The independent senator David Pocock has joined a push by the Greens and unions to criminalise the intentional non-payment of superannuation, after the measure was omitted from Labor’s industrial relations bill.
The Albanese government’s legislation has proposed to criminalise wage theft but not super theft, which is estimated to cost workers up to $5bn a year, and Pocock said if the government is “serious about closing loopholes then the intentional non-payment of super should also be criminalised”.
It comes after Guardian Australia revealed in September that the Australian Taxation Office has never used its indirect criminal penalties to punish non-payment of super.
The powers require the ATO to first issue a direction to pay super, the failure to comply with which is a crime. The tax office has never issued a direction to pay, but uses non-criminal penalties to recover hundreds of millions of dollars of super a year.
The Greens have called for super theft to be added to the government’s closing loopholes bill and are now backed by Pocock, the Australian Council of Trade Unions, the construction union, the United Workers Union and the Australian Manufacturing Workers Union.
The Coalition is opposed to the bill. Labor will need the Greens’ support and Pocock will also be influential, given he was the swing vote for last year’s secure jobs better pay bill.
Pocock told Guardian Australia “the intentional non-payment of super is a form of theft that impacts not only the individual worker but our society at large by increasing the burden on the aged pension”.
Pocock, who wants the bill to be split, said “this omnibus bill includes many complex and contested elements, but it’s clear that some elements, like making it easier for first responders to access workers compensation for PTSD, have broad support and should be dealt with separately”.
“Criminalising the intentional non-payment of super would appear to also have sufficient support to pass,” he said.
“At the same time, I also urge the government to do more to ensure timely payment of invoices for small businesses and progress payday super reforms.”
The Albanese government hopes unpaid superannuation will be eliminated by payday super reforms, which require employers to pay super at the same time as wages rather than quarterly or six-monthly.
In September the financial services minister, Stephen Jones, said that “payday super, phased in by 2026, should reduce the problem to zero because the wages and superannuation are being paid at the same point in time”.
A consultation paper for the reform, released on Monday, described failure to pay superannuation as “equivalent to wage theft”.
The government has also agreed with a Senate inquiry that recommended the new offence should apply to all forms of remuneration, including superannuation.
The Australian Council of Trade Unions president, Michele O’Neil, said “wage theft robs working people of money they are rightfully owed for their work”.
“Super theft compounds this, taking money from workers that would be built on due to interest over decades to provide security and dignity in their retirement,” she said. “Super theft is a serious problem that needs addressing and should be covered by the wage theft provisions in the closing loopholes bill.”
Business groups including the Council of Small Business Organisations Australia and the Australian Chamber of Commerce and Industry (ACCI) have rejected the proposal.
The ACCI chief executive, Andrew McKellar, said: “Such a change would be superfluous. Legislative changes earlier this year inserted a right to superannuation in the national employment standards … [ensuring] that employees covered by the act have an enforceable right to superannuation.
“Threatening employers with jail for unpaid super will do nothing to rectify the major cause of underpayments in our country – Australia’s unreasonably complex workplace relations system,” he said.
