House of Representatives

Treasury Laws Amendment (2018 Measures No. 4) Bill 2018

Second Reading Speech

Ms O'Dwyer (Higgins-Minister for Revenue and Financial Services, Minister for Women and Minister Assisting the Prime Minister for the Public Service)

I move:

That this bill be now read a second time.

The Turnbull government is today introducing an important suite of reforms to protect workers' superannuation entitlements by improving compliance with the superannuation guarantee.

It is fundamentally unacceptable for people not to be paid their superannuation entitlements. This bill introduces very serious consequences for employers who break the law by short-changing their employees.

For the first time, the ATO will be able to apply for court-ordered penalties where employers defy directions to pay their superannuation guarantee liabilities. These penalties can extend, in the most serious cases, to up to 12 months imprisonment.

This is one of a number of new enforcement options available to the tax office for action against employers who breach their obligation to pay superannuation for their employees.

The bill also enhances early detection of superannuation guarantee noncompliance. In the past, employee complaints have been a primary driver of superannuation guarantee enforcement activity. The ATO will continue to act on employee complaints. This bill gives the tax office improved visibility over superannuation guarantee obligations and payments, allowing it to detect and act on noncompliance often before the employee has become aware of a problem.

Single Touch Payroll will be extended to all employers from 1 July 2019, giving the ATO near real-time information about an employee's superannuation guarantee entitlements. Additionally, from 1 July 2018 superannuation funds will commence near real-time reporting to the ATO of contributions they receive. Combined, these measures provide the ATO with more timely information, supporting earlier detection and enabling quick action against employers detected as not paying the superannuation rightfully owed to employees.

The Turnbull government is also strengthening the ATO's powers to collect debts on behalf of employees where it uncovers cases of unpaid superannuation guarantee by strengthening the director penalty notices regime and tightening arrangements for security deposits not just for superannuation obligations, but also for other tax-related liabilities.

The bill will provide employees with greater ability to check they are receiving the superannuation guarantee rightfully due to them by allowing employees to view more up-to-date information about contributions and balances through their myGov account.

The ATO will also be able to notify employees when it is undertaking collection activity on their behalf. Further, the bill enables the ATO to pre-fill new employees' tax file number declaration and superannuation choice forms, helping them make informed decisions about their superannuation when beginning new jobs. These measures, which enhance the information given to individuals, will encourage greater member engagement with their superannuation.

This bill will also amend the Income Tax Assessment Act 1936 to improve data matching to help ensure the right people are receiving welfare payments.

Increasing the powers of the ATO to verify a tax file number to another Commonwealth agency, where that agency has an existing right to ask for its collection under Commonwealth law, will offer greater data assurance and integrity across government. This will lead to lower levels of incorrect adjustments in welfare payments and a reduction in welfare payment leakage.

Further, the bill makes minor amendments to Treasury portfolio legislation to ensure that the law operates as intended by clarifying the law, correcting technical or drafting defects, removing anomalies and addressing unintended outcomes.

Finally, the bill adds three specifically listed deductible gift recipients (DGRs). DGR status allows members of the public to receive income tax deductions for the donations they make to these organisations. The organisations are:

Australian Philanthropic Services Limited;
Foundation 1901 Limited; and
Sydney Chevra Kadisha.

Together, the measures in this bill represent a substantial enhancement to the tax and superannuation system, ensuring employers make the contributions they owe to employees, protecting the system against misuse, and supporting philanthropy.

Full details of the measures are contained in the explanatory memorandum.

Debate adjourned.