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Coalition’s super pledge gets mixed reviews

Friday, 3 June 2011 | By Michelle Hammond
The Federal Coalition has pledged to remove the “unpaid tax collector” status of small firms if it achieves government, in a move that has been welcomed by small business groups but dismissed by Labor.

 

If the Coalition is elected to government at the next election, leader Tony Abbott has pledged to offer small business the option to make compulsory super payments, on behalf of employees, directly to the Australian Taxation Office.

 

The payments would occur at the same time as they made their PAYG payments, which would mean a single cheque to a single agency, rather than making multiple payments to different super funds.

 

The ATO would then send the money to super funds, ending years of complaints from small business operators that they are forced to work unpaid for the Government by organising employees’ super.

 

In a bid to appeal to small businesspeople ahead of the next election, Abbott said the Coalition is always looking for ways to help small business get ahead.

 

“The Coalition understands that there is an increasing red tape burden on small business and this is a practical measure that will help reverse the trend,” Abbott says.

 

“Less paperwork means higher profits, boosted sales and more time with the family.”

 

The Opposition also believes the streamlined measure will help increase compliance with employer superannuation obligations because it will make it easier for employees to ensure their retirement money is being paid as it should.

 

Peter Strong, executive director of the Council of Small Business of Australia, described the move as the first real removal of red tape.

 

“Here is a focus on the 96% of employers in the country; today mines and other big businesses can get ignored just for once,” he says.

 

“The Liberal party has reclaimed its small business roots.  Tony Abbott made some great promises for small businesses at the last election and this announcement proves that the power and belief in small business… has definitely resurfaced.”

 

Strong says the collection of super funds has been a “bugbear” of small business for a long time.

 

“We have been forced to do the work of finance companies and we have been fined if we didn’t do that work,” he says.

 

“We have been the only people in the super system not paid for our time and effort and we are the only individuals who can be fined.”

 

But not everyone is as impressed as Strong, with Small Business Minister Nick Sherry describing Abbott’s announcement as “empty and hollow”.

 

“If [Abbott] had any idea about policy, he would have known a free superannuation clearing house already exists for small business employers and that he voted against its introduction last year,” Sherry says.

 

“Instead, Tony Abbott says yes to duplicating an initiative the Labor Government introduced on July 1, 2010 – the Small Business Superannuation Clearing House.”

 

Sherry says the SBSCH allows registered businesses to make their super contribution payments in one electronic transaction, and the clearing house then sends the contributions to the appropriate super funds.

 

“Once again, the Coalition shows their lack of economic credentials, blocking all our savings measures, promising Australians unfunded promises,” Sherry says.