Treasury Laws Amendment (Payday Superannuation) Bill 2025, Superannuation Guarantee Charge Amendment Bill 2025
Ms MILLER-FROST (Boothby) (17:08): This is yet one more plank in the platform to enable Australians to earn more and keep more of what they earn: payday superannuation. Being paid your super when you get paid, not months later, seems like such a simple change, and yet it is so powerful. It will mean that more Australians will receive the retirement savings that they are owed sooner and more reliably.
Labor is the party of superannuation. We introduced compulsory super to ensure that Australians could enjoy a secure retirement. It was a groundbreaking change that has made Australians the envy of the world, giving Australian retirees a better retirement and also taking pressure off taxpayers through reducing the demand on the age pension system.
We know those opposite hate superannuation. I've never really understood why. Fundamentally, superannuation is people helping themselves, securing their future.
Those opposite have tried to wind it back. They tried to undermine it. They tried to make people raid their superannuation as recently as the last election, when they wanted young people—people who, by definition, have low superannuation balances by virtue of their short time in the workforce and the most to lose in terms of the interest they can potentially earn over the next decades—to raid their super to get a housing deposit.
They want young Australians to trade their future retirement to buy a home, furthering the wealth transfer from young people, not to them. On this side of the House, Labor will always protect superannuation. Not only that—we will also strive to make it better and fairer.
Under this Labor government, we've increased employer contributions to worker superannuation to 12 per cent. Under this Labor government, we're establishing superannuation on paid parental leave. This mostly affects women.
I've spoken in this place about my experience running a women's homelessness service. No matter why you become homeless, the one thing everyone experiencing homelessness has in common is poverty. The women who turned up to Catherine House frequently had either no superannuation or very little, at least in part because of the gaps in paying into their superannuation while on parental leave.
This Labor government is also moving to increase the low-income superannuation tax offset, the LISTO, to further address inequities in superannuation benefits, particularly assisting young people and women. Now, with this change, which really shouldn't be controversial, whether your money is in your pay packet or your superannuation contribution, your money still belongs to you, the worker.
Requiring it to be paid into your superannuation account when you get paid is surely not an outrageous proposition. Indeed, when I posted this issue on social media, I had a number of employers, small-business owners who are friends, comment that they already pay superannuation on payday. They found it simpler and easier to just get it all done at the same time in one payroll process rather than creating another process they needed to do on a quarterly basis.
But we realise that for some employers this adjustment will take time, so it will be implemented from July 2026, and the ATO will not target genuine errors. One of the core pillars of a fair retirement income system is that workers, no matter their job, employer or pay cycle, receive their entitlements in a timely manner. In Australia's superannuation system the compulsory employer contribution mechanism, the superannuation guarantee, has been central.
Under the existing system employers are required to pay superannuation contributions at the longest period, at the end of each quarter, rather than at each pay cycle. The result is a timing gap that allows for unpaid, late or missing superannuation contributions. That matters.
Every extra day you have superannuation in your account means extra compounding interest. Not only that—the delays in superannuation payments mean it takes longer to realise if your superannuation isn't being paid or isn't being paid correctly. According to the latest estimates, the Australian Taxation Office currently considers that, in the most recent financial year data, around $5.2 billion worth of superannuation went unpaid.
That's $100 million every week earned by workers but not paid to them. This bill responds directly to that problem. It mandates that, from 1 July 2026, employers must have superannuation contributions reach employee super funds within seven business days of payday, aligning contributions with salary or wage payments.
Who will this benefit the most? Young people, women, people working casual or part-time jobs, those in insecure work and people who change jobs frequently. These reforms strike at what many workers may miss out on over their working lives.
The government has estimated that for the average 25-year-old this will mean an additional $6,000 in today's dollars in their retirement income. The average 35-year-old with unclaimed super will see the equivalent of $32,000 extra in today's dollars in their retirement balance. That is a significant amount of retirement funding.
Not only that—it's the fair and just thing to do. It's their money. They earned it.
In sum, the bill ensures fairness, strengthens our retirement income system and modernises the contribution regime for the 21st-century labour market. The government's decision to bring in payday super is deeply rooted in fairness and long-term retirement outcomes. Firstly, it's making the most of compound interest.
With contributions being paid earlier and more frequently, workers' superannuation balances will begin accruing investment earnings sooner. Secondly, it addresses inequality and vulnerability, because the unpaid super problem falls disproportionately on more vulnerable workers—those in casual or insecure employment, women, younger workers and those who change jobs frequently.
The reform helps level the playing field. Thirdly, it strengthens trust in the superannuation system. Large sums of unpaid or late super contributions undermine confidence that the system is working for all.
By tightening the rules and aligning contributions with paydays, the bill reinforces the legitimacy of Australia's retirement income system. Fourthly, it reduces administrative and detection lag. Under the current quarterly system, unpaid contributions may remain undetected for months, if they are detected at all.
By linking contributions with paydays and aligning reporting, the ATO can more quickly identify and address shortfalls. Employers will be required to ensure that superannuation contributions have been received into the employee's super fund within seven days of payday. While I mentioned previously that a number of employers do already pay super on payday, the requirement will start in July 2026, and the ATO will not target genuine errors as businesses transition to the new model.
Let me reiterate some of the specific benefits this reform offers. For employees, there will be earlier receipt of contributions and more time in the fund—so more compound interest, meaning better overall retirement incomes. Also, it will be easier for them to check whether their superannuation has been paid on time and correctly—or, in fact, at all.
And, of course, there will be a better funded retirement in their future. For superannuation funds and the industry, there will be improved cash flow and allocation timing, fewer late clearing issues, clearer reporting and less backlog of outstanding contributions. The pre-eminent industry body, the Financial Services Council, has welcomed the bill, noting that the move to seven business days rather than calendar days was a constructive change in response to stakeholder input.
For employers, there will be a simpler system as part of their standard payroll processes rather than having to have an additional process to pay superannuation. For our future Australia, there will be better funded, more secure retirement income, meaning a lower requirement on the taxpayer funded age pension. For the system overall, there will be higher confidence in the superannuation system, an improved compliance environment, a reduced pool of unpaid contributions, and strengthened retirement incomes across the 50-plus age groups and younger workers.
Small businesses will receive support in relation to the compliance burden. Small-business owners may require additional support and guidance and perhaps phased implementation assistance. The government and industry groups will work closely to support businesses through the transition, particularly where there are multiple pay cycles, seasonal variations or tight cash flows.
We live in a rapidly changing world of work, with more frequent pay cycles; more casual, part-time or gig-type employment; and greater job mobility. The quarterly superannuation guarantee payment regime was designed in an era of more stable employment and fixed pay cycles. It does not fully align with the contemporary reality.
By bringing super contribution timing into alignment with pay cycles, we are modernising our system. We are addressing the drag on retirement outcomes caused by delayed contributions, especially for younger workers, who may lose the greatest portion of lifetime compounding if contributions are late or missing. Moreover, with Australia's population ageing and having longer life spans, ensuring that superannuation is effective, equitable and timely is a matter of economic and social policy.
The stronger the retirement savings base of individuals, the less pressure on the public age pension and therefore on future taxpayers; the better the economic participation of older Australians; and the more resilient our fiscal future. The Treasury Laws Amendment (Payday Superannuation) Bill 2025 is a landmark reform for our nation's retirement income system.
It combines fairness, efficiency and modernisation. It ensures that workers, especially those who are younger, less secure in employment or changing jobs frequently, get what they are owed: superannuation contributions made promptly and fairly. Implementing contributions at or close to payday transforms the way super works in practice.
It reduces the opportunity for unpaid or late contributions, strengthens enforcement, enhances confidence and ultimately ensures Australians retire with more savings. Yes, there are challenges in transition. Yes, the government expects the business community needs time, clarity and support.
But the lead time to 1 July 2026 gives a clear, date-certain horizon, the risk based approach by the ATO offers a sensible compliance framework, and the shift to seven business days shows that we've listened and adjusted in response to stakeholder feedback. In supporting this bill, we reaffirm our commitment to ensuring that the retirement income system works for all Australians and that hard work over a lifetime is rewarded with dignity, security and financial independence in retirement.
I commend the bill to the House.