DSPANZ provided a submission on the Treasury's Securing Australians' Superannuation - Budget 2023-24 consultation on 3 November 2023.
While we support the policy intent behind increasing the frequency of SG contributions and investing in SG compliance, we raised feedback on the timeframe to design and deliver payday super. If we adhere to current policy and consultation processes, we anticipate that the ATO and DSPs would likely have less than 12 months for implementation and transition all employers and employees onto payday super.
Considering the above, we proposed the following two options for moving forward with payday super:
- If the commencement date cannot be changed, the scope of what can be reasonably delivered by 1 July 2026 must be reduced.
- If the commencement date can be adjusted, it must be pushed back until at least 1 July 2028.
Outside of feedback on the timeframe available, we also advocated the following positions:
- Employee onboarding software will continue to play a vital role in the superannuation contributions data supply chain. We believe that software developers should be able to operate within clearly articulated regulatory boundaries and have flexibility with respect to their commercial and business models.
- Government should recognise that business digitisation and ongoing regulatory changes impacting employer operations (e.g. SuperStream, STP) have significantly increased operational costs for software providers as our industry has incorporated new administrative, technical and compliance requirements. DSPs cannot pass all these costs on to employers as the end users.
- As employers have embraced digitising their businesses, they seek more capability from their software and further ways to reduce administrative burden. However, after COVID and significant CPI-related increases, many employers face significant costs limiting their ability to pay for additional functionality, regardless of the benefits. This has led to commercial partnerships between DSPs and super funds that have supported product development and enabled the distribution of new functionality to employers at no additional cost.
- The consultation paper highlights concerns about super fund ‘advertising’. Our view is that this is a much broader conversation about how superannuation funds engage the market. As such, any approach must take a whole of economy or market approach and not be limited to a single mechanism, channel or strategy. Including advertising as part of this consultation is a distraction from the core requirements of this policy.
- The ATO should continue providing wholesale services to DSPs, who can integrate and package these services within their retail business software. Only if there has been a market failure would we consider it appropriate that the ATO develops ‘retail’ solutions. DSPANZ is concerned about the commentary suggesting that the ATO may develop a retail onboarding service that would target new employees. It is not appropriate nor required in the market.
- Developing a retail only employee onboarding solution is not aligned with the ATO’s 2030 tax just happens vision and the broader OECD Tax Administration 3.0 blueprint. Efforts should be focused on supporting software to deliver streamlined processes, which includes further investing in ATO’s existing API services that support employee registration and stapling.
- We should have a broader conversation about making high-quality ATO data more available to minimise errors and improve data quality across the superannuation ecosystem. This will require a change to the Tax Administration Act 1953.
- DSPs see value in the ATO delivering prompts and nudges about SG obligations through software. These notifications should not be considered tax advice.
Access a full copy of this submission here.