Deliberate underpayment or failure to pay superannuation should be treated “in the same way as wage theft”, the assistant treasurer, Stephen Jones has declared.
In comments to an Industry Super pre-budget conference on Thursday, Jones also confirmed the Albanese government would set targets for the Australian Tax Office to recover an estimated $5bn unpaid super.
The government is also considering requiring employers to pay super at the same time as wages as part of a push for a “significant and meaningful improvement in unpaid super”, which he described as a “tonne of money”.
This would lift the current requirement on employers of paying super quarterly to paying it each and every pay cycle, such as fortnightly or monthly.
Last week, the government responded to a Senate inquiry on underpayment, accepting its primary recommendation that wage theft should be criminalised and the new offence should apply to all forms of remuneration including superannuation.
The industrial relations minister, Tony Burke, has set out a process of consultation with unions and employers for a bill to close pay law loopholes in the latter half of 2023, which will include criminalising wage theft.
But the government response and Jones’s comment on Thursday are the first indication these laws will include failure to pay super, likely to expand the number of employers exposed to possible criminal penalties.
According to Industry Super, in 2018-19 employees missed out on a total of $5bn in super, with more than a quarter of employees losing an average of $1,700 per year.
On Thursday, Jones said it was the government’s objective to eliminate unpaid super, declaring “every dollar that is legally owed to a worker that is not paid is theft”.
“It should be treated in the same way we view wage theft. No, actually I should nuance that, sometimes employers make mistakes.”
Jones accepted that some underpayment was “inadvertent” when pay rates change but payroll systems are “set and forget”, so there should be “arrangements put in place to deal with that”.
But Jones said the estimated $5bn to $6bn of unpaid super was not all “inadvertent mistakes” and Labor wanted to knock “deliberate non-payment … on the head”.
Jessica Tinsley, the director of workplace relations at the Australian Chamber of Commerce and Industry, said “the law should provide appropriate protection against dishonest or fraudulent conduct that would deprive employees of their wages, including superannuation”.
“Wage underpayment laws should not capture non-deliberate behaviour,” she told Guardian Australia.
In March, Burke introduced a bill to add super to the national employment standards.
Jones said this was “a good step in the right direction” and a “significant new right” that would give employees standing to pursue unpaid super in courts or small claims tribunals.
Jones said the government is “tasking the tax office to lift their game”, confirming that it will fulfil its election commitment to set targets for recovery of unpaid super.
Jones warned employers that using workforce onboarding platforms in a “deliberate attempt to side-step” laws stapling employees to one super account were “a stinker” and the government would knock the practice “on the head” if it persisted.
Jones confirmed that the government has “committed” and wants to pay superannuation on paid parental leave but shed no light on timing, arguing Labor is also focused on reducing the $50bn structural deficit and paying off $1tn of federal debt.
In February, the Albanese government announced from 2025 it proposes to raise $2bn a year in revenue by taxing super balances above $3m at 30%.
Asked if he has ambition to go further in narrowing super tax concessions, Jones said there was “nothing under current consideration” but there was “nothing static and set and forget in any of these areas”.
Jones said the lesson Labor had taken from its 2019 election defeat is “we have to prove to the Australian people that we are doing everything in every other area of expenditure to ensure we’re spending their money well before we say ‘we need some more’, and that’s exactly what we’re doing”.
