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Deferral of SG increases will help businesses, says Ombudsman

Adrian Flores
Adrian Flores
11 September 2020 1 minute readShare
Kate Carnell

Small Business Ombudsman Kate Carnell has called for a deferral on legislated superannuation guarantee increases as well as cuts to super tax to help alleviate financial pressure off small businesses.

In a letter to Treasurer Josh Frydenberg, Ms Carnell proposed a two-year deferral on legislated SG increases.

In addition, she also called to cut the 15 per cent tax on compulsory employer superannuation guarantee contributions down to 7.5 per cent during that time.

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Ms Carnell said the combined measures offset each other to ensure workers end up with a similar superannuation amount as they would have under the scheduled increase.

“We have to get the balance right by ensuring small businesses aren’t hit with rising costs and workers are no worse off,” Ms Carnell said.

 

“Many small businesses are already struggling to stay afloat as a result of the COVID-induced recession and cannot afford to pay higher costs.

“These increased costs would put small-business owners under even more financial strain, placing jobs and businesses at risk.”

Despite the temporary measures, Ms Carnell also said it is equally important to safeguard the long-term financial future of Australians through superannuation.

“Our modelling shows our proposed tax cut would cost the government no more than $6 billion per year and would also support struggling small businesses and help the millions of Australians who used the early access to superannuation program to start restoring their long-term super balance,” Ms Carnell said.    

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“Ultimately, by implementing this proposal, the federal government would be supporting small businesses and all Australians who deserve a dignified retirement.”

The push comes after the Tax Institute noted that many small businesses are struggling with the impacts of COVID-19 and were still hoping there would be an extension to the SG amnesty, and called for an extension of the deadline to 7 March 2021.

The SG amnesty ended on 7 September 2020.

Deferral of SG increases will help businesses, says Ombudsman
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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