Millennials are entering a very different workforce from the one that existed 30 years ago when compulsory superannuation was adopted. This has led to calls to take a fresh look at the super system and make some major reforms to avert financial disaster for the next generation of Australian workers.
The revamp is needed with the rise of the gig economy. Work fuelled by apps that summon drivers, deliveries and all kinds of freelance workers, has seen more than a million workers operate in a netherworld where they are not paid traditional entitlements like superannuation, according to the ABC TV Investigative journalism programme Four Corners.
Associate Professor Sarah Kaine, a gig economy specialist, said: “From what we understand, being paid superannuation in a gig job is extremely rare. Largely because gig workers have been intentionally classified, not as employees, but as independent contractors, or entrepreneurs, or freelancers. Often deliberately, to avoid such responsibilities as superannuation on behalf of the organisation.”
She added: “I think it's a huge problem, and I think we are not dealing with it now. And while that might be okay temporarily, it's gonna come back and bite us in five, 10, 15, 20 years. As people who have relied on freelance work, gig work, come to retire. Then that societal risk if you'd like that we've accepted allowing this kind of work, comes back to those of us who've been paying tax, comes back to those who will be paying tax who'll have to bear the burden of people without enough superannuation.”
In addition, other workers are missing out on super with Australian Taxation Office data for 2015 showing that employers failed to pay nearly A$3 billion (US$2.3 billion) in super owed to employees. That was more than 5% of all the money due. Another study puts the level of unpaid super at nearly A$6 billion a year, with 2.7 million people losing out.