Small business claims super disadvantage

small-business/COSBOA/superannuation/funds/SG-contributions/superannuation-guarantee/

3 August 2018
| By Mike |
image
image
expand image

The only people and groups which benefit from Australia’s superannuation system are the funds and their corporate and union stakeholders, according to the Council of Small Business Organisations of Australia (COSBOA).

In a follow-up submission to the Productivity Commission inquiry into superannuation competitiveness and efficiency the COSBOA has reinforced its argument that employers should either be removed from the superannuation guarantee (SG) collection process or be paid for the work they do in ensuring payment of SG contributions.

The submission described the obligation on employers to pay the guarantee as a “forced arrangement”.

“… this forced arrangement combined with the nature of the make-up of superannuation funds has created a collection process that creates confusion and inefficiencies for business and superannuation funds as well as for members of funds,” it said.

“It also provides opportunities for vested interests to manipulate the system to their advantage and to the disadvantage of members in their funds as well as to the employers forced to collect their contributions,” the submission said. “Indeed, the only individuals in the system who do not get paid for the work they do is the small business person who is also the only person who can get fined.”

“Furthermore, as discussed at the hearing, we believe the current threshold for payment of superannuation has been set at $450 earnings over a period of a month (in most cases) since the inception of the Superannuation Guarantee.,” it said. “This was originally determined based on the tax-free threshold; that threshold has now risen from what was around $5,000 to over $18,000.”

It said that, on this basis, the threshold had to rise to match that increase.

“We do note however that under our proposal to remove employers from the collection process that the idea of a threshold for earnings for superannuation to be paid becomes redundant,” the submission said. “We would like to reinforce that the current superannuation collection process is overly complicated and lacking in transparency for employers and employees. It seems that the only people or groups who benefit from the system are the funds and their corporate and union stakeholders.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS