The Superannuation Guarantee (SG) contribution is compulsory for all employers in Australia.
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This applies to all employment in the private sector, not-for-profit or government related roles and all remunerated board roles where an individual earns more than $450 in a calendar month.
Despite this, in NSW, mayors and councillors that serve on local government are excluded by the operation of section 251 of the Local Government Act 1993, which provides that mayors and councillors fees ‘do not constitute salary for the purposes of any act’.
A collective of Labor, Liberal and Independent councillors co-authored a motion on Lake Macquarie City Council that has passed and will advocate for change. We believe that the current situation is discriminatory and out of step with community expectations.
In 2017, the Australian Tax Office (ATO) released findings that there are at least 2.4 million (about 30 per cent) of workers in Australia who have been underpaid their superannuation entitlements. This is a concern, as the purpose of superannuation is to provide income in retirement to substitute or supplement the age pension. Failure to make the appropriate superannuation payments results in the taxpayer having increased future age pension obligations.
The federal government takes the non-payment of superannuation very seriously, with the Treasury Laws Amendment (2018 Measures No 4) Bill 2018 recently passing the Senate. This bill will allow the ATO to instruct an employer to pay the SG amount and outstanding liabilities or face severe financial penalties and up to 12 months imprisonment, or both.
If the NSW government continues to fail to ensure that mayors and councillors in NSW are paid the SG (currently at 9.5 per cent), what kind of a message is this sending employers that also fail to make the appropriate payments? Many mayors and councillors rely solely on the income they derive from their duties on local government. What kind of community standard is being set from the continued failure to make the appropriate payment of superannuation?
In Victoria and Queensland, mayors and councillors are paid the appropriate superannuation entitlements. It is time to stop discriminating against mayors and councillors in NSW.
The Local Government Act was enacted 25 years ago. It has taken a quarter of a century to get to this point. We believe it is time to rectify a wrong, a wrong significantly out of step with community standards.
