Ombudsman call for super tax cuts instead of employer super rises

THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell swants the Federal Government to swap a rise in employer superannuation contributions for a cut in superannuation tax.

According to Ms Carnell, the government could take some financial pressure off small businesses without adversely impacting workers, by deferring superannuation guarantee increases and cutting taxes on superannuation payments. 

In a letter to the Treasurer, Ms Carnell has proposed a two-year deferral on legislated superannuation guarantee increases, while also cutting the 15 percent tax on compulsory employer superannuation guarantee contributions to 7.5 percent during that time.

Ms Carnell said the combined measures offset each other, to ensure workers end up with a similar superannuation amount as they would have under the scheduled increase.

“We have to get the balance right by ensuring small businesses aren’t hit with rising costs and workers are no worse off,” Ms Carnell said.

“Many small businesses are already struggling to stay afloat as a result of the COVID-induced recession and cannot afford to pay higher costs.

“These increased costs would put small business owners under even more financial strain, placing jobs and businesses at risk. It is equally important to safeguard the long-term financial future of Australians through superannuation," she said.

“Our modelling shows our proposed tax cut would cost the government no more than $6 billion per year and would also support struggling small businesses and help the millions of Australians who used the early access to superannuation program to start restoring their long-term super balance.     

“Ultimately, by implementing this proposal, the Federal Government would be supporting small businesses and all Australians who deserve a dignified retirement.”