IPA says SG penalty regime too harsh
The current onerous penalty regime relating to superannuation guarantee (SG) non-payment has done little to address the problem and may have actually made it worse, according to the Institute of Public Accountants (IPA).
In a submission to the Senate Economics Committee inquiry into non-payment of the SG, the IPA has argued that the penalties might very often be “disproportionate to the mischief”.
“The harshness of the penalty regime can lead to further noncompliance delays, i.e. employers further delaying making superannuation contributions,” it said.
“The current onerous penalty regime has done little to address the problem of unpaid superannuation guarantee remittances which some experts are claiming is worsening. Moreover these punitive penalties have a significant impact on small businesses which are often late in meeting their SG obligations due to cashflow problems and not because of any more sinister intentions,” the IPA submission said.
It pointed out that small businesses did not have access to the same financial resources compared with larger businesses, stating: “Due to limited access to funds, one option they have is to delay payment of employee obligations”.
The IPA submission said that while its members strongly discouraged this practice, “for many small businesses it is a harsh reality”.
“Whilst a penalty regime is required as a deterrent to ensure employers meet their statutory employee obligations, the harshness of the current regime is considered excessive especially for the small business sector,” it said.
Recommended for you
Australia’s largest super fund, AustralianSuper, has announced multiple additions to its executive leadership team to focus on global growth and innovation.
Super Review rounds up last month’s biggest people moves in the superannuation industry, including a new fund chair and a private markets head.
Investment returns for the Future Fund hit a milestone in September, adding $200 billion in value for the first time ever.
Australia’s largest super funds have deepened private markets exposure, scaled internal investment capability, and balanced liquidity as competition and consolidation intensify.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
225.31 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
120.73 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
72.47 3 y p.a(%)
4
Paradice Australian Mid Cap A
69.09 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
61.94 3 y p.a(%)
