ATO delays higher superannuation charges


Trucking operators given three-month reprieve from new superannuation obligations, which threaten to significantly increase business costs

ATO delays higher superannuation charges
ATO delays higher superannuation charges
By Brad Gardner

Trucking operators have been given a three-month reprieve from new superannuation obligations, which threaten to significantly increase business costs.

Industry group NatRoad has won its attempt to delay the onset of the scheme, which will force companies to pay the 9 percent superannuation obligation on regular overtime earnings.

The Australian Taxation Office (ATO) originally planned to introduce the revised superannuation obligations on April 1, but will now hold off until July.

Industry groups fear the revised scheme will lead to a spike in employment costs, which will force companies to cut costs by turning to owner-drivers at the expense of employees.

"As labour costs represent a large proportion of total operating costs, cost-cutting is likely to involve a reduction in employment," Consultancy firm Meyrick and Associates warns.

Meyrick adds that almost all of the industry will be affected "due to the common incidence of overtime work for yard staff".

According to the firm, a company with as few as 20 drivers may have its superannuation obligations jump by as much as 52 percent.

"In dollar terms, a large operator with hundreds of employees could incur a $780,000 increase in its total employment cost, though this amount will vary a great deal between firms," Meyrick says.

Operators liable under the new scheme will also be hit with higher payroll taxes and insurance premiums, which the Australian Road Transport Industrial Organisation (ARTIO) estimates will increase by as much as 6 percent.

It says the ATO’s ruling may add an extra five percent to an operator’s annual transport bill.

The ARTIO says the problem will be exacerbated because superannuation obligations will increase without any productivity or efficiency gains.

It says there are instances where drivers earning $55,000 may actually take home up to $100,000 a year depending on the amount of overtime worked.

Under the ATO’s ruling, ARTIO argues companies will need to pay the 9 percent superannuation obligation on the extra $45,000.

The organisation also criticised the ATO’s decision to link superannuation to regular overtime work, saying determining what constitutes ‘regular’ is subjective and hard for a company to abide by.

"Determining when a driver’s additional hours become sufficiently ‘regular, normal, customary or usual’ could only be made in hindsight and only after the due date for contributions had passed," the ARTIO argues.


For the full story on the new superannuation scheme and what it means for the industry, see the March edition of ATN.

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