.

Another way of looking at the problem is that a whopping 30 per cent of employees are missing out on their superannuation earnings. Industry Super Australia reported that about $5. 6 billion per year in unpaid super is missing from workers' retirement savings across this country. This is massive problem and it is equal to those workers losing $2,000 per year, which should be going into their retirement savings. There are long-term consequences for these workers and there are long-term consequences for the country.

Superannuation is one of the three pillars of retirement income in this country, alongside the aged pension and personal savings. By being robbed of their super, people have been robbed of the possibility of a comfortable retirement. Each time a worker has an amount of super stolen from them, they are missing out on the compounding interest returns on that amount. They have been robbed of a chance of self-reliance in retirement. What this means, of course, as my colleague the member for Hindmarsh pointed out earlier, is that this is putting added pressures onto the age pension system. Without the security of a funded superannuation pension, people will have to turn to the age pension to fund a retirement that might not offer the standard of living they could have otherwise reasonably expected. Future governments will have to fund additional age pension amounts because of the bad behaviour of some employers.

But why is it that this government feels the need to excuse this behaviour? Why is it that, instead of protecting the victims of this behaviour, the perpetrators are being given a tax break? Why are those employers and businesses who do the wrong thing not being held to account for their actions? If an employee were stealing from their employer, they would not be afforded an amnesty. No, they would, rightly, have to face the consequences of their crime. But here we have a government who is happily espousing one rule for badly behaving businesses and another rule for everybody else. Instead, this amendment will provide a 12-month amnesty for employers who have stolen superannuation and will give them incentives and tax deductions to encourage them to repay the stolen amounts.

The proposed new measures of this government will allow employers to claim tax deductions for payments of the superannuation guarantee charge or contributions made during the amnesty to offset the superannuation guarantee charge. In plain language, this means that dodgy employers will get a tax break for doing the wrong thing. Is there no end to the favours this rotten government will dish out to employers that break the law? We have not only a $17 billion tax break for the banks, which have regularly flouted the law, including enabling money laundering on an extraordinary scale, but also this super guarantee legislation, which will cancel the penalties and fees that would otherwise have applied for noncompliance.

All employers who have not paid super to their employees for 25 years are going to get a penalty holiday. In effect, those who have done the wrong thing will not get punished for their wrong actions and will be allowed to get off scot-free. The incentive for those employers and businesses who have done the right thing has become completely null and void. In this discussion we should consider the employers that do the right thing—and most employers do the right thing. Like most people in this country, business owners meet the right and proper obligations and responsibilities within the community and under the law. Not only is wage theft by not paying super bad for employees themselves; it is cheating other employers that obey the law. Cheats are getting themselves an unfair advantage over other employers and other businesses, and that is manifestly unfair and wrong.

It is not fair, but we know that fairness is not something that this government is particularly worried about, especially when it comes to the workers of this country. We've seen this in the government's refusal to protect the penalty rates of over 700,000 workers of the country, 10,000 of which live in my electorate of Brand, who, through no fault of their own, had their pay slashed when penalty rates were cut. Instead of sticking up for low-paid workers and instead of protecting their pay and conditions, this mean and tricky government has failed to protect workers and goes above and beyond to protect businesses doing the wrong thing. Let's not forget how long they protected the banks from the royal commission. Prime Minister Turnbull really can't help giving more and more to businesses—massive corporate tax handouts, slashed penalty rates and zero consequences for not paying workers' entitlements. What a shame that workers are not held in the same privileged esteem in which the Prime Minister holds big businesses.

As you've heard, this amnesty was announced without any consultation. It was not recommended by the Senate Economics References Committee's inquiry into superannuation guarantee nonpayment, and I would say that that's because the committee, full of quite intelligent people, did not think that it was a good idea. Nor was it recommended by the government's own Superannuation Guarantee Cross-Agency Working Group, and, again, I would say that that's probably because the group did not think that it was a good idea. The measure really has come completely out of left field. It's not mentioned in the budget and there are no recent parliamentary reports into unpaid super guarantee that have recommended this amnesty measure and the attached tax breaks. Only a government as out of touch as Malcolm Turnbull's government would reward dodgy businesses who have been robbing workers for 25 years. Such employers are crooks and they should be treated as such.

While we're on the matter, I reflect on the comments of the member for Hindmarsh, who pointed out the importance of industry super funds in Australia. Again, this government has no hesitation in attacking industry super funds and the superannuation of workers whenever it gets the chance. We should remind ourselves in this place that industry super funds are the best-performing super funds in the country. They produce the best results for workers, who pay their superannuation payments into super funds, and we should respect the management of those super funds and what they do for workers right across this country.

Instead, we are seeing constant attacks through various committees of this parliament; they use reviews of APRA and other entities to set up a position where they can hack into excellent institutions that have for decades provided the best results for working men and women who choose to join these super funds and get the best returns for their savings through superannuation which will provide better for them long into their retirement. It's a shame the government chooses not to work with these industry super funds and chooses instead to fight tooth and nail against sensible, well-managed super funds that deliver for the workers of Australia.

Instead of protecting the superannuation guarantee and following the pretty sensible notion of extending the amount that would go into the superannuation guarantee, this government of course chooses to attack it. It lets bad apples get off scot-free and get a tax incentive for not doing the right thing, for breaking the law. Saying it's a matter of encouragement is just absurd. When do any of us get the option to be encouraged to obey the law? It's not fair on other business that do the right thing. It's certainly not fair on employees—many of whom are women in low-paid non-permanent work—to not get paid their actual work entitlements which are captured by the superannuation guarantee.

I pay tribute to those in this place who have come before us, especially on this side—the Labor representatives who have fought hard to develop this important social policy of superannuation. They introduced it and fought against the Liberal and National parties, which resisted every step of the way superannuation for the benefit of workers' retirements in this country. Now they say they're into it; but then we see legislation like this, which gives law breakers a 25-year penalty holiday and a free pass to continue to break the law. What kind of encouragement is that, other than sending a message to dodgy employers around the country to just forget it? 'What do I care about the employees? I'm going to have an unfair advantage over other businesses. I'm not going to pay my workers their correct entitlement. They might come to work and do their work but I'm not going to hold up my end of the bargain and pay them properly.'

It's a crying shame that this is what this government stands for, but we see it time and time again in this House. I only hope they find their moral compass at some point in the future and start to think about the workers in their electorates that are being continually ripped off by big, small and medium enterprises that think it's a fair thing to be dodgy, to break the law and to not abide by the great social contract that we have in this country now, thanks to Labor, which is the superannuation savings which will serve workers well into their retirements. I thank the House.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Assistant Minister for Cyber Security and Defence) Share this | Link to this | Hansard source

Up until the mid-1980s less than 40 per cent of the working population had superannuation. That figure was even less for blue-collar workers and women; for them it was only around 25 per cent. This all changed in 1991 when Labor under Paul Keating, our great former Prime Minister and Treasurer, introduced the superannuation guarantee, a compulsory system of superannuation for Australian employees.

The superannuation guarantee is exactly what it says it is. It's a guarantee that superannuation will be paid to workers. It's not optional. It is a guarantee. It is not an optional extra. When it was introduced, it boosted coverage to 80 per cent of employees and, over the following decade, the coverage increased to 91 per cent of Australian workers.

Under current arrangements, employers are required to pay superannuation to employees earning $450 per month before tax and working more than 30 hours per week in a full-time, part-time or casual capacity. This requirement stands, regardless of whether an employee is under the age of 18.

It is also important to note employers' obligations as to workers over the age of 70. This is especially important, given this government's intent to change the retirement age. If employees aged over 70 pass a work test and work more than 40 hours in a 30-day period, their employers can still pay contributions.

It's pretty clear what your requirements are as an employer, which is why the figures provided by Industry Super Australia about the number of employers who are failing to pay their staff's superannuation are breathtaking. They're breathtaking and they're appalling. I reiterate: the word is 'guarantee', not 'optional extra'. The sheer amount that unscrupulous employers are ripping off Australian workers is absolutely unbelievable, and the Senate Economics References Committee agreed. According to the committee report:

… analysis by Industry Super Australia … indicates that employers failed to pay an aggregate amount of $5.6 billion in SG—

superannuation 'guarantee'—

contributions in 2013-14.

This amount represents 2.76 million people affected across Australia, with an average amount of over $2,000 lost per person in a single year. But the ATO disputed the amount put forward by Industry Super Australia, without actually being able to put forward its own figures.

There is a superannuation guarantee gap—and again I underscore that word 'guarantee'. The fact that employers are ripping off their workers is not in dispute. In fact, the issue has been raised in numerous reviews, dating back to 2001. In April 2001, the Senate Select Committee on Superannuation and Financial Services tabled their report Enforcement of the superannuation guarantee charge. This is the charge applied to employers who don't comply with their obligations to pay workers' super on time or pay the right amount. Even this report, 16 years earlier than the most recent Senate committee report into the superannuation guarantee, noted the same concerns as were raised in last year's inquiry: the ATO's 'apparent lack of activity in pursuing defaulting employers and addressing individual complaints'; the complexity of the superannuation guarantee system; and low levels of education among employers and employees about their superannuation rights and responsibilities—and I will come to that later.

A report released by the Inspector-General of Taxation in 2010 noted the same ongoing complaints about unpaid superannuation entitlements and frustrations of employees recovering unpaid amounts. In 2015, an ANAO report of an audit of the ATO's work in promoting compliance with the superannuation guarantee obligations showed that there was still work to be done—that the ATO could benefit from better targeting of compliance activities and could gain a greater understanding of the level of noncompliance with obligations across industry sectors and types of employers.

In 2016, there was another review—how many reviews are we up to now?—by the Inspector-General of Taxation into the ATO's compliance activities on the superannuation guarantee. But this report has not been released by the minister—and I am sure we can all guess why. Fast forward to the Senate Economics References Committee report from 2017, and not a lot has changed.

These warning bells have been ringing for years. We are going back to 2001, if not before. These warning bells have been ringing for years about the lack of compliance on the superannuation guarantee, and we are hearing them again from this Senate economics report. But enough is enough. There are already deterrents in place in the legislation. So, yes, these warning bells have been ringing about lack of compliance, but there are already systems in place to ensure that this is a superannuation guarantee and not an optional extra for employees. There are already deterrents in place in the legislation. The superannuation guarantee charge means that defaulting employers incur significant penalties and administration fees. And yet there is still a gap in the superannuation of a significant number of Australian workers, and some of our most vulnerable workers are not being paid. A problem that still hasn't been addressed, 26 years on from the introduction of universal compulsory superannuation, is knowing which industries and which workers are most at risk of unpaid super. There is a significant data gap here and, to ensure this legislation that we're discussing today is effective, we need to know where the gaps are and who is falling through those gaps.

Dealing with underpayment of the superannuation guarantee wage theft—that's what it is; it is wage theft. It's not an, 'Oops, I forgot.' It's a guarantee; it's not an optional extra. Dealing with underpayment of the superannuation guarantee wage theft is a priority for Labor, which is why the 12-month amnesty this bill proposes is problematic. The bill provides a one-off 12-month amnesty to allow employers to claim tax deductions for payments of the superannuation guarantee charge or contribution made during the amnesty period to offset the charge, and to have the penalties and fees that may otherwise apply in relation to historical superannuation non-compliance reduced to nil. It's an amnesty for forgetting. It's an amnesty for not taking their responsibility to their employees seriously, for treating the guarantee as an optional extra.

The amnesty would cover non-compliance for the period from 1 July 1992 to 31 March 2018. That's a lot of, 'Oops'. It's a lot of, 'Oops, I forgot to pay superannuation for my workers.' That's a lot of wage theft. The minister considers this amnesty period to be a 'carrot' to address historical non-compliance. Let's take a look at the timeframe—1 July 1992 to 31 March 2018—a little more closely. That is giving a free pass to employers who have ripped off their staff since the superannuation guarantee was introduced. Can you believe it? That's a lot of, 'I forgot to pay super.' That's a lot of, 'I forgot to actually treat this seriously.' That's a lot of, 'I forgot to treat this as a guarantee.' That's a lot of, 'Oops, my dog ate my homework.' Under this bill, employers who have ripped off staff—and that's what they have done, they have ripped off staff; this is wage theft—across the past 26 years will get a free pass. What part of that is okay? Twenty-six years of ripping off workers, of thieving their wages, and the employers are going to get a free pass. It's just breathtaking that people tend to think that that's okay.

In the same breath, the minister also talks about the 12-month amnesty having a 'stick'. Right. It will be interesting to see how effective that stick is given the fact that for more than 26 years people haven't taken the superannuation guarantee seriously. So we've got this stick approach after the carrot. The 'stick' is: if employers who could come forward during the amnesty period choose not to and are subsequently caught by the ATO, they could be subject to a 50 per cent penalty on top of the other penalties and charges associated with late payment of the superannuation guarantee. This particular measure needs further consultation. There are views from COSBOA, who support the amnesty, and there are views from the ACTU, who are against it, saying penalties should be increased and employers shouldn't be getting off scot-free. But what this bill fails to consider is the impact that underpayment of the superannuation guarantee has on some of our most vulnerable workers. Non-payment of superannuation impacts on total disability payments and income protection insurance payments that are attached to superannuation. Those most at risk are those on lower to middle incomes—the very people who are most reliant on compulsory superannuation contributions, and less able to make voluntary contributions to supplement their retirement savings.

According to the Association of Superannuation Funds of Australia, the average Australian woman retires with around half the super balance of the average man. Women live longer than men. Women earn less than men. These are all stories we know; these are all facts we know. Women take more time out of the workforce and, ultimately, retire with less superannuation. Women still bear the majority of unpaid caring and household responsibilities, and significant and increasing numbers of Australian women are ending their working lives facing financial hardship, facing poverty and, in some cases, even facing homelessness—and that is increasing. The Equality Rights Alliance did a study a number of years ago about the fact that we are facing what they called a tsunami of homelessness of older women in the next decade. They are women who have worked all their lives, are on moderate wages and can't afford to buy a home, so they are in the private rental market. They're usually divorced, they usually have brought up kids on their own and they have very little super. We're talking about $40,000 or $50,000 of superannuation. Their retirements look very bleak. I know because I speak to these women whenever I make a speech on financial literacy and superannuation.

Whenever I make a speech on those two issues, at the end of the session women who are invariably in their mid-50s to mid-60s come up to me in tears—always in tears—saying, 'You've just told my story. I am absolutely terrified about my retirement. I am absolutely terrified about ageing. I am absolutely terrified about my future. I have very little super. I will need to go onto the age pension. I'm in the private rental market.' They're earning too much to get social housing, they have next to zero in savings and their future looks incredibly bleak. Imagine staring down that reality at the end of your working life when you've brought up kids on your own, you've done it tough financially, you've tried as hard as possible to get that superannuation together and make those contributions to superannuation and you're struggling to pay rent in the private market. Imagine what a future looks like for a woman who has gone through all that. She has worked all her life and brought up her kids on her own, but here she is, staring down a future of being on the age pension, having very little in her super account and being in the private rental market. It doesn't look that rosy. It is very bleak, which is why these women are invariably in tears and frightened out of their wits. They are absolutely frightened about their futures. Addressing those women and the bleak futures that they have is another issue. The situation, like so much related to homelessness, is quite complex.

The message I also convey when I'm speaking to these women is that a man is not a financial plan. Women, sisters—I encourage you to grip your finances and to get an understanding about what's going on in your bank account and in your superannuation account. Yes, it's complex. Superannuation is mind-bogglingly complex. When I set up my small business, I moved off the Public Service super and had to look for my own super supplier. I ended up in an industry fund because Money magazine showcased the fact that industry funds were the best-performing funds in Australia, so that's where my money went. Through that process, I gained a greater understanding of superannuation and how it worked and took charge of the investment mix. I encourage women of Australia: a man is not a financial plan. Please, get an understanding of your bank account; get an understanding of your superannuation account. A lot of women say to me, 'It's all too hard.' Retirement with no money in the bank while paying for private rental on the age pension is very hard. That's the future that you could potentially face if you don't deal with this issue and get literate and remember that a man is not a financial plan.

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

I will back up the previous speaker on that. When I first started working as a parliamentarian, we were receiving nine per cent super—not on the old super scheme but on the fairly regular super scheme—and a couple of years later I noticed there was quite a bit missing. They'd been paying another Julie Owens somewhere else. It's amazing how, even when you know your super is being paid, you have to pay attention to it.

Michael Keenan (Stirling, Liberal Party, Minister Assisting the Prime Minister for Digital Transformation) Share this | Link to this | Hansard source

That's pretty bad.

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

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

If you don't pay your tax and you don't pay your tax for a while, you don't have the tax office coming to you saying, 'We'll give you a bit of an amnesty. It's alright. You probably made a bit of a mistake.' You get letters demanding that you pay. You often get told, 'You've got to pay this amount with interest.' And if the rules change around you, as many people will know, you can sometimes get a letter from the tax office saying, 'You didn't pay enough tax in previous years, so pay a bit more'—and you have to pay it. If a business doesn't pay its suppliers and doesn't do so for quite a few years, they don't get an amnesty and get told, 'No, that's alright. We didn't need you to pay us for a few years.' No, you very often get taken to court if you don't pay your bills and you don't pay your legal obligations when you're contracted with someone to pay something. But it seems, according to this Liberal government, to be something completely different when it comes to wages and when it comes to wages forgone in the form of superannuation. What this government is saying with this bill is that it is okay if employers have chosen not to pay money that will go towards people's retirement: 'We'll treat you completely differently from every other area of law; you don't even get a slap over the wrist. You get a free pass.'

We know increasingly, because of the work that's being done by unions and investigative reporters, that wage theft is becoming a massive problem in this country. There are various ways that employers do it. Sometimes it's dodgy bookkeeping where there are effectively two sets of accounts—and we saw this in the context of 7-Eleven, for example—where one set of books makes it looks like everyone is being paid properly, but the workers are being told separately, 'You've got to pay back some of that money; otherwise you'll lose your job.' In other places, we've seen many, many reports in the press of some big names withholding people's wages and other forms of income, like tips, that are meant to be going to people who are earning a very small amount of money. We know increasingly that wage theft is a problem. We know that there are many employers that try to get around even having to pay the legal minimum wage by calling their employees 'contractors' or through some other form of arrangement.

We know that's a big problem, but it's especially acute when it comes to superannuation because the payment doesn't get made directly to the employee; it gets made to a third party, to a superannuation fund. That means that an employee will often not know whether a payment has been made or not for quite some time. In my role before I came to this place, I spent quite a bit of time working on behalf of workers and unions when companies had gone under. Through no fault of the workers, a business gets placed into administration, and you're left scrambling around, trying to make sure that everyone gets their minimum entitlements. What we found, time and time again, was that, yes, a lot of people didn't get their wages, especially during those final couple of weeks of the business, but, when you delved into the superannuation, it was not uncommon at all to find that superannuation had gone unpaid for a very, very long period of time. People don't know about it, because not everyone spends their life checking their superannuation balance. If you've got young workers and people who don't speak English as their first language, as was the case for many of the people I was dealing with, they would find out for the first time when the company went under that superannuation hadn't been paid on their behalf.

We know that, not just for those insolvent companies but around the country more broadly, there's about $5.6 billion a year that is being be taken from workers in the form of unpaid superannuation. That's the scale of the theft, nationally, when it comes to superannuation—$5.6 billion. You would think that, faced with all of that, the government's response would be to say: 'How can we make the laws around paying wages and foregone wages in the form of superannuation as tough as the laws that apply to tax and as tough as the laws that apply to businesses who choose not to pay their suppliers? How about we start treating employment law as seriously as tax law and superannuation law as seriously as every other form of law where you get a penalty if you don't pay?' One way of doing that might be to start to address the cycles over which superannuation is required to be paid. Because it is being paid to a third party rather than directly to the employee, the employee is at a disadvantage when it comes to checking, so there should be an even greater obligation put on the employer to pay regularly.

There should be an examination of paying superannuation in alignment with pay cycles stipulated in workplace agreements, because if an employer were required to pay superannuation as regularly as they're required to pay wages then there would be a greater opportunity to have that checked, to have it checked on a regular basis and to minimise the amount of unpaid superannuation that is currently accruing. That just makes sense—it makes perfect sense. At the moment, where you can go for a long period of time before having to make your superannuation contributions on behalf of your employees, the size of the debt can balloon and the size of the theft can balloon, and that's what we've seen. That could have been something that the government looked at. But no. Instead, the answer is to give them a free pass.

We cannot allow the situation to continue where we treat underpayment of superannuation and underpayment of wages less importantly than breaches of other laws. It is time to beef up the enforcement of not underpaying, in all its forms, in this country. If we put as much attention into making sure that wage theft was stopped and that superannuation theft was stopped as the government puts into attacking unions, then we might have a lot of people who are better paid in this country. It seems there are hundreds of millions of dollars for a royal commission into unions that finds very little, but there are not hundreds of millions of dollars for a new enforcement unit to make sure that employers are paying the minimum amount of wages or the minimum amount of superannuation.

It seems that when it comes to wrongdoing in this country, if you've got a blue collar the government will throw the book at you, but if you have a white collar the government turns a blind eye. They had to be dragged, kicking and screaming, to having a royal commission into the banks. The Greens were the first ones out of the blocks calling for that and, eventually, everyone else came on board. I'm pleased about that. But it seems much harder to get this government to take the question of wage theft and superannuation theft seriously. I think that everyone in this country would be much better off if, instead of having witch-hunts that cost hundreds of millions of dollars into unions, we put that money into making sure that employers just comply with existing law. Just comply with existing law—making sure everyone gets paid properly.

At the moment, if you are a worker who has not been paid superannuation or you are worried about it or you've not been paid your wages properly, it can be very difficult to go and have that enforced—and I speak from personal experience here. If you find that you've been underpaid, you've got, largely, no option other than expensive court proceedings. And it's even more difficult if you find that you haven't been paid your superannuation, because you're at a disadvantage when it comes to the information and then you have to go and take your employer to court to get them to pay money to a third party. Most people—most workers—do not have the capacity to do that. There's an imbalance.

It should be very, very quick, cheap and easy to enforce legal minimum standards in this country. But it's not. It's not, and that's why we're seeing billions of dollars a year in superannuation theft and in wage theft. The government should be bringing policies and legislation to this parliament that make it easier to enforce existing labour and superannuation laws and that give organisations the resources to do that. But, instead, we have proposals for amnesties. Wouldn't it be amazing if everyone in this country suddenly got an amnesty for any unpaid tax that they've got? I don't imagine that's going to happen. But it seems that if you don't pay your workers their superannuation you will be able to get off, even if it's been going on for many, many years.

Let's have some consistency. Let's have policies in this place that start to align the requirement to pay superannuation more closely, time-wise, with the requirement to pay wages. And let's have some decent enforcement of existing laws. I'm not even arguing or asking for existing laws in this situation to be improved—although we should lift the minimum wage and we should make sure our workplace relations system works much more for everyday people in Australia. Let's put that to one side. Let's just ask for the bare minimum. Let's ask for existing entitlements to be enforced. Let's have a situation where everyone who does work in this country feels confident that the government's got their back in making sure they'll get paid their legal minimum entitlements and superannuation.

At the moment, people do not feel like the government's got their back. They feel like the government's got the back of big corporations and that they'll give big corporations handout after handout after handout, and amnesty after amnesty. But when it comes to people having the basic guarantee that if you've worked you are going to get the payment for the work that you've done, you're going to get the wages in your bank account and you're going to get the superannuation in your superannuation account, people do not have that confidence at the moment and nothing the government is doing is going to give them that confidence; it's going to go the other way.

So before the government starts bringing laws here to say, 'Let's give people some get-out-of-jail-free cards,' let's have laws that make sure existing entitlements are guaranteed and everyone who goes to work can know that, at the end of that day, their wages are as good as in their bank account and their superannuation is put aside for them. Let's toughen the laws to make that happen rather than do what the government's proposing.

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

I'm afraid to say this, but the member for Melbourne clearly hasn't actually read the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 and has displayed for the world to see his profound ignorance of the government's changes when it comes to the superannuation guarantee. There is not only this legislation that we are debating today but also a superannuation guarantee integrity bill, the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018, that goes to the very heart of the issues he's talking about—introduced, by the way, by a Liberal government—and, I'm very happy to say, very much supports workers being paid their entitlements. We actually do understand that superannuation is the workers' money. It's not the government's money, it's not the union's money, it's not the employer's money. It actually belongs to workers. We have put in place very tough measures in order to make sure people get the money they are owed under the superannuation guarantee.

I would like to thank those members who have contributed to this debate—in particular, those who, unlike the member for Melbourne, have actually read the legislation. The government is acting to improve the integrity of the superannuation guarantee, with the introduction of near-real-time reporting on superannuation guarantee obligations and payments. The Australian Taxation Office will be able to detect and act on non-payment of workers' entitlements much more effectively and with much greater severity going forward, including, in some instances, up to 12 months jail for employers who continue to do the wrong thing by their workers. To address historical noncompliance, this bill offers a limited, once-off 12-month opportunity for employers to come forward and pay their workers what they're owed. I think that's important to note. This is the last chance employers will get to come forward and receive concessional penalty treatment.

After the amnesty concludes, the Australian Taxation Office will take a dim view of those employers that could have come forward but failed to do so. It will not mean, though, that the worker receives one dollar less of the superannuation that they are entitled to. In fact, they get their superannuation plus the interest for the superannuation that hasn't been paid over that time period. So, the worker gets every single dollar that they're entitled to. The only people who miss out on a penalty payment are the government, and we are doing that because we recognise that, if we have an amnesty period, around 50,000 employees will receive around $230 million worth of their superannuation entitlements, which are vital retirement savings that they would otherwise potentially miss out on.

The Australian Small Business and Family Enterprise Ombudsman, as well as various organisations representing small business, commerce, accounting and the superannuation industry, are united in their support of the amnesty. That is because they know workers will get the payments that they are entitled to. The bill also streamlines compliance with superannuation guarantee, allowing employees to opt out of the regime where they would inadvertently breach their concessional contributions cap. This bill safeguards the integrity of the government's comprehensive 2016-17 superannuation taxation reforms. The bill does so by ensuring that limited recourse borrowing arrangements and related party transactions cannot be used to circumvent the contributions cap, and will prevent flow-on effects to people who are not engaged in gaming behaviour. I commend the bill to the House.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for McMahon has moved as an amendment that all words after 'that' be omitted with a view to substituting other words. The immediate question is that the amendment moved by the member for McMahon be agreed to.