MEDIA RELEASE: Small business fraught by super increase
Tuesday, 8 November 2011
The Government's plan to gradually increase the
superannuation guarantee from 9 per cent to 12 per cent will help
to bolster retirement savings but the Institute of Public
Accountants warns that the administration burden on small business
must be considered.
With longer life expectancy and an increase
in the ageing population, it has become even more important for the
Government to address the savings gap by increasing the
superannuation guarantee. While Australians have been able to boost
their superannuation contributions on a voluntary basis, the
reality is that many do not realise the amount they need to retire
until it is too late to make effective additional
The Institute's chief executive officer,
Andrew Conway said, "The Government's strategy to increase the
superannuation savings will help to financially prepare Australians
as they enter retirement but the cost of administering
superannuation is a major burden for small business. The
cost, in time and money, is lost money for small
"They must either divert precious time to
administering something they don't understand, or divert needed
cash flow to pay a professional to administer it for them.
With little direct benefit to small business, they are merely
implementing the government policies."
By implementing changes now the Government is
ensuring that future generations of retirees will be able to
adequately sustain themselves financially and will not depend
heavily on the government pension system. Despite the clear benefit
for individuals, more support needs to be provided for small
business to implement the change.
The Government needs to make this right by
exempting small business from the administration of
The Institute of Public Accountants
recommends that small business should be able to choose to have
superannuation contributions paid directly to the Australian
Taxation Office (ATO), at the same time as PAYG payments are made,
with the ATO taking responsibility for ensuring the money goes to
the right account.
Return to Document Library