A recent report revealed that in the 2021/2022 fiscal year alone, Australian employees lost out on $5.1 billion in superannuation because of the old system's sluggishness. The Super Members Council has illuminated this impact, emphasising how the delayed legislative action has short-changed hardworking Australians.
Misha Schubert, chief executive of the Super Members Council, conveys the urgency of this reform. “Paying super on paydays will modernise the super system to stem underpayments for Australian workers,” Schubert notes. Such a change promises not only a more equitable system for employees but also benefits businesses by simplifying payroll processes.
The analysis carried out by the Council demonstrates that over the past nearly a decade, Australians missed out on accruing an additional $41.6 billion in super, equating to roughly $1800 per average worker annually. These figures paint a stark picture of lost opportunities for enhancing retirement savings.
In the meantime, the proposed payday super changes are set to be enacted by mid-2026. Yet, over two years after the initial announcement, formal legislation has yet to see the light. It’s a reality pointed out by the Council of Small Business Organisations Australia (COSBOA) as they express concerns about the unrolling of necessary regulations.
Luke Achterstraat, COSBOA’s chief executive, has openly addressed the anxieties surrounding implementation, highlighting the absence of draft legislation and a definitive plan. In a letter to Assistant Treasurer Stephen Jones, he stated, “We are 21 months since that announcement was made (but) we are yet to see what has been drafted into the legislation.”
The Australian government had initially outlined the changes in its past budget, suggesting that more frequent super payments would not only empower workers to ensure accurate entitlements but also prevent employer misconduct. The anticipation was that it would also aid businesses by reducing the liabilities accumulated under the previous system.
Despite this, businesses now face a timeline that seems increasingly tight, considering the technical changes and adjustments required. Mr Jones has reassured stakeholders that a period remained to prepare before the official implementation date, reinforcing that the awaited legislation “will shortly be released for consultation.”
While these impending reforms promise a future with timely super contributions, the extended delays have stirred impatience among millions of Australians reliant on these plans to secure their retirement. This reality underscores the Super Members Council's clarion call, as Schubert points out, “Unpaid super makes people poorer when they retire.”
Overall, the delay not only represents a missed financial opportunity but also a critical call to action for legislators to ensure these reforms are enacted effectively and efficiently.
