In September, the government introduced Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 into Parliament, re-introducing the SG amnesty proposal that had lapsed with the calling of the May election.
The Senate Economics Legislation Committee has now given the bill the green light, recommending that it be passed.
The SG amnesty provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance dating from 1 July 1992 to the quarter starting on 1 January 2018.
It will allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, as well as remove the administrative component and the Part 7 penalty that may otherwise apply in relation to historical SG non-compliance.
The new bill will also impose minimum penalties on employers who fail to come forward during the amnesty period by limiting the commissioner’s ability to remit penalties below 100 per cent of the amount of SG charge payable.
The committee heard dissenting views from Labor senators, as well as industry voices, who suggested that an amnesty would send “a message to employers that they can disregard Australia’s superannuation laws without consequence”, and that wage theft was acceptable.
“Due to the amnesty, those companies will escape penalties that would otherwise apply to them. It sends a signal in markets such as contracting sectors that practices of non-compliance can be overlooked through future amnesties,” said national secretary of United Voice Jo-anne Schofield.
Alternatives, such as retrospective strategic audits by the ATO, were also suggested in place of the proposed SG amnesty.
The committee’s view
The committee said it noted concerns around the negative perception of the amnesty but failed to offer a workaround, instead calling for the Tax Office to maximise awareness of the amnesty to ensure widespread engagement.
“While the committee notes the importance of ensuring that employees receive their full entitlements, the committee is also cognisant of perceptions that some employers have potentially benefited from superannuation guarantee non-compliance, and indeed, that such employers will now be released of punitive actions as a result of the amnesty,” it said.
“Accordingly, to best ensure the success of the amnesty, the committee recommends that the ATO develop and implement a communication strategy to maximise employer awareness and engagement with the superannuation guarantee amnesty.”
The committee ultimately decided to put forward its recommendation for the bill to be passed, citing the 7,000 employers that had come forward to voluntarily disclose historical unpaid superannuation since the one-off amnesty was first announced on 24 May 2018.
“In the committee’s view, this significant level of disclosure, even prior to the legislation being enacted, is a strong indication that the amnesty will achieve its projections of recovering over $230 million in superannuation for employees who would have otherwise missed out,” the committee said.