Quantcast
Saturday , November 18 2017
Breaking News
Home / International Customs / Australia / Australian Taxation office finds $17bn in superannuation missing over six years
Australian Taxation office finds $17bn in superannuation missing over six years

Australian Taxation office finds $17bn in superannuation missing over six years

CANBERRA: Australian workers have lost out on more than $17 billion in superannuation payments since 2009 from shonky operators and businesses now at the centre of a tax office probe. The Australian Taxation ­Office is tightening the net on small businesses and operators skimping on superannuation payments in the wake of its first superannuation guarantee audit, measuring the difference between super owed and super paid to workers.

Australian workers were short-changed more than $3.27bn in super payments during fiscal 2014-15, according to the study, with construction companies, retailers, food services and accommodation providers among the worst offenders. About 95 per cent of Australian employers did the right thing, ­according to ATO deputy commissioner superannuation James O’Halloran, but noncompliance was still eating into the retirement plans and financial stability of thousands of workers, he said. “Any level of non-payment ­impacts on an employee’s future,” Mr O’Halloran said. “It’s real money for real people.”

Small businesses with poor payroll systems and stretched teams were among the largest contributors to the gap, Mr O’Halloran said, as were companies that were short of cash. More than half the companies investigated for underpayment of superannuation were found to be insolvent by the time the ATO opened the case. The audit measured the gap in two ways, with a gross gap referring to the total value of underpayments, whereas the net gap represented the total amount of underpayments less the total value the ATO had been able to claw back through ­investigations. In fiscal 2015, the gross gap hit $3.27bn but ATO efforts to claw back underpayments brought in $414 million, bringing the net gap back to $2.85bn.

ATO enforcement efforts and investigations have returned more than $3bn to employees since 2010, but the agency is ­working to boost compliance alongside a new federal approach to bolster superannuation payments prompt­ed by estimates that unpaid super could total $5.6bn a year. Financial Services Minister Kelly O’Dwyer in July moved to amend legislation to stop companies from capitalising on a loophole that allowed them to reduce an employee’s super payment, if the employee had chosen to sacrifice a portion of their salary into their super. Industry Super Australia estimated that 360,000 employees were affected by this salary-­sacrifice loophole, costing about $1 billion a year. A separate study by former Treasury head Phil Gallagher last year estimated that unpaid superannuation could add up to almost $5.6bn a year and affect more than one third of workers. The ATO has argued that a “top-down” approach to calculating payments, which takes into account the effect of the black economy and other assumptions, reveals a smaller gap than identified by the Gallagher report. The ATO now has 150 staff working full-time to make sure superannuation obligations are paid, with cases coming to the agency through employee queries and through internal modelling that tracks thousands of companies and raises an alert when inconsistencies are found.