LEGISLATION to close a loophole that lets employers rip off workers who try and do the right thing by contributing to their super through salary sacrifice is welcome, but doesn’t go far enough according to Industry Super Australia.

Industry Super Australia (ISA) has published its submission to the Treasury Laws Amendment (Tax Integrity and Other Measures No 1.) Bill 2019, which seeks to close a loophole that has seen employers able to count a worker’s salary sacrifice contribution to their super as the employer’s own contribution.

ISA analysis of 2016-17 ATO data revealed that more than 370,000 Australian workers are currently missing out on $1.5 billion in super entitlements each year because of this loophole.

Despite the previous Parliament considering legislation to close this loophole, for some reason it was never brought on for debate in the Senate, meaning workers are continuing to miss out on their retirement savings, according to ISA chief executive Bernie Dean.

ISA has called on the Federal Government to address the bigger issue of unpaid super, "with one in three workers currently missing out on close to $6 billion in super because dodgy bosses are holding on to the money for themselves, rather than paying it into their employees super account".

"This happens because under the current law, employers are only required to pay super into a workers account quarterly, making it easy for them to hang on to the money and put it back into their business, or only pay a proportion of what the worker is entitled to," Mr Dean said.

"While the salary sacrifice loophole is a serious issue and must be fixed, the proportion of workers impacted by this loophole is around 17 percent of the total number of workers who are not being paid their legal super entitlements.

"In other words, the government’s Bill only fixes 17 percent of the problem."

ISA is calling on the Federal Government to take action on the bigger problem of unpaid super, by committing to change the law and make super payable on pay day.

"Federal politicians currently receive their super on pay day, it’s time there was one rule for everyone," Mr Dean said.

“More than 370,000 workers who think they’re doing the right thing and contributing to their own super are actually being double-crossed by their employers because of this loophole.

“This is one part of a much bigger problem. One in three workers are not getting paid super because dodgy bosses are hanging on to it and keeping it inside their business. It’s daylight robbery," Mr Dean said.

“The government needs to fix the whole problem – not just part of it. The government needs to go further and stop unpaid super once and for all by making super payable on pay day.”

ISA’s submission can be accessed here.

www.industrysuper.com

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THE Palaszczuk Government is backing business and giving young Queenslanders access to gain a valuable qualification for free to build a career in the industries where we know there will be jobs.

The Skills Strategy is a blueprint to deliver Queensland’s next generation of skilled workers.

A huge part of The Skills Strategy includes free apprenticeships for people under 21 years of age, across 139 qualifications.

"This is great news for young Queenslanders but even better news for businesses as they won’t have to bear the cost of training an apprentice," Queensland Premier Anastacia Palasczuk said.

Qualifications on offer are in traditional trade areas as well as non-trade areas such as electrical, plumbing, engineering, healthcare, hospitality, and early childhood.

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THE Financial Services Council (FSC) today welcomed the release of the Morrison Government’s Royal Commission implementation roadmap, confirming the government’s intent to act on all of the Commission’s recommendations by the end of 2020.

FSC CEO Sally Loane said with the release of the roadmap, industry has certainty and can approach the task of implementation in a more targeted way, ensuring resources are allocated and directed at the Federal Government’s priorities.

“It is very important to move quickly to rebuild consumer confidence and enhance consumer outcomes, however any legislation to implement the recommendations should be treated with the same diligence and rigor as any other new bill to be brought before the Parliament,” Ms Loane said.  

“The industry is committed to embracing this program of reform through action, strengthening the trust and ties between financial services and the community.

“The FSC is committed to working with Government to ensure all recommendations are implemented in the timeframes.”

The FSC said it looked forward to working on the implementation of the following recommendations:

• 2.4 – Ending grandfathered commissions for financial advisers;
• 2.7 – Reference checking and information sharing for financial advisers;
• 1.15 – Enforceable code provisions for industry codes of conduct;
• 4.7 – Application of unfair contract terms provisions to insurance contracts.

There are a number of recommendations due to be implemented that the FSC believes require further discussion with government:

• 2.10 – A new disciplinary system for financial advisers;
• 7.1 – Compensation scheme of last resort. 

Ms Loane said modernising the default superannuation system to end the proliferation of duplicate accounts by implementing a ‘default once’ framework has not been dealt with as part of this implementation roadmap.

“We look forward to the Government providing a response to the issue and timing for the reform as part of its response to the Productivity Commission’s report into the efficiency of the super system,” Ms Loane said.

www.fsc.org.au

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AUSTRALIA'S four major banks will appear before the House of Representatives Standing Committee on Economics at public hearings in Canberra on November 8 and 15, 2019.

The Chair of the committee, Tim Wilson MP, said, "These hearings are an important mechanism for the Parliament to publicly scrutinise and hold Australia’s four major banks to account.

"The committee’s scrutiny will include examining the four major banks’ progress in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

"Given the widespread misconduct across the financial services sector identified by the Hayne Royal Commission, it is important that financial institutions are held accountable and to ensure that they make the crucial improvements needed to start restoring trust in our financial institutions," Mr Wilson said.

Beyond actions taken by the sector, Treasurer Josh Frydenberg released a royal commission implementation road map today, which outlines how the Morrison Government will move on all recommendations requiring legislation by the end of 2020 – with one-third planned to be finalised this year.

In a future series of hearings the committee will extend its scrutiny beyond the four major banks to smaller banks and the insurance, superannuation and financial advice sectors.

Public hearing details

Date: Friday, 8 November 2019
Time: 9.15am to 4.15pm
Location: Committee Room 2R1, Parliament House, Canberra

9.15am–12.15pm: Westpac
1.15pm–4.15pm: Commonwealth Bank of Australia

Date: Friday, 15 November 2019
Time: 9.15am to 4.15pm
Location: Main Committee Room, Parliament House, Canberra

9.15am–12.15pm: National Australia Bank
1.15pm–4.15pm: Australian and New Zealand Banking Group 

The hearings will be broadcast live at aph.gov.au/live.

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