What is SuperStream?

SuperStream is a government reform aimed at improving the efficiency of the superannuation system. Under SuperStream, employers must make super contributions on behalf of their employees by submitting data and payments electronically in a consistent and simplified manner.

How will SuperStream benefit employers?

These changes have a range of potential benefits for employers, including:

  • The opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to

  • Less time spent dealing with employee data issues and fund queries

  • Greater automation and reduced cost of processing contributions and payments

  • More timely flow of information and money in meeting your superannuation obligations

 Who does SuperStream apply to?

SuperStream is mandatory for all employers making super contributions, APRA-regulated super funds, and self-managed superannuation funds (SMSFs) receiving contributions.

Why is SuperStream being introduced?

The main purpose of SuperStream is to ensure employer contributions are paid in a consistent, timely and efficient manner to a member’s account. The change also removes many of the complexities employers currently face as a result of funds being able to set up different arrangements for accepting contributions (due to the lack of common standard).

When do I have to start using SuperStream?

If you have 20 or more employees (medium to large employer) SuperStream started from 1 July 2014. From that date, employers needed to start implementing SuperStream and have until 30 June 2015 to meet the SuperStream requirements when sending superannuation contributions on behalf of employees.1

The ATO are facilitating the implementation of SuperStream for employer contributions by coordinating the introduction of compliant SuperStream solutions. You will need to work with your service provider to decide when best suits to make the change.

If you have 19 or fewer employees (small employer), SuperStream starts from 1 July 2015. You have until 30 June 2016 to meet the SuperStream requirements when sending superannuation contributions on behalf of your employees.

What are my options for meeting SuperStream?

Every business is different, so there’s no ‘one size fits all’ approach to adopting SuperStream.

Employers have options for meeting SuperStream – either using software that conforms to SuperStream; or using a service provider who can meet SuperStream on your behalf. We recommend that you start investigating your options now.

Your options may include:

  • Upgrading your payroll software

  • Obtaining accounting software that includes a payroll function

  • Using an outsourced payroll function or other service provider

  • Using a commercial clearing house or the free Small Business Superannuation Clearing House (19 or fewer employees)

 Your default fund may also have its own electronic channel that can be used during the transitional period up to 30 June 2016. This fund can provide you with details about how to comply with the SuperStream using their preferred facilities.

Do I need to collect additional information to make contributions using SuperStream?

Yes. To support contributions being made using the SuperStream standard employers will need to collect some new data that will be included in their payroll file to facilitate electronic processing.

For existing employees, simple processes will be implemented to enable employers to obtain this information.

What to do next?

Contact our office and ensure that you are prepared for SuperStream, by discussing the various options available to you.

17th November 2014
This editorial piece appeared in The Australian November 7 2014

Tony Abbott did not make any specific announcements about GST in his Tenterfield speech but he has opened the door for it to be debated. The need for a contest of ideas is paramount. Australians deserve better than a negative pol­iticised debate centred on short-term revenue problems — the need for a sustainable tax base has never been more acute.
The government has said it is ready to work with the states on changes to tax, by lifting the rate of the GST or broadening its base. Let’s seriously consider both.

Queensland’s Chamber of Commerce and Industry found that the three biggest GST exemptions — food, health and education — added up to almost $10 billion. Removing these exemptions and/or lifting the tax rate would enhance efficiency, reduce compliance costs and provide additional revenue to fund the removal of inefficient taxes — surely a better option than the Band-Aid tax approach of the past two decades.

Australia can learn a lot from New Zealand’s ongoing tax reform, which has resulted in surplus forecasts for next year and a prediction of 4 per cent economic growth across the next 12 months. This doesn’t compare apples with apples, but New Zealand has rebounded with its first surplus since 2008 because of significant changes to its tax system, including broadening the GST base and lowering top personal tax rates.

Successive New Zealand governments have sought to maintain a broadbase, low-rate approach to their tax base because it promotes fairness, economic ­efficiency and revenue integrity, and keeps administration and compliance costs low.
It is hard to argue with this approach or to ignore its success. Australia should consider doing the same, focusing on the medium and long-term sustainability of the tax base, particularly in the context of an ageing population and our federal, state and local government framework.

In 2010 the New Zealand tax reform package increased its GST rate from 12.5 per cent to 15 per cent and made the tax broader than it is in most other developed countries. Successive governments rightly resisted calls to narrow it. New Zealand’s GST is the envy of many other countries and represents 10 per cent of gross domestic product, compared with 3.3 per cent in Australia.

Providing taxpayers with a reasonable degree of certainty is critical to maintaining the integrity of the tax system. Another lesson we could learn from New Zealand is in its generic tax policy process, which has been followed by successive New Zealand governments since 1994.

The GTPP sets out the rules on developing, enacting, implementing and reviewing tax policy, and is admired internationally as a reform process that enables the government to develop tax law in close consultation with business, tax professionals and stakeholders, encouraging early consideration of key policy elements.
The advantages of a holistic bipartisan approach to tax reform include benefits to national competitiveness, personal incentives to work and take risks, and an ­efficient, more effective transfer payment system, while maintaining our sense of egalitarianism and increased financial support for those less well off.

Serious, grown-up tax reform will never be a short-term vote winner. The Prime Minister needs to make tax reform the centrepiece for the next election and let the people decide. Introducing ­institutional arrangements to ­future-proof tax reform from changing political environments is also a necessity.

Australia must respond to today’s challenges in a concerted and decisive manner. The federal and state governments must lay the foundations today if our country is to ensure that it continues to enjoy strong economic growth and prosperity well into the future. There is simply no substitute for good forward planning and timely action.

27th October 2014

Federalism and Tax Reform

The Prime Minister’s 25 October 2014 speech at the Sir Henry Parkes Commemorative Dinner contains a number of interesting comments about the interaction between the two major reform projects, federalism and taxation:

  • The current system of Federation is unsatisfactory as it is hard to know who is in charge. The result is duplication, buck passing and higher costs.
  • The Federation White Paper will discuss options about how to harmonise revenue and spending responsibilities. For example, the States’:
    •  Spending responsibilities could be reduced – this would not necessarily mean the Commonwealth taking over responsibility for delivery of functions or a one-size fits all approach to service delivery. Rather, it could lead to a situation where funding was delivered through an individual entitlement supplied through a market along the lines of the NDIS; or
    • Revenue power could be increased – e.g. changes to the indirect tax base with compensating reductions in income tax.
  • It is important to avoid increases in the overall burden of tax. The Government is looking to make existing taxes lower, simpler and fairer.
  • What is needed now is not a final answer but a readiness to consider possibilities, to engage in debate, and to shoulder our collective responsibility for making our country all that it can be. At this stage no one should be asked to play the ‘rule-in or rule-out’ game.
  • As for process, the States are currently preparing initial submissions on federalism. A green paper will issue in the second half of 2015 and a white paper will follow in the run up to the next election.

20th October 2014

New ATO Code of Settlement
As indicated in last week’s Tax Bulletin, the ATO has now published its revised, two page, Code of Settlement. Key features of the new Code include:

  • A focus on facilitating settlements and resolution
  • Clarification that settlement is possible at any time during the dispute process (including the audit stage)
  • A statement that settlements should provide a reasonable basis for similar issues in future years
  • Four model settlement deeds (including one specifically for GST)
  • Practical guide and examples

PS LA 2007/5 – the ATO’s previous guidance on settlements – has been withdrawn.

14th October 2014

Senate votes to refer ‘tax avoidance and aggressive minimisation’ by companies to Economics References Committee in response to report on ASX 200 entities

On 2 October 2014, Senator Milne (Tasmania, Leader of the Australian Greens) – supported by ALP and PUP – successfully moved that the following matter be referred to the Economics References Committeefor inquiry and report by the first sitting day in June 2015:

Tax avoidance and aggressive minimisation by corporations registered in Australia and multinational corporations operating in Australia, with specific reference to:

  • The adequacy of Australia’s current laws;
  • Any need for greater transparency to deter tax avoidance and provide assurance that all companies are complying fully with Australia’s tax laws;
  • The broader economic impacts of this behaviour, beyond the direct effect on government revenue;
  • The opportunities to collaborate internationally and/or act unilaterally to address the problem;
  • The performance and capability of the Australian Taxation Office (ATO) to investigate and launch litigation, in the wake of drastic budget cuts to staffing numbers;
  • The role and performance of the Australian Securities and Investments Commission in working with corporations and supporting the ATO to protect public revenue;
  • Any relevant recommendations or issues arising from the Government’s White Paper process on the ‘Reform of Australia’s Tax System’; and
  • Any other related matters.

The decision was preceded by the release of the Who Pays for our Common Wealth? Tax Practices of the ASX 200, a report produced by Tax Justice Network – Australia and United Voice , in consultation with Dr Roman Lanis of the School of Accounting at the University of Technology Sydney. Using the methodology effective tax rate [ETR] = tax paid / pre-tax profit, the report found that the ETR of ASX 200 companies over the last decade is 23%, with nearly one-third having an average ETR of 10% or less.

Dr Lanis and a UTS colleague, Ross McClure also wrote on the topic ‘What’s needed for Australia to seriously tackle tax avoidance’ in The Conversation. Senator Milne also moved a motion (which was agreed to) urging the government to ‘introduce legislation that requires Australian corporations to disclose all foreign subsidiaries in their financial statements’.

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