The Council of Small Business Organisations Australia (COSBOA) has expressed deep concerns over recent modifications to the superannuation payment system. The organization warns that these changes will disproportionately impact small businesses, leading to increased administrative burdens and financial costs.
The Impact of Payday Super
The government’s proposal to bring forward superannuation payments to every pay cycle, instead of the current quarterly requirement, aims to benefit superannuation members by ensuring more timely contributions. However, COSBOA believes this policy will have severe consequences for small business owners and employers.
Increased Administrative Burden
According to COSBOA CEO Luke Achterstraat, the proposed shift to pay day super contributions will significantly increase the administrative burden on small businesses. Employers will be required to make more frequent payments, handle more transactions, and ultimately incur higher costs to ensure super reaches their employees’ accounts.
The Closure of the Small Business Superannuation Clearing House
The policy change also coincides with the closure of the ATO-managed Small Business Superannuation Clearing House, a service that offered a no-cost solution for many small employers to manage their superannuation obligations. This closure leaves small business owners uncertain about how to meet their super obligations going forward.
Unfair Practices and Penalties
COSBOA has raised concerns about super funds and payment gateways earning interest while holding onto super contributions before allocating them to members. Additionally, there is a risk that employers may face penalties for delays that are outside of their control.
A Call for Reconsideration
COSBOA is urging the government to reconsider this policy reform and implement an option for small businesses to pay their super monthly. The organization also calls for the removal of penalties for employers who have instructed their bank to send the super payment.
Protecting Small Businesses
COSBOA emphasizes the importance of supporting small businesses in the current economic climate. Imposing additional costs and compliance requirements on them will only hinder their ability to thrive and contribute to the Australian economy.
