Pages 3 to 8, attachment A of the ATO's response, contain the ATO's response to the IGT's recommendations.
These responses have been moved into the body of the report to remove duplication.
SECOND COMMISSIONER OF TAXATION
Mr Ali Noroozi
Inspector-General of Taxation
GPO Box 551
SYDNEY NSW 2001
Review of the ATO's administration of the Superannuation Guarantee Charge
Thank you for your email of 16 February 2010, submitting the final draft report of your Review into the ATO's administration of the Superannuation Guarantee Charge.
We are pleased that the review acknowledges that the ATO has taken a number of positive steps to improve its responsiveness to employee complaints.
We note that of the twelve recommendations from this review, five (recommendations 2 & 11 and large parts of 3, 9 & 10) are recommendations for the Government to consider.
Of the seven recommendations and three part recommendations directed to the ATO, we have agreed to nine and disagreed with one.
The ATO's detailed response to your specific recommendations is at Attachment A.
We would also like to comment on some of the findings and other aspects of the report.
Finding 2.6/1 states that:
Over an eleven year period, the difference between SG Charge raised and SG Charge collected has accumulated to $936.1 million, increasing substantially from 2000-01. Together with the current SG Charge debt relating to insolvent employers, approximately $600.8 million in SG Charge raised by the ATO has not been recovered, with most of this debt having been written-off and representing known lost employee retirement savings.
We note that APRA figures, for the same 11 year period, indicate employers have contributed $482.2 billion on behalf of their employees. Non payment of $936 million represents less than 0.2% of these contributions. We think that this is important context that should be added to the finding.
This finding refers to the ATO being 'heavily reliant on EN complaints as a source of risk identification in the SG system'.
We are committed to investigating every employee complaint we receive on SG in a timely fashion, as we believe this is essential to maintain community confidence in the system.
However, 27% of our compliance resources working on SG this year are working on cases other than complaints. These cases are selected using a range of data matching and other techniques to identify risk. SG liabilities raised per case is generally higher from this work than from the complaints based work.
Accordingly, we do not accept that we are heavily reliant on complaints to identify risk. But we are committed to addressing all employee complaints.
I would like to acknowledge the co-operative and professional approach that Mr Andrew McLoughlin and Mr Tasos Mihail have taken throughout the course of this review.
Thank you for the opportunity to respond to this final draft report.
Second Commissioner Compliance
12 March 2010