IPA says SG penalty regime too harsh

28 February 2017
| By Mike |
image
image
expand image

The current onerous penalty regime relating to superannuation guarantee (SG) non-payment has done little to address the problem and may have actually made it worse, according to the Institute of Public Accountants (IPA).

In a submission to the Senate Economics Committee inquiry into non-payment of the SG, the IPA has argued that the penalties might very often be “disproportionate to the mischief”.

“The harshness of the penalty regime can lead to further noncompliance delays, i.e. employers further delaying making superannuation contributions,” it said.

“The current onerous penalty regime has done little to address the problem of unpaid superannuation guarantee remittances which some experts are claiming is worsening. Moreover these punitive penalties have a significant impact on small businesses which are often late in meeting their SG obligations due to cashflow problems and not because of any more sinister intentions,” the IPA submission said.

It pointed out that small businesses did not have access to the same financial resources compared with larger businesses, stating: “Due to limited access to funds, one option they have is to delay payment of employee obligations”.

The IPA submission said that while its members strongly discouraged this practice, “for many small businesses it is a harsh reality”.

“Whilst a penalty regime is required as a deterrent to ensure employers meet their statutory employee obligations, the harshness of the current regime is considered excessive especially for the small business sector,” it said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year ago
Kevin Gorman

Super director remuneration ...

1 year ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year ago

The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation ...

10 hours ago

Super funds had a “tremendous month” in November, according to new data....

4 days 9 hours ago

Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion....

4 days 14 hours ago