ATO clarifies super issue that won’t go away


Legislative changes from previous decade still has power to cause companies financial pain

ATO clarifies super issue that won’t go away
The ATO is working through issues with the transport industry

 

The Australian Taxation Office (ATO) is dealing with issues this year arising from a change in superannuation legislation five years ago.

The ability of the changes to affect trucking company finances came into sharp relief this week when the McAleese Group warned that it might payouts of $5-$10 million to employees of its Cootes subsidiary that surfaced after it bought Cootes.

"A large portion of any underpayment will form a claim on warranty insurance" that was taken out in the course of the takeover, McAleese says.

"The ATO issued advice in 1995 based on the law at that time which provided that Superannuation Guarantee (SG) was calculated on either an employee’s Ordinary Time Earnings or some other earnings base as specified in a statute or under an industrial award," an ATO spokesperson tells ATN. 

"This was repealed with effect from 1 July 2008.

"In May 2009, SGR (Superannuation Guarantee Ruling) 2009/2- Superannuation Guarantee the meaning of the terms ‘ordinary time earnings’ and ‘salary or wages’ was published. 

"Because of the delay in publishing the ATO view, the Commissioner provided that the date of effect of the ruling would be 1 July 2009. 

"This ruling explains the Commissioner’s view regarding how employers should calculate their superannuation obligations for quarters starting 1 July 2009 and all later quarters. 

"This has been the ATO view since then.

"We have been working with the trucking industry to ensure employers understand their superannuation obligations.

In the face of strong interest in its market update, McAleese sought to clarify its financial position, acknowledging that its "current net debt level is too high" but stating that it would be within its banking covenants at June 30.

"The banking group has indicated its support for the company’s restructuring initiatives and actions to reduce net debt," the company statws.

Drilling into its divestment timings, McAleese reveals:

  • surplus Cootes Transport trucks sale to take about 4-6 weeks to complete and slightly longer for tankers and ancillary equipment.
  • surplus larger crawler crane fleet sale to be complete in the next 3-4 months. Most, if not all, to go to the Middle East or Latin America. Smaller 20 tonne Franna cranes are Australia-specific and will be auctioned domestically in tranches over the next six months.
  • Liquip Refuelling bids to be shortlisted over the coming weeks with the aim of completing the sale in the next month or two.
  • Cloncurry Quarry could take 1-3 months to sell, but may take longer.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook