The Joint Bodies broadly support the Government’s proposed policy of introducing PDS. The introduction of PDS would get SG contributions into employees’ superannuation accounts sooner and take important steps towards addressing the SG gap, which was $5.2 billion in 2021–22 alone.

It is pleasing to see that many of the recommendations we made in our joint submission dated 8 November 2023 on the consultation paper titled ‘Securing Australians’ Superannuation’ have been incorporated into the design of the new SG charge.

We do have concerns about some design aspects of the new SG charge and the operation of the PDS regime. These concerns include the following:

• the proposed start date of 1 July 2026 is unreasonable and should be deferred for, ideally, 24 months, but at least 12 months
• the window of seven calendar days for SG contributions to be allocated to members’ superannuation accounts without employers having an SG shortfall is unreasonable and should be a longer period
• the proposed repeal of the definition of ‘approved clearing house’ detracts from the broader and more important issue of the role played by clearing houses in the payment process, which requires further consideration
• the proposed design of the changes to the maximum contribution base and the current operation of the employer shortfall exemption certificate are impractical and require further urgent consultation
• the absence of a power of remission for the Commissioner to partially or fully remit penalties is inconsistent with the objective of ensuring that the imposition of penalties on employers is proportionate and properly reflects the nature, extent, and specific circumstances of an employer’s non-compliance.