At the moment, some employers do not have to withhold PAYG tax or SGC for some workers, ESPECIALLY if those workers are not classified as permanent employees: ie casual workers; workers who work below a threshold number of hours per week; workers earning less than a certain threshold amount of income; independent contractors.
There is an administrative burden for businesses to be the collection-agent for the Government, and so if a business can legitimately arrange its affairs to minimise that burden, it will probably do so. So… businesses might insist on categorising workers as independent contractors, and so leave the issues of SGC & PAYG to the worker to sort out. You can guess that quite a few of them don’t do either. This means that the government misses out, or at least has to spend a lot of resources to chase. It also means that the worker (refusing to delay gratification by contributing to his own Super), is more likely to be a burden on the State later on.
If a business (let’s say a large food retailer) employs a lot of young people who only work part-time as casuals, the business might be exempt from paying them SGC unless the worker earns more than a specific threshold. Similarly, as far as that employer is concerned, those young part-time workers might not earn enough to pay tax, due to the tax-free threshold. Of course if any of those workers have another job, or receive social security benefits, the Government will have to chase them for their tax.
I predict that the Australian Government will quietly expand its data-matching computer programs, and will legislate to compel all workers of any sort to file regular (probably monthly or quarterly) “Activity Statements” similar to what businesses currently file. These will cover gifts, loans, CGT, income from all sources AND Super.
While this prediction may seem far-fetched, and rather Orwellian, it is foreseeable as a mechanism to close a revenue-hole in the current system. It might also find favour with Australian businesses, if it were to partially relieve them of the compliance burden on behalf of their staff. More retirement savings AND more tax equals happier government. Throw in happier businesses, and you just might have a winner. Maybe.
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