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Wednesday, 8 December 2004
Page: 113

Senator CHERRY (5:18 PM) —I want to express my disappointment with the attitude of the government to these amendments and my disappointment that the Senate will not be insisting on them. The issue of whether this bill is necessary is one the Senate needs to consider very carefully. True, I suppose, we have to acknowledge that some businesses have complained about the compliance costs of reporting to their employees on a quarterly basis about how much superannuation they pay. But what is wrong with that? What is wrong with saying to employers, `Good practice is telling your employees four times a year how much super they are being paid and where it is being paid to'? Surely that is what you would call minimum good practice by an employer.

In the first 10 years of the SG there were 45,000 complaints by employees to the tax office about unfunded superannuation guarantee payments. The measure we are putting in place with this bill is going to make it harder for people in the future to be able to track whether their superannuation guarantee is being paid or not. Yes, the quarterly payment into the super fund continues. But, really, if it is not being paid and you are not being told, it becomes much harder to track.

Senator Sherry missed the debate last night. When this bill was announced by the government last July the Financial Review editorial described it as `political opportunism'. That is what it is. It goes backwards in terms of improving the safety and security of our superannuation system, giving workers the information they need to protect their superannuation and ensuring that workers can track what is happening to their superannuation. We acknowledged, given the government wanted to reduce compliance costs, that we should look at that issue. We went back and looked at the explanatory memorandum the government produced with this bill, which asserted that awards and state legislation require superannuation to be on pay slips. According to the ACTU's submission to the inquiry into this bill, that particular assertion was grossly overstated in that a lot of awards do not require that at all and state legislation only requires the amount and not the fund to be stated on the pay slip.

But we thought, okay, given the government is saying that we do not need this reporting requirement because it is on pay slips, let us say that if it is on a pay slip then that reporting requirement is met. By that simple amendment you reduce the compliance costs of the current law by half and probably by two-thirds or three-quarters. In doing so, you are encouraging employers to aspire to a best practice human management technique, which is telling their employees on their pay slips, comprehensively, at least once a quarter, how they are going in terms of their superannuation. From that point of view we thought it was a reasonable amendment and we thought the ALP's proposals to make the tax office a bit more assertive in pursuing SG or collecting the data was reasonable as well.

I am surprised by Senator Sherry's statement that he will not insist on these amendments because this bill needs to go through. I would remind Senator Sherry of his own `superannuation: a safer system' policy released only a few months ago. It does seem like a long time ago, but a few months ago it said:

All contributions, made by either the employer or the employee, are included on an employee's pay slip at the time of payment.

That is what we are essentially saying here. That is what we are trying to encourage—best practice to ensure that superannuation becomes regularly reported in pay slips and, as a result, becomes a reporting mechanism. I think that the amendment that we moved achieves the outcome that we wanted of ensuring that employees know what is happening to their super, while significantly reducing the compliance costs of the bill introduced some 18 months ago into this place which introduced quarterly reporting. That is the sort of approach we would like the government to consider rather than this sledgehammer to crack a walnut approach. A couple of businesses that do not follow best practice human resource management practices complain and, as a result, suddenly all the employees about to face choice of fund lose vital information that allows them to track their superannuation.

Why do we not look at something more reasonable, something that tries to balance compliance costs on the one side with benefits to the employees on the other? I note—and this was also noteworthy when the original bill was debated in this chamber 18 months ago—that there were, in fact, substantial benefits to employers in quarterly reporting. On the introduction of the quarterly reporting bill back in 2002, the government senators, in their report on the bill, said:

... employers may also benefit from the measure, including from reduced administration costs associated with quarterly rather than annual contributions. In particular, benefits may result from the potential for:

achieving interest savings that could result from the accrual of smaller SG shortfall amounts over a quarter rather than over a full year;

receiving early warning of possible problems regarding the level of contributions and the opportunity to rectify these leading to reduced SGC payable over the year; and

developing better business practices, especially by small business, and thereby avoiding large annual outlays.

Another benefit that the government senators noted at the time was that it would be about:

improving employees knowledge and understanding of their superannuation entitlements resulting in the potential for early notification of difficulties regarding payment of contributions and incentives for consolidation of disparate contributions.

All of those are important benefits, yet apparently in the new-look Liberal Party it is all one way: business gets the benefits but any costs associated with that have to be downplayed and got rid of; they are unnecessary. If that is the basis for balance, I shall be pleased to leave this place in July because, in some respects, it will be tragic to see coming forward these sorts of provisions that are so unbalanced against the interests of ordinary Australians—the so-called `battlers' who voted for the Howard government—and so unbalanced in the favour of business, even in the face of clear evidence that the provisions are needed. There have been 45,000 complaints in 10 years. Surely we should be trying to reduce that. Surely we should be trying to make efforts, as the then Minister for Revenue and Assistant Treasurer said in her second reading speech when introducing theses measures 18 months ago, to reduce the incidence of lost accounts.

I am disappointed that the Senate tonight has not received support from the government for these amendments. I think they are reasonable. I think they are appropriate. They try to take the intent of the government's legislation, as reflected in the explanatory memorandum, give it some real meaning and make it work for both employees and employers. Surely that is what a government of balance is about, not being totally and utterly one eyed in standing up for the interests of the squeakiest wheel in the small business sector. From that point of view, I think that at the end of the next three years we will see workers much worse off than they are now, and Australia much worse off. Certainly, this measure is going to make it much harder for choice of funds to be successful in July. That disappoints me because I supported that legislation.

The Democrats will be opposing this motion. We believe these amendments should be insisted upon and we would certainly ask the minister to seriously consider withdrawing her motion at this stage and considering a proposition that finds a reasonable compromise on this. To insist on removing a reasonable reporting mechanism that the government knew was necessary 18 months ago, that all of industry says is necessary and that the evidence from the statistics of the tax office says is necessary certainly is, in my view, a retrograde step.