INSIGHT

Superannuation-guarantee amnesty, and proposed modern slavery legislation

By Simon Dewberry
Business & Human Rights Employment & Safety Risk & Compliance Superannuation

In brief

Two important pieces of draft legislation under Federal consideration are how employers deal with historical superannuation contribution shortfalls, and the possible requirement of employers to report on modern slavery risks and practices in their workforce and supply chains. Senior Associate Tarsha Gavin and Law Graduate James Daniel report.

How does it affect you?

  • If enacted into law, the Superannuation Guarantee Amnesty will provide employers with an opportunity between 24 May 2018 and 23 May 2019 to correct and disclose superannuation guarantee shortfalls to the Australian Taxation Office (ATO) without being subject to penalties or administration charges.
  • If the Commonwealth Parliament passes the Modern Slavery Bill 2018 (Cth), businesses with $100 million or more in annual consolidated revenue may be required to report on their practices and supply chain processes to ensure that they are not supporting modern slavery.

Superannuation-guarantee amnesty

The ATO has estimated that unpaid superannuation contributions in Australia total approximately $2.8 billion per year. In an effort to remedy this, the Treasury Laws Amendment (2018 Superannuation Measures No.1) Bill 2018 (Cth) is currently before the Australian Senate, proposing to provide employers with an amnesty period in which they can disclose and rectify historical superannuation contribution shortfalls arising in the period 1 July 1992 to 31 March 2018. To access the amnesty, employers will need to voluntarily disclose superannuation shortfalls that had not previously been disclosed. Those shortfalls also cannot be the subject of an ATO audit of superannuation contributions for the relevant period.

Disclosure during the amnesty will allow employers to claim a tax deduction for payments made during the amnesty period, and the penalties and administration charges that would otherwise apply to late superannuation-guarantee payments will not be levied by the ATO.

Modern slavery laws

The Modern Slavery Bill 2018 (Cth) was introduced into the Commonwealth Parliament in June 2018. This bill follows the Modern Slavery Act passed in 2015 in the UK and the Modern Slavery Act 2018 (NSW) which passed the New South Wales Parliament in June 2018. These laws aim to address the significant problem of modern slavery, with global estimates putting the number of modern slaves between 20 and 45 million people.

If the Commonwealth bill is passed in its current form, entities that carry on business in Australia with an annual consolidated revenue of $100 million or more will be required to report on a number of matters including actions the business has taken to address the risk of supporting modern slavery practices. Modern slavery is currently defined in the bill to include slavery, child labour and trafficking in persons. The bill does not currently provide for penalties for non-compliance but instead relies on reputational pressure to encourage companies to comply.

For further information on how this legislation may affect your business and obligations you may have, please see our recent client updates on this topic below: