Submission to Securing Australians' Superannuation consultation paper

30 November 2023

The Business Council of Australia (BCA) welcomes the opportunity to make this submission to the consultation paper on Securing Australians' Superannuation. 

The BCA supports the intent behind the government's proposal to legislate for employers to pay their employees' Superannuation Guarantee (SG) contributions at the same time that they pay salary and wages from 1 July 2026.

The proposed measures will ensure more timely payment of superannuation benefits, increasing superannuation balances and retirement benefits. This is particularly important given the increases in the compulsory contribution rate under current legislation, rising to 12 per cent by 1 July 2025. The measures will give employees greater visibility over whether contributions have been paid. Most importantly, they will reduce the exposure of employee superannuation benefits to potential insolvencies, particularly on the part of small business.

Large employers are already overwhelmingly compliant with their SG payment obligations and make payments of superannuation entitlements in a manner generally consistent with the proposed payday super models canvassed in the consultation paper. Most medium to larger size businesses pay superannuation monthly and transitioning to fortnightly payment should not be overly burdensome. The move to payday super will be a much bigger challenge for small to medium size businesses that currently take advantage of the flexibility to pay superannuation entitlements quarterly.

The proposed compliance framework will also create incentives to address some of structural issues with the SG system that are partly responsible for unpaid SG contributions. The transition to payday superannuation is an opportunity to capture efficiencies from aligning superannuation payments with the payment of wages and salaries and improve the efficiency of the payment and reporting of SG contributions. Capturing these efficiencies will also require significant government investment in the automation of payment platforms and better linking administrative data. Changes to the existing payment model should avoid introducing risks and costs for employers who are already payday compliant under the existing framework.

It is important that employer obligations under the proposed framework do not leave them exposed to penalties for circumstances beyond their effective control. This requires clear but flexible definitions around how and that are consistent with other legislation, including employer obligations under the Fair Work Act. It is also important that the chosen model minimises compliance burdens for employers.

The BCA note that the time given for this consultation is inadequate, a point made by numerous stakeholders, particularly given the proposed measures do not commence until 1 July 2026 and implementing legislation will not be finalised until after the 2024 - 1 The BCA urges the Government to keep this consultation process open for an additional month. The draft legislation expected to go out for consultation in the September quarter 2024 must include a longer than usual consultation period given the critical importance of this legislation in defining and operationalising the policy options canvassed in this consultation.

You can read our full submission here. 


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