Ross Hart (Bass, Australian Labor Party) Share this | Link to this | Hansard source

The extension of Single Touch Payroll reporting is to extend what currently applies to entities with 20 or more employees—the so-called substantial employers—to all entities with employees. Likewise, the facilitation of more regular reporting generally extends that which applies to substantial employers to all entities. The commissioner's collection and compliance measures have been enhanced. Previously, for the purposes of the director penalty provisions in division 269, a director was under an obligation to ensure that the company complies with its obligations with respect to an estimate under division 268 commencing on the initial day. An 'initial day' was defined as 'the day the company is given a notice of the estimate'. The new law redefines the initial day.

For PAYG liability estimates, the initial day will be, for companies who are small and medium withholders, the last day of the period identified in the notice of the estimate, and, for companies which are large withholders, the day on which the company would have been obliged to pay the underlying liability. In cases of nonpayment of superannuation guarantee liability estimates, the initial day will be the day from the end of the quarter to which the estimate relates. This is important to ensure that directors are liable for defaults determined by reference to the particular failure, the subject of a notice. Given the resources available to large withholders, it is entirely appropriate that director penalties are determined by reference to the date upon which the company would have been obliged to pay the underlying liability.

There is a pleasing extension of the power of the tax commissioner to require an entity to provide a security deposit upon the obtaining of a court order for that purpose. The security deposit will be with respect to an existing or future related tax-related liability. Whilst it might not prevent the scourge of phoenixing, where businesses are reincorporated and re-established after insolvency with seeming impunity, it is an important measure to ensure that taxation obligations can be the subject of a security. There are limitations upon the remission of director penalties where a company is placed into voluntary administration where there is an unreported superannuation guarantee charge liability and/or where the company has an obligation to pay an estimate of the superannuation guarantee charge by a particular date and the date at which they pay the underlying liability has passed. It's important for these issues to be the subject of an inquiry so that we, this House, can be positively satisfied that these measures are sufficient to stop the present widespread underpayment of superannuation.

Superannuation industry stakeholders broadly support the bill. However, Industry Super Australia is concerned that the bill carves out labour-hire and contract workers from the information that the employers are to report to the Australian Taxation Office as part of the Single Touch Payroll system. There is a reasonably broad consensus amongst the ISA, the Australian Institute of Superannuation Trustees and the ASFA that the bill does not go far enough to address the problem of unpaid super, and those organisations have called for changes, including, firstly, the removal of the $450 monthly income threshold for eligibility for superannuation guarantee, making pay cycle reporting for superannuation guarantee payments by employers compulsory, making it compulsory for employers to report ordinary-time earnings, including super in the Fair Entitlements Guarantee program and facilitating third-party assistance for employers with unpaid super. As to those issues, it is not rare for us to see in our constituency offices many complaints by employees that have been ripped off by employers going into liquidation where they are relying upon their Fair Entitlements Guarantee program, but of course this doesn't presently apply to superannuation.

The first two of these measures are also included in the former member for Mayo's private member's bill to address unpaid super, which is in the House. Other measures that bill had proposed which were not included in the government bill are: including the superannuation guarantee in the National Employment Standards; creating a duty for a trustee to take reasonable steps to notify their members where it could be reasonably expected that a member should have received a contribution from an employer but did not and also requiring the tax commissioner to conduct a review of the employer's compliance with the superannuation guarantee payment obligations; and including recommendations to improve compliance. It is important, as I've said previously, that the bill be referred to a Senate inquiry to give stakeholders the opportunity to raise their concerns that the bill does not go far enough and to allow some technical issues to be explored further.

Schedule 7 also contains new provisions with respect to information sharing. This enables the sharing and verification of tax file numbers which have been obtained in accordance with Commonwealth law—that is, between the commissioner and Commonwealth agencies. The changes ensure the Commonwealth agency that can legally request the tax file number of an individual is able to verify that the tax file number actually belongs to that individual by having the number verified by the Commissioner of Taxation.

Schedule 8 makes a number of miscellaneous amendments to the taxation, superannuation and other laws, for example minor technical changes to correct spelling errors and repeal inoperative provisions and to update references to the tax law to reflect changes to the names of state and territory legislation and specifically listed deductible gift recipients. There are some amendments to the Fuel Tax Regulation 2016, which did not explicitly state some charges which were to be calculated on weight rather than volumes where appropriate and also did not explicitly state that charges would be determined at a maximum of once a year. This is the existing practice.

There's an amendment to the Migration Amendment (Temporary Activity Visas) Regulation 2016. Through an oversight, certain consequential amendments were not included in legislation resulting from a change in classification of subclass 416 visa to subclass 403. The changes are beneficial to those affected, despite some retrospectivity. For those who must check these things, there's also an amendment to the Fuel Tax Act 2006 to change the words 'tax fuel credit' to 'fuel tax credit'. As a commercial lawyer who often trawled through documents looking for inconsistencies, this latter issue strangely pleased me. There are two amendments which rectify unintended consequences of previous government bills. It might be fairly said that these errors should've been foreseen, such as a problem which was created with the introduction of the government's 2016 superannuation changes.

Schedule 9 amends the Income Tax Assessment Act 1997 to specify some further entities as deductible gift recipients. Again, having been a commercial lawyer advising organisations on the establishment of trusts, including some deductible gift recipient organisations, it's always interesting to see some of the new organisations that are specifically listed in the taxation legislation. These organisations are: Australian Philanthropic Services Limited, which is proposed to be listed from 1 July 2016; an organisation called Foundation 1901 Limited, which is to be registered from 1 September 2016 to 31 August 2021 inclusive; and an organisation called Sydney Chevra Kadisha, which is to be registered from 1 January 2018 to 31 December 2019.

For those who must be aware of these things, Australian Philanthropic Services Limited is a registered charity that sets up and administers private ancillary funds for individuals and families as well educating individuals, foundations and advisers concerning ancillary funds and the making of philanthropic grants. Having had the pleasure of acting as trustee of a substantial private charitable trust created within a will, I know that good works can be done either within a private charitable trust or, in this case, through the establishment of private ancillary funds. I was very interested to note that Foundation 1901 Ltd is a registered charity established to engage with and educate Australians about Federation. It engages with Australians through education campaigns to maximise understanding of the lessons of the history of Federation and its continued importance to Australia. Finally, Sydney Chevra Kadisha is a registered charity that provides funeral services to the Jewish community of New South Wales irrespective of an individual's ability to pay, by providing subsidised or free burial services.

Andrew Gee (Calare, National Party) Share this | Link to this | Hansard source

I rise to support the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018. The superannuation guarantee is our only compulsory mechanism that ensures every Australian saves some of their income for use in their retirement. Along with the family home, superannuation continues to be a tax-effective means by which Australians can accumulate wealth from each and every pay packet. The government has consulted widely on this bill, and the result of that is the action that it is taking, as it well should. From shop assistants to shearers and drivers to builders and managers, these days everyone has an expectation that their wage or salary packet will also include the compulsory superannuation component. None of these people expect that they will be short-changed on their superannuation. It matters little whether the short-changing is deliberate or not. The point is that people in Australia expect to receive their superannuation out of their earnings and, when they don't, it is a bitter, painful financial blow.

We need to act on this issue because, while the vast, overwhelming majority of employers pay the superannuation guarantee, it can be simply devastating when they don't. For an employee, it can mean the difference between taking the big trip that you worked your whole life for or missing out, or between finally paying off the home mortgage or not. It's an awful experience for those people who are short-changed and then have to go through a very rigorous process to try to get their funding back, if they can get it back.

There's a very pertinent example of this from my electorate, which is the case of Graeme and Victoria Smith-Webb. Mr Smith-Webb was employed by a company in my electorate between 2011 and 2016. During the time that he was working for that employer, he noticed that his superannuation was not being paid, despite being shown pay slips which indicated that it had been so paid. Mrs Smith-Webb very diligently checked with the relevant super fund, which showed that nothing had been contributed for four years. Over a period of six years, despite numerous requests in writing to his employer and requests in person and over the phone to the relevant superannuation manager, Mr Smith-Webb's superannuation remained unpaid. They did everything they could. They alerted the relevant authorities in the Australian government. They did the right thing. Then, fairly recently, the employing company went into liquidation. Mr Smith-Webb was advised by the liquidators that he had Buckley's chance of seeing any of his superannuation and that this kind of problem was quite common. Mr and Mrs Smith-Webb feel badly let down by the system. They feel cheated and they feel aggrieved.

So this is an important bill to ensure that this type of behaviour does not continue from employers and that they are not short-changing their workers. In recent debate, the members opposite were talking a lot about phoenixing, and this bill will help end this exploitation of Australian workers with a reporting regime that regularly reconciles the superannuation contributions that employers say they are paying with what workers are actually receiving in their superannuation funds. The bill introduces amendments to improve compliance with the superannuation guarantee and puts several measures in place to either help employers who are getting it wrong or crack down on those who are doing the wrong thing. I'm not going to wade through each and every point of this legislation. Suffice to say there are some key initiatives that take advantage of the data that employers and superannuation funds already submit and initiatives that empower the ATO to fully reconcile wages, salary and superannuation data.

Nobody likes their government to be officious. In most cases, the ATO will contact employers to help guide these matters back on track and, where necessary, the ATO will be able to compel employers to undertake further education on the subject of the superannuation guarantee. I think that's very important. You've got to let employers know just what this means, just how important it is and that they can't be dudding their workers. Employers who do not pay their employees their superannuation entitlements are breaking the law. When they don't get their employees' superannuation into order, the ATO will have the power to compel a payment of any outstanding superannuation guarantee amounts. There may well be jail time—up to 12 months is on the cards—for those who continue to fail to meet their obligations. Importantly, this bill will also allow the ATO to tell employees what it's doing to recover their unpaid superannuation. This is only reasonable since those employees have actually earned that money; it's their money.

I understand that 70 per cent of employers reported by staff for not paying their superannuation are small firms turning over $2 million or less. These businesses have more manual systems and processes than larger firms, and it therefore makes sense to be introducing a single-touch payroll system to these firms on 1 July 2018. the single-touch payroll means that pay-as-you-go withholding of payments, employee salaries or wages and ordinary time earnings and superannuation contributions will all be reported with each pay run. In the same vain, for each payroll cycle, superannuation funds will now report to the ATO on the contributions received and overall account balances. These respective reporting requirements will then be reconciled against each other so that the ATO can identify and help clear up discrepancies much more quickly.

In short, these reforms will enable the ATO to keep an eye on any superannuation guarantee shortfalls at the employer and employee level and to take much more timely action where required. Intervening early, potentially before the employee is aware, can prevent superannuation guarantee liabilities from spiralling out of control and helps to ensure employees receive what they are owed. This bill is very important for the day-to-day operation of our superannuation and taxation system. It introduces some simple measures to improve the integrity of the data reported by small businesses to match it against reporting by superannuation funds and allows different government agencies to compare taxpayer data that they already hold. Quite simply, this bill makes our superannuation, taxation and welfare systems operate more effectively.

I will conclude by adding the observation that what Mr and Mrs Smith-Webb from the Calare electorate have been through has been an awful experience. As I said during my earlier remarks in the House, they feel deeply aggrieved that they haven't been able to recover Mr Smith-Webb's lost superannuation. It is a case that has highlighted the flaws in the system. We, as a country, can be doing much better for people like the Smith-Webbs. If this bill serves to ensure that others don't have to go through what the Smith-Webbs have been through, then that is a very good thing for this country and a very good thing for the people of my electorate. This is an important bill, and a lot of work has gone into it. I commend it to the House.

Paul Fletcher (Bradfield, Liberal Party, Minister for Urban Infrastructure and Cities) Share this | Link to this | Hansard source

At the outset, I thank those members who have contributed to this debate on the Treasury Laws Amendment (2018 Measures No. 4) Bill 2018. You would be as firm in your conviction as I am that, if Australians are to continue to have confidence in the integrity of the superannuation system, we must ensure employers are paying workers their full entitlements. The Turnbull government is introducing strong new rules that will protect workers' superannuation entitlements by improving compliance with the superannuation guarantee. We are targeting the key barrier to better enforcement of the super guarantee: the ATO's visibility over how much superannuation employees are owed and the contributions their funds receive. This legislation will provide the ATO with near real-time information on employers' compliance with their superannuation guarantee obligations, allowing the ATO to identify and act on noncompliance earlier.

We are enhancing the ATO's toolkit to police noncompliance, introducing tough penalties for employers who are repeatedly short-changing their workers, and strengthening the ATO's powers to recover unpaid superannuation on behalf of employees. Employees will benefit from better and more frequent information about their superannuation. The ATO will be able to provide information about actions they are taking to collect unpaid superannuation guarantee contributions to employees and former employees irrespective of whether they have made complaints to the ATO. The bill will add three significant charities—Australian Philanthropic Services, Foundation 1901 and Sydney Chevra Kadisha—to the list of specified deductible gift recipients. The bill makes minor amendments to Treasury portfolio legislation to ensure our laws continue to operate as intended. The bill is an important step in safeguarding workers' entitlements, ensuring the superannuation system works for all Australians, and promoting charitable activity in Australia. I commend this bill to the House.

Mr Tim Wilson interjecting—

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

I'm afraid the debate has been summed up—I've been corrected: if the member wishes to speak, he can, because the minister at the table wasn't the minister who moved the bill.

Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

My intention was to speak only briefly on the piece of legislation and to rise in support of it on the basis that it provides a fundamental good in dealing with the challenges faced by many workers around superannuation, particularly in ensuring the compliance necessary by employers for every Australian worker to be paid what they are due consistent with the tax office and many other requirements. Every single member across this parliament would be aware of the challenges that many employees face in ensuring they have the benefits owed them by law and the arrangements necessary to secure their superannuation. In particular, people working in part-time, flexible or intermittent work need assistance in seeking the opportunity to secure their entitlements.

This bill provides a framework for directly making sure that people are paid the benefits that they have accrued and earned. The bill introduces amendments to improve compliance and crack down on employers who do the wrong thing. Whether you're on this side of the chamber or on the other side of the chamber, making sure that occurs is critical. Some employers, sadly, do not pay their employees' superannuation because they do not understand their obligations under the superannuation guarantee. This amendment ensures those employers that do the wrong thing and do not pay their employees' superannuation benefits will face stiff penalties including up to 12 months of imprisonment. This sanction sends a very clear signal that failure to comply with the superannuation guarantee is a serious offence taken very seriously by everybody in this parliament and most particularly by the Turnbull government. We must ensure appropriate safeguards have been built into this system so that, where there is nonpayment of benefits, there is not just proper recourse for those who are missing out but punishment for those employers who are doing the wrong thing by their workers.

Across this great nation millions of Australians are doing the right thing in their small businesses and have nothing to fear from this piece of legislation—people who take a stick and make a wicket out of it by taking a risk and providing an opportunity for Australians of all different ages and skill levels to secure employment, whether for the first time or throughout different stages of their career, and have the chance to better their lot. The simple expectation in response to a fair day's work is, of course, a fair day's pay. On top of that, a fair day's pay means making sure they're paid the full benefits associated with such an arrangement.

This bill also seeks to modernise the existing arrangements particularly related to the superannuation guarantee and the potential to provide reporting, particularly as a consequence of changes in technology but also to make sure that we minimise and reduce the regulation and red tape that are imposed on employers who are doing the right thing. This piece of legislation seeks to achieve all of those benefits in a relatively straightforward way, to the benefit of Australian workers.

The critical part of this bill is that it sits at the heart of an industrial relations system that makes sure it treats workers with decency and respect and also makes sure that people who make a contribution and who stand on their own two feet do not face deleterious or negative consequences at the hands of employers who do the wrong thing. I commend the bill to the House.

Question agreed to.

Bill read a second time.