Bills Digest No. 53, 2004–05
Tax Laws Amendment (Superannuation Reporting) Bill
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
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Amendment (Superannuation Reporting) Bill 2004
This Bill removes the requirement
for employers to report to employees the amount of employer s
Superannuation Guarantee (SG) contribution.
Generally, superannuation is a tax-effective investment vehicle
accumulating resources for retirement purposes. Superannuation s
legislative framework is complex as it is governed by prudential,
taxation, contributions, end benefit and disclosure legislation and
regulations. Frequent legislative changes compound the system's
complexity. In addition, the superannuation system constantly
changes as many of the financial thresholds are indexed to various
economic indices, such as the consumer price index or the average
weekly ordinary time earnings.(1)
The SG scheme requires all employers to provide a minimum level
of superannuation support in each financial year for their
employees. The scheme operates together with superannuation paid as
a condition under industrial awards so that an employer s
contribution may be counted as satisfying their SG obligations. The
minimum level of employer support is 9 per cent of employee s
earnings.(2) Contributions are required to be made on a
quarterly basis, although employers are not prevented from making
more frequent contributions.(3)
The obligation to make quarterly payments was implemented at the
same time as the requirement for employers to report to the
employees about their SG contributions. Both were part of
superannuation reforms stemming from the Liberal Party s 2001
election campaign statement A Better Superannuation
The obligation of employers to report to employees on the amount
of their SG contributions is contained in section 23A of the
Superannuation Guarantee (Administration) Act 1992 (SGAA).
This provision was inserted into the SGAA by the Taxation Laws
Amendment (Superannuation) Act (No. 2) 2002 (TLASA) and became
effective on 1 July 2003.
The reporting obligation was designed to both:
increase an employees interest in and involvement with their
superannuation payments; and
give a more timely flow of information so that the member,
and/or the Australian Tax Office (ATO), could take earlier action
should the SG payments not be made.(5)
This Bill enacts the Government s policy of reducing the
compliance burden faced by small business. The specific commitment
to remove the requirement for employers to provide reports on SG
contributions to employees was made in the statement Committed
to Small Business of 6 July 2004. (6)
The Association of Superannuation Funds of Australia
(ASFA) strongly opposes the repeal of section 23A of the SGAA. In a
recent press release, ASFA noted that:
The government s proposal to abolish quarterly
reporting by employers of superannuation payments from January 1
2005, will be a serious impediment to workers, and could also
jeopardise the safety of super, when choice of fund is introduced
next year, . This move is aimed at making life easier for
employers, and small employers in particular, but reducing
employees rights and information is certainly not the way to go [
ASFA is concerned that the removal of any requirement for
employers to report on their SG contributions to employees will
lessen the degree of control that employees can exercise over their
superannuation benefits in the accumulation phase. In ASFA s view,
this appears to contradict the outcome achieved by the
Superannuation Legislation Amendment (Choice of Superannuation
Funds) Act 2004 (the Choice Legislation), which comes into
force on 1 July 2005.(8) In ASFA s view, one of the
outcome s of the Choice legislation was to increase the amount of
control an employee has over their superannuation. Any development
that potentially reduces this control runs counter to the outcome
of the Choice legislation.
The Investment and Financial Services Association (ISFA)
understands the need to reduce the compliance burden on small
business. However, ISFA still believes Australian s should know
where their super is paid and be in control of that process, if
The Australian Consumers Association is concerned that any
reduction in the flow of information to the employee will reduce
the employer s accountability.(10)
The Australian Institute of Superannuation Trustees considers
the proposed removal of the reporting requirement to be regrettable
and retrograde .(11)
The Australian Council of Trade Unions has expressed concern
that the ability to collect outstanding contributions will be
further reduced by the proposed change, and that the current
mechanisms for enforcing compliance with the requirement to pay SG
monies to employees are far from satisfactory.(12)
However, the Australian Chamber of Commerce and Industry
believes that the proposed change will not prejudice employees, as
employers must still make SG payments on a quarterly basis and the
employee may approach their superannuation fund at any time to gain
information on their employers SG contributions made on their
The proposed measure will reduce both the costs and compliance
burden associated with reporting to employees on the employers SG
contributions. A significant proportion of employees will still
receive information about their superannuation entitlements at
quarterly intervals under a combination of existing superannuation
workplace and industrial relations legislation. Further, members
may approach their superannuation fund at any time and request
information about the contributions received on their behalf by
The main argument against the repeal of section 23A of the SGAA
is that it will lessen the flow of timely information to members
and thereby reduce the opportunity for appropriate action to
enforce compliance with the requirements of that Act by either the
member, or the ATO. Further, it is argued that this reduced flow of
information will increase public disengagement from superannuation
and lead to a greater amount of superannuation being placed in the
lost category , especially for casual employees.(if any)
Schedule 1 of the Bill repeals section 23A of the SGAA with
effect from 1 January 2005.
The issue of employees receiving timely information has been
addressed by the Government. In his second reading speech, The
Minister for Revenue and Assistant Treasurer, Mr Mal Brough MP
Employees will still be provided with information
on at least an annual basis from their superannuation fund and many
will receive information more frequently on pay slips as required
by various Australian workplace legislation provisions and
Corporations Law and Regulations require that regular reports
are given by superannuation funds to their members on, amongst
other matters, the contributions on their behalf to their
fund(s).(15) These reports are required to be given on
an annual basis. Further, employees covered by Federal industrial
awards must receive notification of the amount of superannuation
contributions paid, and the fund they are paid to, on their
At the State level Victorian employees are covered by Federal
Workplace legislation. In Queensland and South Australia, only the
amount paid into a superannuation fund must be notified on an
employee s payslip.(17) The requirement for this
information to appear on payslips in other States is currently
In addition, once the Choice of Superannuation legislation comes
into force, most employees will know where their superannuation
payments are made. Either by choosing a fund where these payments
will be made, or if they do not nominate a fund, the employer must
inform them of the default fund into which these payments are made.
If the employer changes the default fund they must notify the
employee of any such change.(18)
Finally, a superannuation fund member can approach the fund
provider to provide information on their benefits, including any
contributions made under the SG regime. The fund provider must
comply with this request as soon as practicable.
While the proposed measure may contribute to an increasing
amount of lost superannuation, it is not the cause of the problem.
The ATO provides a free service to assist members in tracking down
any of their superannuation that may become lost due to frequent
changes in employment or any other
Any disadvantages arising from any reduction in the flow of
timely information to fund members must be balanced against the
reduction in costs and compliance burden for small (and other)
business by the removal of this reporting requirement. The cost
reduction is likely to be of greatest benefit to small business.
While the Government is clearly aiming to reduce the cost and
regulatory burden of the small business sector, the proposed change
will also benefit all other business sectors.
David Kehl, Taxation Laws Amendment (Superannuation) Bill (No.
2) 2002, Bills Digest, no. 31, Parliamentary Library, Canberra,
2002-03, p. 7.
Section 19(2) Superannuation Guarantee (Administration) Act
David Kehl, op. cit. p. 8.
Liberal Party of Australia, A Better Superannuation
System, Policy Statement, 5 November 2001, p. 9.
Senator Helen Coonan, Minister for Revenue and Assistant
Treasurer, Second reading speech: Taxation Laws Amendment
(Superannuation) Bill (No. 2) 2002 , Debates, Senate,
27 June 2002, p. 2962.
Joint statement by J. W. Howard, Prime Minister and J Hocky,
Minister for Industry, Tourism and Resources, Policy Statement,
Committed to Small Business, 6 July 2004, p. 17.
ASFA media release, Super Choice Handicapped Before It
Starts, 18 November 2004.
Under the Choice regime established by the Superannuation
Legislation Amendment (Choice of Superannuation Funds) Act
2004, members can nominate the superannuation fund to which
their SG and superannuation payments can be made. The employee s
ability to nominate a fund potentially increases the control they
have over those monies.
Bill Stanhope, Manager Government Relations, Investment and
Financial Services Association, interview with the author, 23
Catherine Wolthuizen, Australian Consumer s Association, quoted
in Peter Weeks, In the Dark, Australian Financial Review,
24 November 2004.
Andrew Whiley, Vice President of the Australian Institute of
Superannuation Trustees, quoted in Peter Weeks, In the
Dark, AFR 24 November 2004.
Sharan Burrow, President of the Australian Council of Trade
Unions in Peter Weeks, In the Dark, Australian Financial
Review, 24 November 2004.
Peter Hendy, Chief Executive, Australian Chamber of Commerce and
Industry, in Peter Weeks, In the Dark, Australian
Financial Review, 24 November 2004.
Mal Brough, Minister for Revenue and Assistant Treasurer, Second
reading speech: Tax Laws Amendment (Superannuation Reporting) Bill
2004, House of Representatives , Debates, 18 November
2004, p. 8.
The statutory reporting requirements for superannuation funds
(and any other financial product) are now placed in part 7.9 of the
Corporations Act 2001 and Division 5 of the
Corporations Law Regulations 2001. In respect to
superannuation funds, the reporting requirement to members about
their contributions is found in section 1017D of the
Corporations Act 2001.
Regulation 132B(1)(i) and 132E(1)(e), Federal Workplace
Relations Regulations 1996.
Queensland, section 370(i) Industrial Relations Act
1999, & South Australia, section 102(7)(b), Industrial
and Employee Relations Act 1994.
Sections 32N and 32P, Superannuation Legislation Amendment
(Choice of Superannuation Funds) Act 2004.
Sub sections 107C(2) and (8), Corporations Act
Go to http://www.ato.gov.au/super/
26 November 2004
Bills Digest Service
Information and Research Services
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© Commonwealth of Australia 2004
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