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ATO drives up unemployment: Labor needs to act.

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Thu, 29th January 2009

ATO DRIVES UP UNEMPLOYMENT - LABOR NEEDS TO ACT Mr Steven Ciobo MP Shadow Minister for Small Business, Independent Contractors, Tourism and the Arts

An Australia Taxation Office (ATO) draft superannuation ruling would lead to hundreds, if not thousands of job losses, Shadow Minister for Small Business, Steven Ciobo said.

The ATO Draft Superannuation Guarantee Ruling, expected to apply from 1 July 2009, will impose the superannuation levy on overtime and paid parental leave, forcing employment costs to surge.

“This draft ruling could not come at a worse time for small business, driving up employment costs and directly threatening jobs,” Mr Ciobo said.

“The Rudd Labor Government constantly talks about acting swiftly and decisively and being concerned about employment. Yet Labor has been silent on this new ATO ruling. The Government needs to wake up and unambiguously rule out the changes proposed by the ATO.

“Labor’s focus should be on maintaining and creating jobs and keeping business costs down. Labor appears set to allow this massive increase in small business costs and happy to pretend it won’t affect jobs.

“At a time when many small businesses are already struggling to manage their cash flow, this draft ruling will force small businesses to fork out additional payments which will massively increase their labour costs.

“It will cost industry an exorbitant amount of money to pay superannuation on regular overtime earnings, leading to reduced industry competitiveness and greater unemployment.

“The Australian Industry Group estimate the cost to industry to pay superannuation on regular overtime earnings would exceed $1 billion per annum.

“The ATO should abandon this idea immediately and listen to the concerns of Australia 2.4 million small businesses who are already looking at reducing employment to lower operating costs.

“The draft ruling would also include maternity and paternity leave payments in ordinary time earnings, meaning superannuation would apply to paid parental leave from 1 July 2009.

“Based on an average wage and 12 weeks maternity leave, this would cost small business owners an additional $1,239 for each employee taking paid parental leave.

“While some small businesses can choose to offer superannuation to overtime and paid parental leave, it should by no means be made compulsory.

“Australian small businesses are facing tough economic conditions and Labor needs to show some leadership and rule out these massive increases in labour costs.”

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