Small business can’t shoulder rise in super burden: Employer groups

The industry body for small business has echoed calls by the Australian Chamber of Commerce and Industry to defer debate on the superannuation increase passed as part of the mining tax legislation.

The super increase will take the compulsory superannuation rate from 9% to 12% by 2019-20. The rise will be implemented in several steps, starting in July 2013 when the levy rises from 9% to 9.25% of income.

The ACCI yesterday unanimously passed a resolution saying the increase should be considered only after a way to fund it is found.

The chamber estimates that when fully implemented, the superannuation increase will amount to an extra $20 billion per year paid in employer superannuation levies.

The resolution also said Fair Work Australia should be required to take into account the increase in superannuation when setting minimum wages over the coming years.

In an open letter to Parliamentarians, ACCI chief executive Peter Anderson requested that the increase be decoupled from the Minerals Resource Rent Tax Bill.

“Doing so would recognise that the Superannuation Bill has such significance on employers and retirement incomes policy that it deserves objective analysis in its own right, and not to be marginalised by a debate between large and small miners about how the resource industry should be taxed,” he said.

Council of Small Business of Australia executive director Peter Strong said the significance of the legislation was likely to be more pronounced on small businesses.

“Big business can pay it – it’s the little family businesses that end up paying for it from their own income,” he said.

Strong said one of the problems with the blanket increase was that the ability to pass on costs differed from industry to industry.

“If you’re in retail, the rise is impossible to manage,” he said.

“Retail prices are decided by suppliers. In some cases [retail] rents still going up – it’s very difficult to absorb or pass on costs.”

Strong said that the super increase, which amounted to a pay rise, had to be offset by productivity gains.

“Otherwise there will be small businesses that close down as a result.”

Strong said that when it came to planning for retirement, it was only fair for all the community to contribute, so the cost doesn’t just fall on employers.