Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017


23 OCTOBER 2017

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 deals with two issues—choice of fund and closing the salary sacrifice loophole.

I note at the outset that the choice of fund provisions most likely affect about one-tenth of the number of people affected by the issue of unpaid superannuation. Accordingly, Labor will not oppose this bill in the House but will reserve our position until the Senate Economics Legislation Committee has reported on 23 October 2017.

The choice of fund provisions amend the Superannuation Guarantee (Administration) Act 1992 to require that employees under workplace determinations or enterprise agreements have the right to choose their superannuation fund. Those changes would apply to new workplace determinations and enterprise agreements made on or after 1 July 2018. Industry Super Australia estimates that, of those employees covered by enterprise agreements, about 7.4 per cent are affected and, as a share of the total workforce, only 1.9 per cent are affected. As I have mentioned, Labor will reserve our position on these proposed choice of fund changes until the Senate committee has reported.

The salary sacrifice loophole provisions reflect the fact that current laws allow employers to reduce their superannuation contribution if an employee chooses to salary-sacrifice into super. The Senate inquiry into the nonpayment of the superannuation guarantee recommended that the superannuation laws be amended to ensure that an employee's voluntarily sacrificed superannuation contribution cannot count towards the employer's compulsory superannuation obligation or reduce the ordinary time earnings base on which the superannuation guarantee is calculated. Labor supports this provision, which puts that change into effect and removes the current loophole.

But I do note that, while this change is welcome, it's nowhere near sufficient to solve the problem of unpaid superannuation. Unpaid superannuation is a massive problem in Australia. Industry Super Australia estimates that 2.4 million workers are losing some $5.6 billion in payments each year. That is equivalent to each of those workers losing $2,000 a year which should be going into their retirement savings. Unpaid superannuation is a problem affecting around 10 times as many people as choice of fund, and yet it is not receiving the attention from this government that it should.

Superannuation is part of a worker's pay and conditions. Employers are required by law to pay superannuation, and not to pay superannuation is, frankly, akin to wage theft. We need to do more to make sure people get paid what they earn and to make sure the 2.4 million Australian workers who are suffering from unpaid super get what's rightfully theirs. The government have failed to adequately respond to the problem of unpaid superannuation, instead focusing their energies on choice of fund, an issue which, not surprisingly, predominantly affects industry superannuation funds and affects around one-tenth of the number of workers affected by unpaid superannuation.

We support the closing of the salary sacrifice loophole. We will continue to work on the issue of unpaid superannuation, and we reserve our position on choice of fund until the Senate committee has reported. Universal superannuation is a Labor initiative. Labor will always look for ways of improving superannuation for working Australians.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.