Federal Small Business Minister Senator Nick Sherry and his shadow Bruce Bilson are warring over the efficacy of the Small Business Superannuation Clearing House.
The Small Business Superannuation Clearing House, a service that eases the chore of paying employee super for small business, has become a political hot potato in the wake of My Business’ MyBiz Expo.
The Clearing House was established in 2010 and allows small business to send Medicare details of their employees’ preferred superannuation fund. Businesses send the Clearing House a single lump sum payment comprising all employee super payments, and the Clearing House then distributes them to the relevant funds.
At the MyBiz Expo Federal Small Business Minister Senator Nick Sherry (who says the Clearing House was his idea) said the service has been adopted by 4500 businesses and said this represents decent takeup.
But Bruce Bilson, Federal Member for Dunkley and Shadow Small Business Minister, who also attended the MyBiz Expo, and Shadow Minister for Financial Services and Superannuation Mathias Cormann beg to differ. The pair issued a press release saying “Almost all of Australia’s 2.1 million businesses have ignored the Medicare clearing house with only 4,500 registering so far. At a cost of $16 million a year, the 90,000 transactions processed have cost more than $177 each.”
Picking on the $16 million figure is a bit naughty: government programs nearly always have startup costs that make an average cost per client a great way to score political points but a poor way of assessing a service.
But the Opposition is not just being critical for the sake of it: a few weeks back it released its own plan that would see the Australian Taxation Office (ATO) take on the role of superannuation clearing house. The Opposition plan also proposes that employers simply add Super payments to the PAYG tax they already sent the ATO, an arrangement it promotes because business already has this process in place. Bilson argues this pre-existing relationship means it makes sense for the ATO to take on the clearinghouse role.
COSBOA certainly likes the opposition proposal, with Executive Director Peter Strong saying in a press release that “the collection of superannuation has been a bugbear of small business for a long time.”
“We have been forced to do the work of finance companies and we have been fined if we didn't do that work. We have been the only people in the super system not paid for our time and effort and we are the only individuals who can be fined. We have been forced to become financial advisers for our employees. COSBOA has fought for this outcome and we are more than pleased, next step is to have this happen."
Too many SMEs are making this mistake
By Adam Joy
Taking digitisation out of the ‘too hard’ basket for SMEs
By Jason Brouwers
The insanity of consumer expectations
By Jason Dooris