Workplace relations lawyer Aron Neilson told My Business that “the penalties do need to be greater for non-payment of superannuation”.
However, a number of business owners have reacted angrily to the idea of greater penalties and compliance requirements.
“I think the situation is the system is not a workable one. The employee should also have a responsibility for the contribution out of their gross pay; this is just another case of having to babysit the employee,” said one.
Another said the problem may lie with large companies failing to pay small suppliers on time, leaving them unable to meet their payment obligations:
“While asking, perhaps these researchers could research what the size of debtor debt is to small business. Perhaps they might discover where this ‘lost’ superannuation is.
“If a creditor does not pay or pay on time, then the money does not exist to pay superannuation or BAS or wages tax for that matter. SMEs are not multinationals with hundreds of millions in the bank; most are struggling small businesses waiting inordinate times for payment and being treated unconscionably by large businesses who know they can leverage their market power with impunity.”
Yet another respondent questioned the role of accountants in overseeing employee super payments:
“I see this as a major issue for SMEs' accountants. Where there are businesses that have failed in this area and those businesses have used accountants to prepare their annual accounts and lodge quarterly BAS and annual tax returns, why have those accountants not identified this issue? When the ATO start to investigate, will they start to ask the employer's tax agent what questions the agent asked? Have these accountants failed in their duty to their clients?”
ATO and individuals' responsibility
Another idea put forward was that the ATO should take on greater responsibility for identifying defaulters early on, and that better reporting systems would identify underpayment much earlier.
“The difficulty is in balancing the interests of employers and employees and, as is always the case, the complying businesses pay for the sins of the defaulters. Single touch payroll is still a way off for the smaller end of town, but it will apply to them too eventually, as it should,” said one respondent.
Another added: “The employee has a responsibility to check as well and then report to the ATO any discrepancies that are not corrected by their employer in a timely manner. Two thirds of employers already do the right thing.”
Penalties, not red tape
However, not all business owners are against harsher penalties for failure to pay super contributions on time and in full – provided that these penalties do not impose a greater compliance burden on SMEs.
“As an employer who takes my responsibilities very seriously, I hope that penalties will be increased rather than red tape. Red tape just makes life harder for businesses that try to do the right thing and does little to stop people that are intent on doing the wrong thing,” one business owner wrote.
“How about speaking to businesses that do the right thing and get their ideas on how to overcome this?”