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Employers to face goal if they get Super choice wrong.

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Sh ad ow Mi ni st er for Fin ance & Su p er ann u at i on

Shadow Minister for Small Business


Press Release

Embargoed until 11.30am, 3 May 2005. 3 May 2005


Two years goal and/or a $22,000 fine are the penalties employers face if they advise employees outside the terms of the Choice of Super law.

Small businesses are being urged to lobby the Government to be exempt from Super Choice legislation for fear they will face hefty fines and a possible gaol term if they fail to comply with new laws.

Shadow Minister for Small Business, Tony Burke and Shadow Minister for Finance and Superannuation, Nick Sherry today said that it was important all small business owners push the Howard Government for the exemption as the penalties are too harsh for any mistakes that may be made.

Mr Burke said the penalties were over the top, harsh, excessive and unnecessary.

Senator Sherry said that the penalties are a result of the application of the FSR Act that applies to any person who gives advice who is not licensed to do so.

“Most employers are not licensed financial planners nor likely to be so,” said Senator Sherry.

“It is a certainty that some of the 5 million employees will ask their employer for advice about what to do and some employers will give advice in breach of the FSR. While employers should not give advice, it is understandable that some will do so.”

“This sledge-hammer penalty should be removed from all employers,” Senator Sherry said.

Mr Burke said Super Choice is incredibly complicated and the Howard Government’s demand that employers be across the new legislation by 1 July is unreasonable.

“If an employer fails to understand or comply with the process, they will be lumped with a $500 fine for each employee,” said Mr Burke.

“Many small business owners are unsure of how to cope with the additional workload necessary to offer choice of super fund and they will be the ones most vulnerable.

“The Howard Government said it would cut red tape for small business. It would be a good start if they stopped making it worse.

“And the Howard Government has not even finalised the Bill and regulations with only 48 days to the July 1 start-up.”

For further information contact: Nick Sherry 0418482807 or Maria Iannotti 0408274696.