The amnesty offer applies for the 12 months from today (24 May) and according to Minister for Revenue and Financial Services Kelly O’Dwyer, incentivises employers to “do the right thing”.
Employers who have historical underpaid super will have to pay out the owed super in full, including the higher rate of nominal interest, but will sidestep the penalties for late payment.
“We are introducing this one‑off amnesty to allow employers to wipe the slate clean and pay their workers what they’re owed. All Australians workers should be paid the entitlements they are owed,” Ms O’Dwyer said.
Employers who choose against using the amnesty will be stung with higher penalties, she added. These include fines of 50 per cent of the super owed in addition to payment of the withheld monies.
“The Australian Taxation Office (ATO) estimates that in 2014‑15, around $2.85 billion in SG payments went unpaid,” Ms O’Dwyer said.
“While this represents a 95 per cent compliance rate, any level of non‑compliance is unacceptable.”
Ms O’Dwyer said the amnesty is the latest in a number of packages designed to protect workers’ superannuation, and will be supported by the ATO’s ability to seek court-ordered penalties for non-compliant employers.
It will also be supported by the requirement that funds report contributions at least monthly to the ATO.
Dana Fleming, a tax partner with KPMG, argued last year that this requirement was "arguably the most powerful" tool against non-compliant employers.
However, even these reforms may not go far enough against the broader challenge of a changing labour landscape. According to research commissioned by Cbus and AustralianSuper, the $10 billion of super that casual and part-time workers aren't receiving could balloon to $23 billion by 2027.
AustralianSuper strategic policy advocate Louise du Pre-Alba told the Senate committee on the future of work a possible solution was for self-employed workers to be required to pay their own super. As it stands, it's assumed workers in the casual workforce, gig-economy and small business owners are paying their own super.
"However, the evidence to date suggests that this is not happening enough to justify the current approach. Fewer than 4,000 taxpayers access small-business CGT concessions annually and only 1,000 of those utilise the CGT retirement exemptions by directing part or all of those proceeds to super,” Ms du Pre-Alba said.
She argued a compulsory level of self-provisioning of super by these workers should be law, but conceded the execution of this policy would be difficult.