The penalty regime for unpaid super has again been proven to be wanting, with the Senate Estimates Committee hearing yesterday that as many as 8 out of 10 employers have got away with failing to pay super on time.
Under questioning from deputy chair of the Senate Economic Committee, Senator Chris Ketter, the Australian Taxation Office (ATO) confirmed that it routinely waived all penalties for late payment of super and had not levied a single 200 per cent maximum penalty in the last five years.
The ATO also admitted that it had inappropriately waived a nominal $20 per employee administrative fee penalty up until 2017.
Industry Super Australia (ISA) this morning called for an “urgent overhaul” of the penalty regime for unpaid super in light of this testimony, saying the current approach undercut the majority of employers who were doing the right thing.
“The wholesale waiver of statutory penalties prescribed under the law for failing to pay super on time is a green light to unscrupulous employers short-changing their workers’ super,” ISA deputy chief executive, Matt Linden, said.
“The ATO’s so called ‘practical compliance approach’ is causing a textbook moral hazard where employers take the risk knowing they won’t be caught or even if they are simply pay what they should have paid anyway (with nominal interest) and walk away.”
The organisation called for minimum mandatory penalties, slamming the $20 administrative penalty as “wholly inadequate and not even a parking ticket penalty”.
Linden predicted that should weak penalty enforcement continue, “the $6 billion a year problem will continue to spin out of control”.
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.
Super returns continued to climb in March, raising hopes of delivering double-digit returns by June depending on the performance of this next quarter.
The dedicated super fund for emergency services and Victorian government employees is under fire for unpaid entitlements to transport employees, which could exceed $40 million.
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