Superannuation guarantee - a tax by any other name
Last week's High Court decision upholding the constitutional validity of the compulsory superannuation guarantee also validated the fact that it is a tax.
In examining the decision, law firm Blake Dawson pointed out that a key element in the High Court's decision was its status as a tax.
It said the focus of Roy Morgan's special leave application to the High Court was the distinction between a public purpose and a private purpose, on the basis that the superannuation guarantee charge is not a tax under section 51(ii) of the Constitution as it is not imposed for public purposes.
However the law firm's analysis said the majority of the High Court considered the SGC to be a valid tax on the basis that:
- the shortfall amounts payable by the Commissioner of Taxation for the benefit of the employee are payable out of the Consolidated Revenue Fund and this is conclusive evidence that the SGC is imposed for "public purposes"; and
- when an employer pays the SGC into the Consolidated Revenue Fund, the identity of the moneys is lost and the funds may be appropriated by the Commonwealth for any lawful purpose.
AUTHOR
Mike Taylor
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