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

Mr THISTLETHWAITE (Kingsford Smith—Assistant Minister for Immigration and Assistant Minister for Foreign Affairs and Trade) (18:24): Labor established superannuation to provide workers dignity in retirement. It's about saying thank you to workers for a lifetime of toil and slog, generating profits for their employers and adding to national income. It's about saying thank you for those years of working.

It's about providing people with the opportunity to retire with a nest egg of savings that's reasonable. It's so that they can enjoy a holiday every now and then, buy presents for grandkids, and be able to live a rewarding and fulfilling life. This legislation is about reforming our superannuation system to help ensure that more Australians get the secure retirement they deserve.

We're doing that by ensuring that they get paid their superannuation at the right time. Payday super is a once-in-a-generation reform to fix unpaid superannuation. While most employers do the right thing, the Australian Taxation Office estimates that $5.2 billion worth of super from the most recent financial year went unpaid.

That's $100 million every week that workers earned but never received. In effect, it's wage theft. It's theft from workers of their hard-earned retirement incomes, and it has to stop.

This reform will help ensure that workers actually receive the super they're owed, when they're owed it. This issue disproportionately affects more-vulnerable Australians and women. That's because those on lower pay, in casual and insecure work, who are more likely to be women, are most at risk of missing out on their superannuation.

These are the people who can least afford to miss out on their retirement savings. In a typical ATO investigation of unpaid super, 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 dollars.

That's a lot of missed opportunity for a worker in retirement. And when an employer goes bust the impact can be even more severe. For an average 35-year-old, missing out on super from a liquidated business can leave their retirement balance more than $90,000 worse off in today's dollars.

So, from 1 July 2026, employers will be required to pay superannuation guarantee contributions at the same time as wages, instead of quarterly. Employers will have to ensure that contributions are received by the employee's super fund within seven business days of payday. We've heard of same job, same pay; well, this is same day, same pay—ensuring that people have their superannuation paid in a timely manner into their superannuation fund so they don't miss out.

The change will make it easier for employees to track their super and for the ATO to detect missed payments earlier, before debts become unrecoverable. The 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 super guarantee charge will apply each payday that an employer fails to pay super in full and on time.

The updated super guarantee charge includes notional earnings, which compensates employees for the investment returns they missed out on because of a late payment; administrative uplift, an additional charge to reflect the cost of enforcement to incentivise voluntary rectification, which can be reduced for employers who voluntarily disclose that they've got 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 the SG charge, will face higher penalties of up to 50 per cent of the unpaid amount. So there's an incentive in this bill to ensure that employers understand their obligations and make their payments on time. These changes are designed to prompt employers to fix mistakes quickly and to ensure that workers are fairly compensated when employers fall short.

I want to thank the unions, the industry, businesses and the broader community for their feedback, their engagement and their views on this important legislation. This legislation is a priority for our government because we know how important superannuation is and we know what a dramatic effect even a week's unpaid superannuation can have on an employee's balance down the line, when they retire.

This is legislation that is long overdue. It must pass as soon as possible to give employers, payroll providers, super funds and the ATO time to build the system and implement this change by 1 July 2026. The longer we wait, the more that workers will miss out and the harder it will become to recover unpaid superannuation.

That's why it's important that this bill passes as quickly as possible.