Treasury Laws Amendment (Payday Superannuation) Bill 2025, Superannuation Guarantee Charge Amendment Bill 2025

Dr GARLAND (Chisholm) (12:02): I rise today to speak proudly in support of the Treasury Laws Amendment (Payday Superannuation) Bill 2025. From 1 July next year, 2026, employers will be required to pay superannuation guarantee contributions at the same time as wages instead of quarterly. Payday super is a once-in-a-generation reform to fix unpaid super.

It will be good for workers, good for business and good for our economy. Put simply, it makes so much sense. According to the Super Members Council, 3.3 million Australians were not paid the superannuation they earned in 2022-23.

Of these, 850,000 were in my home state of Victoria. In my electorate of Chisholm, the council estimates that over 24,000 workers were underpaid an average of $1,500, totalling $36 million during that financial year. This is a huge amount of money that my community should have for their retirement.

This really could be considered a form of wage theft. This reform will help ensure that workers actually receive the superannuation they're owed when they're owed it. Of course we know that the superannuation system works because of compound interest, so the sooner workers have that money in their retirement accounts the more interest they will be able to accumulate.

I know from my time in the trade union movement, from meeting with representatives from the profit-to-member superannuation sector, who briefed me on employers not meeting their superannuation guarantee obligations, that this is a really big issue in this country. One of the big issues currently at play is that, under current arrangements, employers have 28 days following the end of the financial quarter to meet their obligations.

Now, as we know, a lot can happen within a business over a four-month period, and when a business does unfortunately go under it is too often the superannuation owed to workers that does not get paid. As highlighted in those previously quoted figures and from listening to contributions from others in this chamber, I know that this is a concern many hold. I know that many superannuation funds currently employ teams of staff to manage internal superannuation arrears processes, and they often also engage the services of third-party providers who specialise in following up superannuation contributions owed by employers.

Needless to say, that may not always be the best use of superannuation fund members' money, just to chase funds. As is well known, some of Australia's largest superannuation funds partner with many thousands of employers, and when a contribution for an employee is not received the question is: is it because the employer hasn't made the required payment or simply because the employee is no longer with the employer?

Under this change, employers must ensure that contributions are received by the employee's super fund within seven business days of payday. As I said earlier, this change is also good for business. Of course it's good for workers receiving their retirement entitlements, but it's also good for business, noting that many businesses already pay their super obligations in line with their payroll cycle.

For businesses that don't, this change will now remove that additional step they are currently required to undertake and will also help to smooth out their cash flow via smaller and more frequent contributions. Something we see, unfortunately, is that unpaid superannuation affects different people in our communities in disproportionate ways. It disproportionately affects younger workers and those in insecure work, and a lot of those workers tend to be women.

These are people who can least afford to miss out on their retirement savings, and this reform will make a really significant difference to their lives and their retirements. For a part-time or casual worker receiving their superannuation contributions quarterly, reconciling the amount of superannuation received against ordinary time earnings is unnecessarily complex and unnecessarily time consuming.

This change will make it easier for employees to track their super and for the ATO to detect missed payments earlier, before debts become unrecoverable. This is really important. In my previous career before entering this place, I spent a lot of time talking to younger workers about the importance of tracking super as soon as you start working.

I know retirement often seems a long way away for people just entering the workforce, but it is really important for people to track their superannuation from the start of their working lives, and this change will make it easier for people to do just that. This legislation also updates the superannuation guarantee charge, which is the penalty employers face when they fail to pay superannuation on time.

Under the new framework, the superannuation guarantee charge will apply for each payday an employer fails to pay superannuation in full and on time. The updated superannuation guarantee charge includes notional earnings, which compensates employees for the investment returns they missed out on due to late payment, which is so important; administrative uplift, an additional charge to reflect the cost of enforcement and to incentivise voluntary rectification, which can be reduced for employers who voluntarily disclose and have a good compliance history; and choice loading, an additional penalty if the employer fails to pay into the employee's chosen fund.

Employers who continue not to pay even after the ATO has raised a superannuation guarantee charge will face higher penalties of up to 50 per cent of the unpaid amount. These changes are designed to prompt employers to fix mistakes quickly and ensure workers are fairly compensated when employers fall short. This is a fair set of changes which provides employers an opportunity to correct mistakes and, as I mentioned, incentivises voluntary rectification, but it also provides greater penalties to ensure that employers do meet their obligations and that, if they don't, there are consequences.

This is, I think, a fairly balanced set of changes. The Australian tax office estimates that $5.2 billion in super went unpaid in 2021-22. That's $100 million every single week that workers earned but never received, and that's just unacceptable.

And as we all know about the superannuation system, it works because of the compound interest earned. It's $100 million every week, but, over time, that would add up if that were in people's retirement funds. It is a real shame that people are being robbed of the money that they deserve for their retirement.

The Australian Taxation Office will use Single Touch Payroll data, STP data, which employers already report, and match it with data from superannuation funds to detect missed payments in near-real time. This data-matching capability allows the Australian tax office to intervene earlier, which then reduces the risk of large debts building up and increasing the chance of recovery.

Again, that mechanism will be good for employers, and for workers too. The government has committed $404.1 million to support the implementation here. The ATO will adopt a facilitative compliance approach in the first year.

Employers who make a genuine attempt to comply, even if they do face technical issues, will not be targeted by Australian tax office compliance. The reform also helps employers by aligning superannuation with payroll, which does reduce end-of-quarter administrative pressure and the risk of large liabilities. The Australian tax office advises that, in a typical investigation of an unpaid superannuation case, a worker has missed out on nearly two years worth of superannuation contributions.

For the average 35-year-old, failing to recover this money could reduce their retirement savings by around $32,000 in today's money. This is significant, and it is really important that we as a parliament, and certainly we as a government, take steps to address this terrible problem that is costing our communities billions of dollars. When employers do go bust, the impact is even more severe.

For an average 35-year-old, again, missing out on superannuation from a liquidated business could leave their retirement balance over $90,000 worse off. It is imperative that we pass this legislation as soon as possible to give employers, payroll providers, superannuation funds and the Australian tax office time to build the systems needed to implement these changes by 1 July 2026.

We know that, with an ageing population, the need to support Australians to achieve economic dignity in retirement is not only the right thing to do but also an economic necessity. The longer we wait, the more workers miss out and the harder it becomes to recover unpaid superannuation. The Labor Party have always championed superannuation.

We believe that every single person, no matter their background, deserves to have a dignified retirement. We should be very proud of superannuation in this country. It is a great example of Australian exceptionalism.

We should do everything we can to strengthen the system. I'm really proud to be part of a government that has delivered on changes to superannuation that make the system fairer, that make contributions better for working people and that will see the superannuation system be more equal, with superannuation to be paid on paid parental leave. This is a significant step forward, and the legislation before us today represents another significant step forward in addressing some of the unfortunate inequities that are in the system.

It's reform that means there will be much more money in the pockets of our communities for their retirement. I commend this bill to the House.