Superannuation underpayment data shows nearly 30,000 affected in some seats

Nearly a third of workers in some electorates are experiencing superannuation underpayment, damning new figures reveal, as the super funds peak body demands parliamentarians from all sides of politics commit to backing payday super.

Super Members Council chief executive Misha Shubert.

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Nearly a third of workers in some electorates are experiencing superannuation underpayment, damning new figures reveal, as the super funds’ peak body demands parliamentarians from all sides of politics commit to backing payday super.

Labor introduced its payday super reforms – which would result in salaries and superannuation contributions being paid on the same day by employers – more than 18 months ago and promised to have the laws in force by the middle of next year.

But with a potential change of government or minority government looming, the Super Members Council called for a bipartisan commitment to the policy that it said was key to tackling the annual $5bn unpaid super problem.

“Paying super on payday will modernise the super system to stem underpayments for workers,” said Super Members Council chief executive Misha Schubert.

“This urgently needed reform will be fairer for both workers and employers.

“Australians want payday super to be law. With an election due shortly, both workers and employers deserve certainty that payday super is going ahead on time, with full support from both major parties.”

New figures released by the Super Members Council show nearly 30,000 people in the Labor-held Victorian seat of Lalor were being underpaid when it came to their super contributions.

The NSW seats of Mitchell, Greenway and Sydney all had more than 26,000 constituents being underpaid, while Parramatta – which is set to be a key seat in the coming election – recorded the underpayment more than 25,000 people.

“Millions of Australians are paying the price every single day their super goes unpaid – they cannot afford any delay to the introduction of payday super,” Ms Schubert said.

Coalition financial services spokesman Luke Howarth.

Despite the push from the Super Members Council to have payday super become law, the peak body for small businesses warned against the measure.

In a letter to Assistant Treasurer Stephen Jones earlier this year, the Council of Small Business Organisations Australia sounded the alarm over a lack of a proper impact assessment and unrealistic timeline to achieve the change, which would force employers to pay their employees super and salary at the same time.

But Mr Jones said the industry was being given plenty of time for the overhaul.

“This is a whole-of-economy change which is why we have given industry three years to transition to the new payment cycle,” he said.

“Legislation will shortly be released for consultation which will still give industry almost 18 months to prepare for this important reform.”

Opposition financial services spokesman Luke Howarth said that while the Coalition would consider Labor’s payday super legislation once it was finalised, small businesses were “already doing it tough under the Albanese government” and 27,000 had gone bust under Labor this term.

“(Small businesses) will face liquidity and cashflow challenges arising from more frequent super guarantee payments,” Mr Howarth said.

“Payday super can be added to the long list of legislation promised by the government that has been hugely delayed or is yet to materialise on the eve of an election. If there are fundamental flaws with this payday super policy, the government should be upfront about it and not leave millions of small businesses in regulatory limbo.”