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In media release No 2010/016, issued 24 November 2010, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of the report of the Inspector-General of Taxation (IGOT) entitled "Review into the ATO’s administration of the Superannuation Guarantee Charge", dated March 2010.

In his letter to the Minister, the IGOT said:

"Of the 7 recommendations and 3 part recommendations directed to the ATO [the remaining recommendations were directed to Government], they have agreed with 9 and disagreed with one. Specifically, it has disagreed with my recommendation that the ATO significantly expands its proactive SG audit work to allow for more real-time monitoring and follow-up of high risk employers who have not paid superannuation."

The IGOT also said:

"The review also found that people most at risk with the current SG system are the employees who are the least empowered or incorrectly classified as ‘independent contractors’ – and it is these very people who are most reliant upon compulsory superannuation contributions for a higher standard of living in retirement beyond the age pension." 

In relation to the recommendations made to the Government, Mr Shorten said:

"Through the superannuation measures contained in the Protecting Workers' Entitlements reforms, employees will receive:

  • Information on their payslips about the amount of superannuation actually paid to their account (Recommendation 2)
  • Quarterly notification from their superannuation fund if regular payments cease (in line with Recommendation 3).

Providing employees with more timely information on their superannuation will also assist in reducing the timeframes between when a SG shortfall arises and when an employee lodges a complaint with the ATO.

The Government will shortly commence consultations with the superannuation industry, employer representatives and unions about the implementation of these measures.

The Government is also extending the director penalty regime to cover unpaid SG charge (part of Recommendation 11).  The Inspector-General was of the view that if a company fails and owes superannuation to employees, then the directors of the company should be made strictly liable for the unpaid superannuation liabilities of the company.  This will act as a strong deterrent against employers not paying superannuation and also discourage phoenix practices."


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