The superannuation system that exists today is vastly different to the
system that existed in 1992 when the superannuation guarantee (SG) was
legislated. However, the legislation governing the administration of the SG
remains largely unchanged.
In 2015-16 employer contributions to superannuation totalled $89.6
billion. This total has progressively grown from about $62 billion in 2006-07.
The total size of funds under management in the superannuation system
has grown from around $150 billion in March 1992
to over $2 trillion dollars in 2017.
The growth in the size and significance of the superannuation system to
both individuals and the Australian economy more broadly has been primarily as
a result of successive government decisions to compel Australians to forgo a
substantial proportion of their pay today in order to save for their
The Turnbull Government believes it is imperative that the legislation
governing the system is modernised, with well-governed standards of oversight
and accountability as its foundation.
Given the importance of superannuation savings on the lives of
Australians living in retirement, the Turnbull Government takes employer
non-compliance with their SG obligations very seriously.
In December 2016, the Government established an interdepartmental
working group to investigate community concerns and develop practical
recommendations reporting to the Minister for Revenue and Financial Services to
deal with SG non‑compliance. The Government is considering this report.
Senator Hume wishes to highlight evidence provided to the committee by
the ATO in its submission that the research referred to extensively during the inquiry
by the superannuation industry lobby group, Industry Super Australia (ISA), was
likely to substantially overstate the prevalence of SG underpayment:
We do not consider the number of people identified with an
amount of SG underpayment in the ISA report to be reliable...
...the adjustments for OTE used in the report are insufficient
to account for the differences seen with employment models and work practices
across various broad industries. This means the report substantially overstates
the prevalence of SG underpayments.
Senator Hume notes the breadth of issues raised during the course of
this inquiry and the Committee’s recommendations. However, some recommendations
made by the Committee are, in the view of Senator Hume, beyond the scope of the
Terms of Reference.
Recommendations 3, 5, 7, 8, 9, 11, 14, 15 and 18 are considered by
Senator Hume to be beyond the scope of the terms of reference of this inquiry.
Senator Hume recognises that the issue raised in the Chair's report
under recommendation 3 is an important one and believes that the Turnbull
Government should examine it in the near future.
Senator Jane Hume
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