Superannuation payments are expensive for small businesses to administer. The time spent managing the accounts, making payments to various funds, responding to funds and responding to individual queries costs time, often time a small business owner pays for on an hourly basis with an accountant or bookkeeper.
My suggestion is that instead of employers paying direct to the funds nominated by employees, we make one lump sum payment at the time of payroll or PAYG or GST payment to a government agency which then disburses to the funds as per the direction of the employees. I see the agency as a clearing house, run on a tight budget with all transactions done electronically.
Setup right, the clearing house agency could reduce the time spent by the Tax Office on Superannuation compliance. In the ATO they look for a default or crime which may have occurred but for which they have no evidence. My clearing house idea would provide immediate visibility of missed deadlines and thereby offer savings to government overhead – as well as to business operators. While I am no economist, I expect the government could fund the clearing house out of ATO savings.
The clearing house would make it easier for employees as they would have one place to go to track super and thereby, be less likely to lose track of funds.
My suggested approach would save considerable time in small businesses not only on the payments front but also on dealing with compliance challenges. For example, I have heard of businesses spending thousands on super audits only to have no problem found. Such audits would be eliminated and that money saved for the victim small business owner.
I expect superannuation funds would benefit from the clearing house approach as they would have one place to go to check information they currently seek out from businesses across the country.
The only downside to the proposal is that business owners could not delay making super payments. The benefits outweigh the cost in my view.
The ATO already has this up and running its called SuperStream. Small businesses with less than 19 members can use it now if they want or are you proposing something different to this model?
Clive Super Stream goes a decent part of the way but only for quite small businesses. It needs to offer it up to any number of members as all businesses should benefit.
It’s currently open to businesses with 20 or more members ?
Super Stream itself applies to all businesses but the clearing house is for small businesses. The explanations are not as clear as they could be.
The super clearing house saves me many hours each month. Luckily I have less than 19 employees. Anyone who is not using it, should start straight away if you qualify.
Another Government Department, eh? Who do you think pays them?
The ATO has plans:
https://www.ato.gov.au/General/Consultation/What-we-are-consulting-about/Papers-for-comment/Single-Touch-Payroll-discussion-paper/