Vested interests perpetuate super defaults says COSBOA

The Australian Taxation Office (ATO) rather than employers should be responsible for the payment of the superannuation guarantee, according to Council of Small Business Organisations Australia (COSBOA) chief executive, Peter Strong.

Strong used an appearance before the Senate Economics Legislation Committee to repeat his organisation’s long-held view that employers should be removed from the process of collecting the superannuation guarantee (SG) on behalf of employees.

Giving evidence during the committee’s review of legislation which would close-off a key SG loophole, Strong also accused industry funds and superannuation industry associations of having a vested interest in opposing moving payment of the superannuation guarantee to being part of pay as you go (PAYG) tax arrangements.

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In doing so, he suggested that the existing SG system was a reflection of unions attempts to maintain default funds under modern awards.

“We have people, and mainly the industry funds – people think it's bashing up unions. It's not just unions. The unions in industry associations who make money out of the superannuation collection process are against changing that, because it would take it out of the award system and would put their particular close-to monopolies under threat,” he told the committee. “So they're against that.”


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Spot on Mike. From day 1 of compulsory super, Labor never had a mechanism other than union muscle to ensure payments were made by employers. Making the payments as part of the PAYG system is the logical solution to ensure all employers make payment on a timely basis because of the inbuilt checks. Collecting the contributions tax up front would simplify fund tax arrangements and help the ATO monitor tax arbitrage activities of the larger funds who can currently hide their transactions using their members’ contribution tax liability.

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