In a statement on Thursday, Minister for Revenue and Financial Services Kelly O’Dwyer announced the introduction of the Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018 that waives penalties dealt to employers for failing to pay superannuation owed to employees.
In order to be protected by the amnesty, which will last for exactly one year from Thursday, 24 May 2018 if the proposed amendment is passed, employers must pay out all outstanding superannuation “including the high rate of nominal interest”, according to the statement.
If the unpaid superannuation is not paid to employees within the year, penalties for employers caught after the amnesty period will be even more severe, typically a minimum of 50 per cent on top of the owed super.
Throughout the amnesty period, the Australian Taxation Office will be continuing its “usual enforcement activity against employers for those historical obligations they don’t own up to voluntarily”.
The bill also proposes to afford the ATO with a set of new powers, one of which is to obtain court-ordered penalties where employers refuse to pay super guarantee liabilities, with a maximum jail term of 12 months for “the most egregious cases of non-payment”.
Furthermore, it proposes to allow the ATO to require super funds to report more frequently – monthly, at the minimum – on contributions received, which will allow the office to identify and react to cases of non-compliance.
The office may also have its “recovery powers” reinforced, such as “strengthening director penalty notices and use of security bonds for high-risk employers” to help the ATO collect and pay super to employee accounts.
Citing ATO figures, Ms O’Dwyer said $2.85 billion in superannuation payments went unpaid between 2014 and 2015.
An amnesty is a good idea. It will certainly incentivise catch-up super. Making the late-paid super process easier would also have been a great benefit. Having to complete a quarterly form where there have been shortfalls across several years is very time consuming to small businesses. Does the government understand just how much compliance is actually costing small businesses? Why not have a full review (Royal Commission style) to identify what the government SHOULD be doing to make Australia a more productive country? Lets start removing the red tape instead of overlaying it thicker and faster, and often retrospectively like the recent CGT Small Business Changes which have been backdated to 1/7/2017 even though they were only mooted in the 2018 calendar year! How can a business or investors plan when the government change the rules in such a fashion? A good start Kelly, but this is just the tip of the iceberg if the Government are truly serious about helping business right-wrongs!