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Thursday, 2 December 2004
Page: 157


Senator Brown asked the Minister representing the Treasurer, upon notice, on 18 November 2004:

With reference to the Australian Taxation Office (ATO) and the non-payment of superannuation contributions by small businesses: Why are employees not offered information or feedback on the progress of investigations they have initiated and likely outcomes that could help them with decisions regarding whether to continue their employment.


Senator Coonan (Minister for Communications, Information Technology and the Arts) —As the question deals with matters administered by the Australian Taxation Office, I have asked the Commissioner of Taxation for advice. The advice in relation to the honourable senator's question is as follows:

Cases where employees are concerned that their superannuation entitlements have not been met are investigated by the Australian Taxation Office (ATO) as an integral part of the ATO's compliance strategy.

The process of establishing whether an employer has met their obligations under the superannuation guarantee legislation can be lengthy. This is because it may involve any of the following actions:

obtaining information by writing to the employer;

undertaking a field audit of the employer;

prosecuting the employer if the necessary information is not supplied;

raising a default assessment if a statement has not been lodged and we have to gather sufficient information to raise an assessment; and/or

undertaking legal recovery action if sufficient payments have not been made.

Moreover, as each case is different, the actions taken by the ATO may vary from case to case. As a consequence, it is not possible to advise on likely outcomes for employees where the ATO is investigating an employer for possible breaches of their superannuation guarantee obligations.

In addition, the secrecy provisions contained in section 45 of the Superannuation Guarantee (Administration) Act 1992 (SGAA) impose an obligation of secrecy on persons who acquire information on the affairs of another person. As the superannuation guarantee charge imposed on an employer is a tax, and in accordance with other tax obligations, the ATO is unable to discuss an employer's possible SGC tax obligation with a third party (that is, an employee).

While the ATO is bound by certain secrecy provisions, the nature of the superannuation guarantee charge requires the ATO to consider the competing interests of the two parties - the employee's interest in the outcome and the employer's right to have the ATO act confidentially in regard to their taxation and financial affairs.

To this end the ATO provides the employee with information in the following circumstances:

where sufficient superannuation contributions had been made by the employer and the details of the superannuation fund to which the contributions had been made is known, then these details could be passed on to the employee;

where the employer has both lodged a superannuation guarantee statement and made a payment of the superannuation guarantee charge, the employee can be advised of the amount of this payment and if the Commissioner is satisfied that the account belongs to the employee, he will deposit the entitlement directly into their superannuation account;

where the employer is insolvent/bankrupt and the ATO has received advice from an Official Receiver in Bankruptcy or the liquidator as to the extent of the likely distribution, then this information is passed on to the employee.