Zaneta Mascarenhas MP
House of Representatives, Parliament House, Canberra
Bills (Payday Superannuation)
I rise today to speak about the Treasury Laws Amendment (Payday Superannuation) Bill 2025 and the Superannuation Guarantee Charge Amendment Bill 2025. This is reform that is long overdue. This reform puts workers first and ensures that superannuation is paid on time—payday super. This is new reform that's designed to fix a system that has affected millions of Australians. In the 2021-22 financial year, the Australian Taxation Office estimated that $5.2 billion in superannuation went unpaid. That's $100 million every week, and it's money that workers earned but never received. This is not just a technical issue; it's a breach of trust and a broken promise to workers who did the right thing. They showed up to work, worked hard and expected their future to be financially secure.
This reform matters because it's about fairness. It's about fairness in the workplace. It's also about fairness in retirement and fairness to the people who are often the most vulnerable. It's about preventing them from being short-changed, whether they be young workers, casual workers or people in insecure jobs. These are the people who can least afford to miss out on their retirement savings. They're already juggling rent, groceries and bills, and they shouldn't have to worry about whether their superannuation is actually being paid.
For the average 35-year-old, missing out on nearly two years worth of superannuation contributions could reduce their retirement savings by around $32,000. Superannuation is a fantastic policy, and it works so well because of something called compound interest. But, for that compound interest to work effectively, we need to make sure that the actual superannuation balances are being paid into their accounts. So what happens if an employer goes bust? The impact is even more severe. The retirement balance could be $90,000 worse off.
The legislation that we have introduced is a game changer. From 1 July 2026, employers will be required to pay superannuation guarantee contributions at exactly the same time as wages—no more quarterly delays. Employers must ensure that superannuation contributions are received by the employee's super fund within seven days of their payday. This is great. This is exciting. This change will make it easier for employees to track their superannuation. I know there have been times when I have left companies and needed to make sure that superannuation had been paid because of the quarterly requirements.
It will help the ATO detect missed payments earlier, before debts become unrecoverable. Often, in the business world, when the health of a business is failing and they are not doing okay, one of the first things that stop being paid is superannuation, and that's because of the requirement that it be paid on a quarterly basis. But now this will be routine. It will happen every payday cycle, and it should be something that we set and make automatic. Right now the ATO often gets involved too late. On average they're investigating two years worth of unpaid super, and by then the businesses might have gone bust. That's why we're giving the ATO the tools that they need, using real-time data, to catch missed payments before they spiral. I know that this will be a big shift, and that's why the ATO will take a facilitative approach in the first year. Employers who make a genuine effort to comply will be treated as low risk. This is about getting the transition right and not punishing good-faith efforts.
The legislation also updates the superannuation guarantee charge, which is the penalty employers face when they fail to pay super on time. Under the new framework, the super guarantee charge will apply for each payday an employer fails to pay super in full and on time. The updated charge includes notional earnings to compensate employees for the investment returns they missed out on and administrative uplift to reflect the cost of enforcement and to incentivise volunteer rectification. There will also be penalties if employers fail to pay into the employee's chosen superannuation fund. Employers who continue not to pay, even after the ATO has raised a super guarantee charge, will face higher penalties of up to 50 per cent of the unpaid amount.
These changes are designed to prompt employers to fix mistakes quickly and ensure that workers are fairly compensated when their employers fall short. The ATO will use the Single Touch Payroll data system, which employers already report to, and match it with data from super funds to detect missing payments in near real time. This data-matching capability allows the ATO to intervene early, reducing the risk of large debts building up and increasing the chance of recovery. This is a good example of what you can do to use technology for good and to actually help people. This is a smart way of modernising our government systems to help individuals.
The government has committed $404 million to support implementation. This funding will ensure that the systems are in place and that the reform is effective. We are supporting employers to meet their obligations. The ATO will adopt a facilitative compliance approach in the first year. Employers who make a genuine attempt will not be targeted. This reform helps employers too, by aligning the payday super and by simplifying the processes. But the truth is that we need to act now. The legislation must pass as soon as possible to give employers, payroll providers, superannuation funds and the ATO time to build the systems needed for implementation by 1 July 2026. The longer we wait, the more workers will miss out and the harder it will become to recover unpaid superannuation.
This reform is about dignity in retirement, trust in our system and making sure that every earned dollar is received. It's very exciting. What I see this being about is actually putting humans and people at the heart of our pay systems, and it's making sure that we do this in a relevantly important way. The Hawke government laid the foundations for universal superannuation, initially by negotiating a three per cent employee contribution in industrial awards. Labor is really proud of our contribution and what we have been able to do to help Australians in their retirement. Superannuation is one of the world's leading financial instruments that exists in any country. It's something that we have done because the Labor Party is the party for the workers and because we want to make sure that those workers have that dignity.
Back in 1992 when I was 12 years old we got to see the Keating government legislate the superannuation guarantee, making employer contributions compulsory and creating and modernising this very exciting system. It's interesting, because I remember that, when I was 15 years old and working at Woolworths and starting to get superannuation paid, it was very exciting. What I'd say I've seen over the years is that we continue to improve the system. In introducing the superannuation guarantee, the first thing was to create that foundation, and what Labor continues to do, term on term, is to build on that foundation to make sure that we help people in their retirement.
With the Rudd-Gillard government we saw the introduction of MySuper, a low-cost, transparent, default product to protect workers who didn't choose a fund. Later we saw the opportunity for people to not be forced into a single superannuation scheme, and early in this scheme we saw almost compulsory life insurance products that ate up the balance. What I see is that we continue to improve the system and make sure that it's working for the individuals rather than the financial companies and the big super funds, because the goal is to make sure that people have that money. The Rudd-Gillard government also launched the SuperStream, a major reform that streamlined how employers pay super, cutting red tape and improving efficiency. They legislated a gradual increase in the superannuation guarantee from nine per cent—it was very exciting to be a part of a government that helped increase our superannuation guarantee—to 12 per cent.
The Albanese government legislated the purpose of superannuation, which is fundamentally about income in retirement and reducing the reliance on the age pension, to made sure that we put that in the heart of our legislation. They removed the outdated $450 monthly income threshold, ensuring that low-income workers received super, and they extended super cover to young workers under the age of 18 who worked more than 30 hours a week. There's still more to do, but this is another example of the way in which we continue to make sure we're building and improving our systems for future generations.
Let's be honest; unpaid super is wage theft. It's money earnt but withheld, and it's happening to people who can least afford it. It puts fairness first and puts super where it belongs: in the hands of the people who earned it. That's how you defend workers and their hard-earned savings. We've seen what happens when we wait too long. We've seen workers left short, debts spiral and retirement dreams fade. This legislation stops that.
We have seen the coalition neglect the superannuation system and deride it through history. While they speak like converts now, actions speak louder than words. The coalition delayed the increases to the superannuation guarantee, denying workers the retirement savings they were promised under Labor legislation. They refused to pay super on Commonwealth paid parental leave, leaving women worse off in retirement and entrenching the gender super pay gap.
I remember that, when I was doorknocking during the election campaign, I spoke to a woman about the fact that we wanted to pay superannuation on paid parental leave. She didn't care what political party I was from; she just said, 'Yes, that is a problem that I've spoken to my friends about, and I'm going to vote for you because you understand that and you're advocating to make sure that I have enough money in retirement.' This is another example of the way the Labor Albanese government understands both working families and working women.
Unfortunately, what we also saw from the coalition was that they failed to act on superannuation theft, allowing more dodgy employers to get away with withholding workers' retirement savings. They neglected low-income workers, letting the low-income superannuation tax offset stagnate, while Labor fought hard to make the system fairer. And, when the super funds faced serious cybersecurity threats, the coalition chose to play politics instead of protecting Australians' savings.
It's really important that we look after our workers. This reform is about defending a world-leading system and letting Australians keep more of what they earn. We've lifted the superannuation guarantee to 12 per cent, strengthened the performance test and legislated the purpose of super to deliver a secure retirement. Payday super builds on that momentum. I commend this legislation to the House.
