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Red tape day for small business: Mark II.

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Media Release

Nick Sherry Labor Senator for Tasmania Shadow Minister for Superannuation, Intergenerational Finance: Banking & Financial Services

Joel Fitzgibbon Federal Member for Hunter Shadow Assistant Treasurer Shadow Minister for Revenue, Small Business and Competition

June 30, 2006

Red Tape Day for Small Business - Mark II

Red Tape Day Mark II is tomorrow, July 1, for businesses under State Awards - predominantly small business.

It is the second stage of the Government’s “Super Choice” legislation, which will require a further 200,000 employers to adhere to the Government’s massive red tape requirements.

Employers in sectors such as restaurants, clubs, retail shops will need to hand out over one million forms.

This is a massive new red tape burden on small business with up to 34 costly and complex steps to comply with, including:

• Ongoing record keeping of the form hand out to employees to prove to the Australian Tax Office (ATO) it has been done. Inspection and enforcement to follow.

• Check that correct documentation from employees is received, in addition to the standard form, for payment to a nominated fund. • Check the nominated fund is a complying fund. • Payment to multiple super funds. There are thousands of different funds. Fund

nominated can be changed every 12 months. • Up to $500 per employee fine for non compliance • Two years' gaol and/or $22,000 fine if advice is given to employees, even if they

ask for it. • A default fund to provide payment for employees who do not select a fund.

All to be paid for by the employer - and this is only part of the new compliance burden.

Businesses with a high turn over of staff will be hardest hit by the new compliance burden.

Under a Labor Government all the Liberal Government's new costly, complex red tape will be swept away.

A "clearing house" will be established by the ATO to which small business can opt to make superannuation contributions if they wish, removing this costly burden to small business.

The Assistant Treasurer, Peter Dutton’s response to this COSBOA approved clearing house proposal …..“Kim Beazley announced a massive new bureaucracy to administer superannuation payments” ……. “What will this massive new bureaucracy cost, and how will it be paid for?”, shows Peter Dutton’s contempt for small business.

The Minister doesn’t mind forcing small business to pay the costs but baulks at the government having to pay it.

Once the employer opts to make payments to the ATO "clearing house" it will then pass on the contributions to the fund as authorised by an employee.

The $500 fines per employee and/or $22,000 penalty fine and/or two years' gaol for giving advice to employees will be removed.

Labor's plan will also be simpler for employees.

They will only need to lodge their choice of fund form once with the clearing house rather than each time they change employment.

Labor policy will significantly reduce red tape cost to small business.

It will make “super choice” easier, simpler and less costly

For more information contact: Nick Sherry 0418 482 807 or Brendan Long 0408 421 447