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12 Apr 2019 The reason for STP

MEMBER 72 writes: 

At my office over sandwiches we have discussed several times, the compliance purpose of STP. It is quite a cost to implement for small / micro businesses, and another additional ongoing obligation to the Tax Office (it does not lessen their chores to the Tax Office). 

The compliance advantage – I have had trouble seeing it – PAYG withholding already reported monthly or quarterly with debts created for payment / pursuit by the ATO. Super guarantee via clearing houses monthly or quarterly with reporting of individual employees, debts created for payment or pursuit by the ATO. I doubt very much that more reporting will alter a small business’ choice of when they pay the Tax Office. 

But the recent Budget, and commentary under a Social Security heading, mentions how the Department of Human Services (Centrelink) will have STP reporting from 1 July 2020, thus obviously automating welfare payments using that data.  Given the cost of welfare – that makes a lot of compliance sense.  

I looked up the Explanatory Memorandum – Budget Savings (Omnibus) Bill 2016.  It refers to sharing STP across all Federal agencies as real time information, and further extending it to State agencies. 

With the likes of Centrelink, Family Assistance, Child Support Agency, Payroll tax getting STP real-time, makes a huge amount of sense. Perhaps the ATO could publish the greater purpose of STP to gain wider acceptance of its need.


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