Superannuation Guarantee Contributors as a Tax: The Case for Reincarnation over Reform

Abstract

The superannuation guarantee charge, which aims to ensure that employers pay compulsory superannuation for their employees, is collected as a tax. This method of collection has advantages because it covers a range of workplaces and types of businesses, including where the workers are outside of the conventional notion of employment. However, despite this, unpaid superannuation guarantee obligations remain a significant concern for government, superannuation funds, trade unions and workers themselves. Attempts to improve recovery — both legislative and procedural — have arguably been tinkering around the edges of a fundamentally misconceptualised scheme. This article suggests an alternative approach which utilises the collection mechanisms of the Fair Work Act 2009 (Cth) and the worker-focused Fair Work Ombudsman as the primary agency overseeing superannuation collection. This would see superannuation recast as “deferred wages”, recoverable in the same way as other employee entitlements. While a further referral of powers from the states to the federal government would be required — or perhaps a constitutional amendment — the article argues that reincarnating the superannuation guarantee in this way could significantly improve recovery for the benefit of workers.

Keywords: superannuation, tax,

JEL Classification: K00, K31