Reducing the Super Red Tape Burden on Business

March 25, 2008

The Member for Eden-Monaro Mike Kelly says amendments introduced into Parliament
last week will provide fairer treatment for employers who make super contributions
after the due date.

“We’re taking action in support of both the business community and employees,” Dr
Kelly said. “This Bill will ensure late contributions still count towards reducing
the required superannuation guarantee payments of an employer. These changes mean
employers will not have to pay the same amount twice.”

Under Superannuation Guarantee (SG) law, employers are required to make compulsory
super contributions at least quarterly on behalf of their employees.

If employers fail to make required contributions within 28 days of the due date,
they must make the payments through the SG charge payable to the Australian Taxation
Office (ATO). When paid to the ATO, the employer’s SG charge includes the shortfall
amount.

“The problem with the current system is some well meaning employers incorrectly make
late SG payments directly to their employee’s super fund instead of the ATO,” Dr
Kelly said. “If they do that, they are then treated as not having paid at all - in
effect, they are forced to pay twice.

“In Opposition, Labor called on the then Coalition Government to fix this harsh
treatment of employers, with no success.

“In line with our Government’s agenda of reducing the red tape burden on small
business we’re taking early action to address this problem. Our priority is to help
small business in Eden-Monaro being strangled by the Howard Government’s red tape,
while ensuring super payments are made to hard working Australians,” Dr Kelly said.

The Bill will extend the late payment offset for employers so late contributions
will count towards reducing the SG charge. The net effect is that employers will no
longer have to pay twice.

The offset will be available to employers from the date of Royal Assent, including
to employers who have been assessed with the SG charge before this date, if their SG
charge remains unpaid.