SG changes will undermine consumer protections
The Australian Institute of Superannuation Trustees (AIST) has called on the federal government to reconsider changes to the superannuation guarantee (SG) charge, saying they will “hurt” consumers.
The proposed changes would lessen the penalties for employers who do not meet their obligations to pay superannuation to their employees.
AIST executive manager, policy and research, David Haynes said the changes will remove the incentive for employers to make mandatory payments on time
“The system should reward employers who are good corporate citizens and penalise employers who are bad corporate citizens,” Mr Haynes said.
“The penalty for not paying super on time should be substantially greater than the SG itself."
According to AIST, an employee earning approximately $5,000 per month would receive $1,140 in superannuation. Under the current regime, if this payment is late, the employer would be required to pay an additional $285.
However, AIST pointed out that under the proposed changes the employer would only be liable for the unpaid super.
“The purpose of the charge is to encourage employers to meet their legal obligations; it is fundamentally a form of consumer protection,” Mr Haynes said.
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