Black money crackdown should focus on SG
Industry Super Australia and Cbus Super have urged the Federal Government to make non-compliance with the superannuation guarantee (SG) in the cash economy a focus as part of its Black Economy Taskforce.
In welcoming the Turnbull Government's appointment of the taskforce that is to be chaired by former chair of the B20 anti-corruption taskforce, Michael Andrew, the ISA and Cbus Super referred to recent modelling by Tria Investment Partners for Cbus Super, which found that workers in the cash economy lost an estimated $800 million in unpaid super in 2014.
The Tria report used data from the Australian Taxation Office (ATO), the Australian Bureau of Statistics (ABS), Reserve Bank of Australia (RBA), and Fair Work Australia to find that 277,000 workers employed in the cash economy did not receive their entitled super, which totalled losses of $2,888 on average for each affected worker, or more than seven months of super contributions. Construction was the most affected industry within the cash economy.
ISA chief executive, David Whiteley, said: "It's not just super that workers in the black economy are missing out on, they're also losing life and disability insurance cover that comes with superannuation".
"This inquiry will provide some support for the small and medium sized companies who are looking after their workers while competing against bosses cutting corners," he said.
Minister for Revenue and Financial Services, Kelly O'Dwyer, announced the measures this week, adding that while there was no universal definition of the black economy, it usually referred to those who operated out of the tax system or those who were known to the tax system but misreported their tax and super obligations.
The taskforce would provide an interim report to Government in March 2017, and participants of the taskforce would include the RBA, the Australian Federal Police, the Australian Securities and Investments Commission (ASIC), the Australian Prudential Regulation Authority (APRA), AUSTRAC, and the Departments of Human Services and Immigration.
The ATO's internal risk assessment showed as many as 11 to 20 per cent of employers could be non-compliant with their SG obligations, according to the Commonwealth Auditor-General's 2015 report on compliance with super.
AUTHOR
Malavika Santhebennur
Recommended for you
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
