Government's humiliating backflip on superannuation compliance

16 March 2016

In a significant victory for Australian workers and a humiliating back-down for the Assistant Treasurer, the Government has today abandoned its badly-motivated plans to weaken the penalties for employers who do not pay superannuation correctly.

Around 690,000 Australians, or one in fifteen workers, are losing around $2.6 billion in super annually, according to research by Tria Investments for CBUS.

The ATO described the problem as “endemic” and the Australian National Audit Office found that as many as 11 to 20 per cent of employers could be non-compliant with their superannuation obligations.

In the context of this big and growing problem, the Government tried to weaken penalties for non-compliant employers, dismissing them as “red tape” and sparking a backlash around the nation.

Complying with the super guarantee laws isn't red tape, it's ensuring that Australians get the superannuation they have worked for and deserve.

Last year, Labor flagged that we would move an amendment to block these plans.

In January, we promised that we would fight them to the end on this issue, on behalf of the thousands of Australians who miss out on super and would be more likely to miss out in the future.

Today, the Government has been dragged kicking and screaming to abandon these plans which would make our superannuation system worse, and voted in favour of Labor’s amendments.

The chaos and dysfunction of this Government’s economic policy-making is such that Government members were spruiking the SG Charge changes less than half an hour before they were abandoned.

This is a big win for workers but the fight is not over, with a Government who continues to harm the retirement incomes of average Australians.

Unfortunately their plans to abolish the Low Income Superannuation Contribution, to freeze the superannuation guarantee and remove safeguards for default funds will do real damage to super into the future.