“In fact, the penalty regime can lead to further non-compliance delays in employers making superannuation contributions,” said Mr Conway.

“The onerous penalty regime has done little to address the problem of unpaid superannuation, which some experts say is on the rise.”

Mr Conway said the IPA supports the government’s move to improve small business superannuation compliance through the expansion of the small business clearing house.

“However, more can be done. In particular we believe the non-deductibility of late SG contributions when paid, is a harsh and unreasonable outcome,” he said.

“The interest charge, administrative fee and potential penalties are sufficient incentives for an employer to meet their SG obligations rather than pay the SG charge.”

He noted the importance of striking the right balance between employers who pay super on time and those who do not.

“Currently the SG is worked out based on the employee’s salary and wages which is a broader base than ordinary time’s earnings. We recommend moving to a single base for calculations, which will simplify the process for employers to comply with their super obligations,” he said.

“Removing the need to pay a potentially higher SG charge than the original amount of the contribution required to be made is a welcome improvement, particularly for small businesses.”

Mr Conway also argued that the non-deductibility of the SG charge is unreasonable and the requirement to complete and lodge an SG charge statement should be removed.

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