Submission to Superannuation Guarantee Non-Payment Inquiry

COTA Australia welcomes the opportunity to make a brief contribution to this Senate Inquiry, given the essential role of the superannuation system in the economic wellbeing of current and future cohorts of older Australians.

We appreciate the Senate investigating this crucial issue of some employers failing to meet their Superannuation Guarantee (SG) obligations. The SG is the fundamental plank of our superannuation system and Australian employees must be able to have confidence in the integrity of its operation. Given the compounding nature of superannuation contributions over a working life, any delays or defaults on payment of the SG have a significant impact on the retirement incomes of those affected.

In the context of longer lives and government measures to limit social welfare expenditures, superannuation balances are expected to be an increasingly important component of retirement incomes in the years to come. However, to achieve this, not only must the superannuation system continue to mature and develop in a number of ways, but its foundation elements must also be secure and reliable right now.

The recent research by Industry Super Australia and CBUS , which found alarming evidence of underpayment of the SG, has been a wake-up call. We are particularly concerned that the evidence suggests that the main burden of non-compliance is falling on the lowest paid employees and those in the most insecure work, many of whom are women.

In recent times there has been a strong focus on the lack of gender equity in superannuation outcomes and COTA has been a strong voice for redressing the balance . Given women’s greater participation in casual and part-time work and the persistence of gender pay inequality, women are likely to be particularly hard hit by any underpayment or non-payment of the SG.

We also raise below the related issue of the age and earnings eligibility criteria for participation in SG arrangements. We view this as another form of underpayment, albeit officially sanctioned rather than emanating from non-compliance.

COTA strongly encourages the Senate committee to take leadership to correct the systemic factors that are resulting in SG underpayment as a matter of urgency.