Millions of Australians missing out on superannuation, amid rise of gig economy

ABC News
March 26 2018


Millions of workers are missing out on superannuation or failing to gain enough superannuation to secure a decent retirement, sparking calls for the entire system to be overhauled.   :(

The coverage of the superannuation system is being undermined by:

    The rise of the gig economy, with a growing number of workers not classed as employees and ineligible for compulsory employer-funded superannuation;
    Billions of dollars of retirement savings lost to employees each year through unpaid superannuation;
    A significant share of the workforce in low-paid or insecure work who do not accumulate sufficient retirement savings.

By law, employers in Australia must pay superannuation to any employee who earns more than $450 a month.

But 1 million workers in Australia are classed not as employees, but as independent contractors, and for the most part are ineligible for compulsory superannuation.
Low-paid workers falling between the cracks   :(

The number of people outside the scope of the compulsory system is accelerating with the rise of apps such as Deliveroo and Uber, which construct their businesses as third-party services connecting the "self-employed" with customers.

"I think it's a huge problem, and I think we're not dealing with it now," Associate Professor Sarah Kaine, a gig economy specialist at the University of Technology Sydney's Business School, told Four Corners.

    "While that might be OK temporarily, it's going to come back and bite us in five, 10, 15, 20 years as people who have relied on freelance work, gig work, come to retire.

"Then that societal risk, if you'd like, that we've accepted allowing this kind of work, comes back to those of us who've been paying tax, comes back to those who will be paying tax who'll have to bear the burden without enough superannuation."

Australia's $2.5 trillion superannuation retirement savings pool is one of the largest in the world.

The Financial Services Council, a lobby group for the investment management industry and superannuation funds run by banks and other financial institutions, wants the Federal Government to have a Productivity Commission inquiry into the implications of the gig economy for superannuation.

"For superannuation to be a successful piece of public policy, which it has been to date, it's got to be flexible enough to enable people in the gig economy to have sufficient money for retirement," Financial Services Council chief executive officer Sally Loane said.

    "We can't let people fall between the cracks."

"From what we understand, being paid superannuation in a gig job is extremely rare," Ms Kaine said.

"Largely because gig workers have been intentionally classified as 'not employees', so independent contractors, or entrepreneurs, or freelancers, often deliberately to avoid such responsibilities or superannuation on behalf of the organisation."

An influential player in the superannuation industry and the union movement is now calling for compulsory superannuation contributions to be extended to all workers, including those in the gig economy.

"The whole idea was that we needed a universal system. It's not universal right now. Millions of workers are falling between the cracks of the superannuation system in this country," Tim Kennedy who chairs one of Australia's oldest industry super funds, LUCRF super, and is the national secretary of the National Union of workers, told Four Corners.

    "We need a situation where no matter how you're engaged as a worker, no matter what the employer called you, that every hour you work, for every day you work, superannuation should accrue to you.

"That's important. That must happen for it to work. If you are a worker, you should be paid super. Full stop."

Mr Kennedy argues the entire design of the superannuation system needs an overhaul because superannuation is failing vulnerable workers who need the most help to save for retirement.
Low-paid workers super shortfall
Many low-paid workers are not accumulating enough super for a secure retirement.

'This was never a welfare measure'

Former prime minister and treasurer Paul Keating, who played a key role in devising and establishing Australia's superannuation system, bristled at the suggestion that the system was inequitable and should be changed.

    "This this sort of idea that, you know, 'Oh, superannuation's a great play against the ordinary people for the wealthy.' It's just not true," Mr Keating said.

"As the author of the system, let me say with all authority, this was never a welfare measure. It was always a complementary savings measure for middle Australia. Let's say workers on between $65,000 and $130,000.

"The most fruitful pathway is that for categories of workers on lower incomes, they get a payment off the budget, which I established right at the get go."
Our super system isn't serving all Australians

Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations

Many workers are not receiving the superannuation they are owed because of widespread failure by employers, particularly in the small business sector, to fulfil their obligations to pay compulsory superannuation contributions.   :(

Companies fail to pay about $3 billion in superannuation entitlements to employees a year, according to analysis by the Australian Taxation Office, which has responsibility for collecting unpaid super.

Another study, from Industry Super Australia, put the figure at $5.6 billion with nearly 3 million employees missing out.

"I think it's mind boggling really, when you consider that superannuation is meant to be a guaranteed right," Ms Kaine said.

"The fact that we have such poor compliance is really absolutely astounding."

You can watch Four Corners' Super Risk at 8.30pm on ABC TV.

Its time wrote on Mar 26^th, 2018 at 3:13pm:

Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations

Labor - Paul Keating.


whiteknight wrote on Mar 26^th, 2018 at 3:07pm:

Former prime minister and treasurer Paul Keating, who played a key role in devising and establishing Australia's superannuation system, bristled at the suggestion that the system was inequitable and should be changed.     "This this sort of idea that, you know, 'Oh, superannuation's a great play against the ordinary people for the wealthy.' It's just not true," Mr Keating said. "As the author of the system, let me say with all authority, this was never a welfare measure. It was always a complementary savings measure for middle Australia. Let's say workers on between $65,000 and $130,000.

St Paul disagrees with you. ;)

lee wrote on Mar 26^th, 2018 at 3:21pm:

Its time wrote on Mar 26th, 2018 at 3:13pm: Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations Labor - Paul Keating. whiteknight wrote on Mar 26th, 2018 at 3:07pm: Former prime minister and treasurer Paul Keating, who played a key role in devising and establishing Australia's superannuation system, bristled at the suggestion that the system was inequitable and should be changed.     "This this sort of idea that, you know, 'Oh, superannuation's a great play against the ordinary people for the wealthy.' It's just not true," Mr Keating said. "As the author of the system, let me say with all authority, this was never a welfare measure. It was always a complementary savings measure for middle Australia. Let's say workers on between $65,000 and $130,000. St Paul disagrees with you. ;)

Oh the welfare bill would've been lower ah hah

Its time wrote on Mar 26^th, 2018 at 3:44pm:

Oh the welfare bill would've been lower ah hah

The welfare bill will be lower.

Superannuation is looking at a 45 year (at least) investment plan. The Keating reforms were started in 1992. So currently only 26 years. It is in the final years that the compounding effect of Super really kicks in.

You should really do some study on YOUR super. It is YOU it will affect.

lee wrote on Mar 26^th, 2018 at 3:55pm:

Its time wrote on Mar 26th, 2018 at 3:44pm: Oh the welfare bill would've been lower ah hah The welfare bill will be lower. Superannuation is looking at a 45 year (at least) investment plan. The Keating reforms were started in 1992. So currently only 26 years. It is in the final years that the compounding effect of Super really kicks in. You should really do some study on YOUR super. It is YOU it will affect.

Would've been better for everybody at 15 % can't remember who opposed that  ::)

Its time wrote on Mar 26^th, 2018 at 4:32pm:

Would've been better for everybody at 15 % can't remember who opposed that

People can contribute; nothing stopping them.

Oh, you want the employer to pick up the entire tab. ;D ;D ;D ;D ;D ;D

lee wrote on Mar 26^th, 2018 at 4:47pm:

Its time wrote on Mar 26th, 2018 at 4:32pm: Would've been better for everybody at 15 % can't remember who opposed that People can contribute; nothing stopping them. Oh, you want the employer to pick up the entire tab. ;D ;D ;D ;D ;D ;D

That was the intention from the outset and in return we gave up pay rises for a few years .

Its time wrote on Mar 26^th, 2018 at 5:21pm:

That was the intention from the outset and in return we gave up pay rises for a few years .

Yes. Gave up pay rises for a few years. Then wanted bigger pay rises AND the increased superannuation payments.

lee wrote on Mar 26^th, 2018 at 5:34pm:

Its time wrote on Mar 26th, 2018 at 5:21pm: That was the intention from the outset and in return we gave up pay rises for a few years . Yes. Gave up pay rises for a few years. Then wanted bigger pay rises AND the increased superannuation payments.

Link

Its time wrote on Mar 26^th, 2018 at 5:45pm:

Link

nah, my turn. ;D ;D ;D ;D

In te very unlikely event that Bull S. gets in and starts a mongrel coalition with the vile Greenies SUPER won't be worth a bumper as Labor will steal money to give to the almost bankrupt unions.

Of course unionists super would be much better off if the unions weren't suckin' sch!t out of the industry super funds.

9 out of the top ten  are industry funds  ;D ;D ;D

Its time wrote on Mar 26^th, 2018 at 7:02pm:

9 out of the top ten  are industry funds  ;D ;D ;D

You do understand that the commercial super funds still have to account for the funds in the pension phase; which distorts the picture?

"As we showed on Thursday, over the last 10 years, industry super funds have transferred $50 million to unions."

https://i1.wp.com/thefairgo.com/wp-content/uploads/2017/07/union_funds.jpg

lee wrote on Mar 26^th, 2018 at 7:27pm:

Its time wrote on Mar 26th, 2018 at 7:02pm: 9 out of the top ten  are industry funds  ;D ;D ;D You do understand that the commercial super funds still have to account for the funds in the pension phase; which distorts the picture? "As we showed on Thursday, over the last 10 years, industry super funds have transferred $50 million to unions." https://i1.wp.com/thefairgo.com/wp-content/uploads/2017/07/union_funds.jpg

I will stick with my industry super fund thanks  :)

Its time wrote on Mar 26^th, 2018 at 7:29pm:

I will stick with my industry super fund thanks

Of course you will. It is your super and your responsibility. I wouldn't dream of denying you that.

Perhaps you could ask your industry fund to withhold their payments on your behalf to the union; so you have a larger nest egg, seeing as you seem to believe it won't be enough.

lee wrote on Mar 26^th, 2018 at 7:37pm:

Its time wrote on Mar 26th, 2018 at 7:29pm: I will stick with my industry super fund thanks Of course you will. It is your super and your responsibility. I wouldn't dream of denying you that. Perhaps you could ask your industry fund to withhold their payments on your behalf to the union; so you have a larger nest egg, seeing as you seem to believe it won't be enough.

Those same super funds have less fees than retail funds.  That's a fact.  But welcome someone to show me otherwise.  Net returns far stronger with industry funds.

Here's a great retail fund for you. 
http://www.abc.net.au/news/2018-03-26/mercer-superannuation-members-high-fee-accounts-four-corners/9587748

stunspore wrote on Mar 26^th, 2018 at 8:33pm:

Those same super funds have less fees than retail funds.  That's a fact.  But welcome someone to show me otherwise.  Net returns far stronger with industry funds. Here's a great retail fund for you. http://www.abc.net.au/news/2018-03-26/mercer-superannuation-members-high-fee-acc...

Oh that's right you are a scientist.
How about you do the maths, Rule of 72, on how much say $100 pa to your union for the next 40 years costs you.

By the way what does the union actually do to generate this largesse? Board Fees?

Sorry, I didn't give you a rate of return - say 8%

lee wrote on Mar 26^th, 2018 at 3:55pm:

Its time wrote on Mar 26th, 2018 at 3:44pm: Oh the welfare bill would've been lower ah hah The welfare bill will be lower. Superannuation is looking at a 45 year (at least) investment plan. The Keating reforms were started in 1992. So currently only 26 years. It is in the final years that the compounding effect of Super really kicks in. You should really do some study on YOUR super. It is YOU it will affect.

Please tell me when the Coalition last increased the level of compulsory superannuation contributions.

Bam wrote on Mar 27^th, 2018 at 11:54am:

Please tell me when the Coalition last increased the level of compulsory superannuation contributions.

Oh dear. One of the entitled.  "They" should pay all of your superannuation. You should not have to do anything. ;D ;D ;D ;D ;D ;D ;D

lee wrote on Mar 27^th, 2018 at 2:36pm:

Bam wrote on Mar 27th, 2018 at 11:54am: Please tell me when the Coalition last increased the level of compulsory superannuation contributions. Oh dear. One of the entitled.  "They" should pay all of your superannuation. You should not have to do anything. ;D ;D ;D ;D ;D ;D ;D

I see you are dodging the question.

Have another go.

Please tell me when the Coalition last increased the level of compulsory superannuation contributions.

Bam wrote on Mar 27^th, 2018 at 2:38pm:

Please tell me when the Coalition last increased the level of compulsory superannuation contributions.

No. You tell me. ;)

BTW -

"Workers should not be forced to lock away a rising portion of their wage in superannuation, according to a new report.

Axing the planned increase to 12 per cent in the rate of compulsory super would save federal coffers almost $2 billion a year – money that would be better spent boosting rent assistance for vulnerable retirees, mainly single women, the Grattan Institute report says."

https://www.smh.com.au/money/super-and-retirement/scrap-super-guarantee-increase-to-boost-wages-save-2b-grattan-institute-20180208-h0vs81.html

Fairfax and Grattan Institute, both left leaning "progressive" organisations.

lee wrote on Mar 27^th, 2018 at 2:46pm:

Bam wrote on Mar 27th, 2018 at 2:38pm: Please tell me when the Coalition last increased the level of compulsory superannuation contributions. No. You tell me. ;) BTW - "Workers should not be forced to lock away a rising portion of their wage in superannuation, according to a new report. Axing the planned increase to 12 per cent in the rate of compulsory super would save federal coffers almost $2 billion a year – money that would be better spent boosting rent assistance for vulnerable retirees, mainly single women, the Grattan Institute report says." https://www.smh.com.au/money/super-and-retirement/scrap-super-guarantee-increase-to-boost-wages-save-2b-grattan-institute-20180208-h0vs81.html Fairfax and Grattan Institute, both left leaning "progressive" organisations.

No. I asked you a simple question. Surely you can answer it.

The compulsory superannuation contribution was supposed to increase eventually to 15% to ensure self-sufficiency in retirement for retirees.

So answer the question.

Please tell me when the Coalition last increased the level of compulsory superannuation contributions.

Bam wrote on Mar 27^th, 2018 at 3:27pm:

No. I asked you a simple question. Surely you can answer it.

If it is si simple answer it yourself.

lee wrote on Mar 27^th, 2018 at 3:30pm:

Bam wrote on Mar 27th, 2018 at 3:27pm: No. I asked you a simple question. Surely you can answer it. If it is si simple answer it yourself.

One of these answers is correct:

You're not able to answer the question because

(a) You're too embarrassed to admit the truth
(b) You're unable to do your own research and you have to be spoon-fed with everything
(c) You're terminally lazy
(d) You're not very smart
(e) All of the above.

Bam wrote on Mar 27^th, 2018 at 4:19pm:

One of these answers is correct: You're not able to answer the question because (a) You're too embarrassed to admit the truth (b) You're unable to do your own research and you have to be spoon-fed with everything (c) You're terminally lazy (d) You're not very smart (e) All of the above.

You forgot F. Couldn't give an F. ;D ;D ;D ;D ;D ;D ;D

Poor old Lee has resorted to trolling as electoral victory all but evaporates .

Its time wrote on Mar 27^th, 2018 at 8:51pm:

Poor old Lee has resorted to trolling as electoral victory all but evaporates .

Strange.I merely answered his question. :D :D :D :D :D :D :D

Its time wrote on Mar 26^th, 2018 at 3:13pm:

Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations

The Australian super is nothing but a fraud, set up for the benefit of the elite 20% of the population.
It was badly designed by the Keating government in the first place, and then the Howard government in 2007 made it more beneficial for the rich 20% by making super income tax-free, if paid by the so-called taxed fund.
Currently the various tax concessions for the rich exceed the total cost of the age pension, disability pension and unemployment benefits combined.
The other weakness of the super system is, that it does not address the Centrelink pension, and a part-pensioner starts losing 50% of the pension after earning a certain amount or accumulating a certain amount of assets.
Compare this with a self funded retiree with an income of some $100,000 plus pays no tax at all.
Furthermore, many employers dodge the payment of the super for their employees; in most efficient super system the employer has to pay the super contributions within a limited time, usually no more than 3 month, so if a company goes bankrupt, the employees don't lose years of super.
Paul Keating has nothing to be proud of, because his government did a lousy job as far as super is concerned, yet he also introduced dividends imputation; and guess who benefits mostly from that?

hawil wrote on Mar 29^th, 2018 at 7:29pm:

Its time wrote on Mar 26th, 2018 at 3:13pm: Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations The Australian super is nothing but a fraud, set up for the benefit of the elite 20% of the population. It was badly designed by the Keating government in the first place, and then the Howard government in 2007 made it more beneficial for the rich 20% by making super income tax-free, if paid by the so-called taxed fund. Currently the various tax concessions for the rich exceed the total cost of the age pension, disability pension and unemployment benefits combined. The other weakness of the super system is, that it does not address the Centrelink pension, and a part-pensioner starts losing 50% of the pension after earning a certain amount or accumulating a certain amount of assets. Compare this with a self funded retiree with an income of some $100,000 plus pays no tax at all. Furthermore, many employers dodge the payment of the super for their employees; in most efficient super system the employer has to pay the super contributions within a limited time, usually no more than 3 month, so if a company goes bankrupt, the employees don't lose years of super. Paul Keating has nothing to be proud of, because his government did a lousy job as far as super is concerned, yet he also introduced dividends imputation; and guess who benefits mostly from that?

It looks I have brought another topic to a sudden stop.
The ABC discussed the super system on Four Corners, but it turned out to be only a gabfest, they wouldn't like to rock the boat, because the elite on the ABC are enjoying the fruits of the elite 20% of the Australian society.

hawil wrote on Apr 7^th, 2018 at 8:03pm:

hawil wrote on Mar 29th, 2018 at 7:29pm: Its time wrote on Mar 26th, 2018 at 3:13pm: Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations The Australian super is nothing but a fraud, set up for the benefit of the elite 20% of the population. It was badly designed by the Keating government in the first place, and then the Howard government in 2007 made it more beneficial for the rich 20% by making super income tax-free, if paid by the so-called taxed fund. Currently the various tax concessions for the rich exceed the total cost of the age pension, disability pension and unemployment benefits combined. The other weakness of the super system is, that it does not address the Centrelink pension, and a part-pensioner starts losing 50% of the pension after earning a certain amount or accumulating a certain amount of assets. Compare this with a self funded retiree with an income of some $100,000 plus pays no tax at all. Furthermore, many employers dodge the payment of the super for their employees; in most efficient super system the employer has to pay the super contributions within a limited time, usually no more than 3 month, so if a company goes bankrupt, the employees don't lose years of super. Paul Keating has nothing to be proud of, because his government did a lousy job as far as super is concerned, yet he also introduced dividends imputation; and guess who benefits mostly from that? It looks I have brought another topic to a sudden stop. The ABC discussed the super system on Four Corners, but it turned out to be only a gabfest, they wouldn't like to rock the boat, because the elite on the ABC are enjoying the fruits of the elite 20% of the Australian society.

Because you are absolutely correct and there is no real way to change it.

Setanta wrote on Apr 7^th, 2018 at 10:20pm:

hawil wrote on Apr 7th, 2018 at 8:03pm: hawil wrote on Mar 29th, 2018 at 7:29pm: Its time wrote on Mar 26th, 2018 at 3:13pm: Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations The Australian super is nothing but a fraud, set up for the benefit of the elite 20% of the population. It was badly designed by the Keating government in the first place, and then the Howard government in 2007 made it more beneficial for the rich 20% by making super income tax-free, if paid by the so-called taxed fund. Currently the various tax concessions for the rich exceed the total cost of the age pension, disability pension and unemployment benefits combined. The other weakness of the super system is, that it does not address the Centrelink pension, and a part-pensioner starts losing 50% of the pension after earning a certain amount or accumulating a certain amount of assets. Compare this with a self funded retiree with an income of some $100,000 plus pays no tax at all. Furthermore, many employers dodge the payment of the super for their employees; in most efficient super system the employer has to pay the super contributions within a limited time, usually no more than 3 month, so if a company goes bankrupt, the employees don't lose years of super. Paul Keating has nothing to be proud of, because his government did a lousy job as far as super is concerned, yet he also introduced dividends imputation; and guess who benefits mostly from that? It looks I have brought another topic to a sudden stop. The ABC discussed the super system on Four Corners, but it turned out to be only a gabfest, they wouldn't like to rock the boat, because the elite on the ABC are enjoying the fruits of the elite 20% of the Australian society. Because you are absolutely correct and there is no real way to change it.

Unfortunately, you are also very correct with your short senstence; but it is very strange that none of the rich members frequenting this forum have the courage to disprove what I,am stating.

hawil wrote on Mar 29^th, 2018 at 7:29pm:

Its time wrote on Mar 26th, 2018 at 3:13pm: Imagine our social security bill if Labor didn't bring in Super , ahead of their time the mighty Labor party , it's a shame we have dumb arse conservatives holding us back generations The Australian super is nothing but a fraud, set up for the benefit of the elite 20% of the population. It was badly designed by the Keating government in the first place, and then the Howard government in 2007 made it more beneficial for the rich 20% by making super income tax-free, if paid by the so-called taxed fund. Currently the various tax concessions for the rich exceed the total cost of the age pension, disability pension and unemployment benefits combined. The other weakness of the super system is, that it does not address the Centrelink pension, and a part-pensioner starts losing 50% of the pension after earning a certain amount or accumulating a certain amount of assets. Compare this with a self funded retiree with an income of some $100,000 plus pays no tax at all. Furthermore, many employers dodge the payment of the super for their employees; in most efficient super system the employer has to pay the super contributions within a limited time, usually no more than 3 month, so if a company goes bankrupt, the employees don't lose years of super. Paul Keating has nothing to be proud of, because his government did a lousy job as far as super is concerned, yet he also introduced dividends imputation; and guess who benefits mostly from that?

I think when Keating first set up the Super scheme, I think it was so unique an idea that it was bound to have hiccups.   You would think however that after 30 odd years of compulsory superannuation being in place, the bugs in the original system would have been worked out and we would all be closer to achieving Keating's aim of weaning the majority of people off the aged pension and funding their own lifestyle.

The problem is of course that politicians can't help themselves and constantly fiddle with it, putting new tweaks in, only for them to be removed later.     We cannot afford to keep funding the age pension - the amount of people paying taxes, and the amount of taxes they are paying is falling, the money will eventually run out and have to be raised elsewhere.