The Australian Tax Office (ATO) has come under heavy criticism following a report by Industry Super Australia (ISA) that revealed high levels of unpaid super debt. According to ISA analysis, in the 2018-19 period, an estimated $940 million in superannuation was not paid to over 570,000 Queensland workers.
This represents more than a quarter of the Queensland workforce and averaged about $1,600 per person. It could result in some retiring with as much as $60,000 less in their accounts. The cumulative super debt is believed to have now surpassed $5.5 billion over the last six years. Workers in Griffith and Brisbane were found to be the most affected. The report further indicates that those with lower incomes and were young workers are also disproportionately affected, with the underpayments more prevalent in the hospitality industry and blue-collar jobs.
ISA’s chief executive, Bernie Dean, has asked the ATO and politicians to urgently address the matter. He said that report outlined a key recommendation on having employers mandated to pay super into workers’ accounts at the same time they paid wages as a means to fixing the problem.
This recommendation has apparently been known to federal politicians for years, though they have failed to act on it. He noted that due to many not paying super as they paid wages, workers found it difficult to keep track of their money and allowed for payments to fall through the cracks. He also said that the failure by politicians to not mandate these super payments was preventing millions from getting to those it was owed to.
Dean added that this behaviour was creating an unequal playing field as businesses that did comply with super payments were being undercut by competitors that were ripping their own employees off. He also expressed disappointment that though workers relied on the ATO to recover these monies, the recovery rate was at a paltry 12% for underpayments and that little was being done to punish these employers.
Other recommendations in the ISA report include lifting enforcement activity by the ATO and pushing it to issue and publicise penalties on dodgy employers that do not pay super. This move is intended to help act as a deterrent for any other employers considering following the same path. The report terms it as seeing “a cop on the beat”.
The report also encourages the empowerment of employees and representatives so they can pursue and recover unpaid super debts. It also recommends the extension of the Fair Entitlement Guarantee that would enable workers to recoup their savings should their employer go bust.
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