I want to talk about the problem that we're tackling here, and I want to give an example that Debbie, in my electorate of Macquarie, shared with me. She wrote to me a few months ago about a situation that faced her husband. They worked out last year that her husband's workplace had not been paying any contributions into his super account for some time. In fact, it came to light because their super fund said: 'Is he still working there? Because nothing is going in.' And he was still working at that organisation.

Debbie did some research herself, and she could see that they had underpaid her husband around $8,000 in super at that time. I want to say that, as we've gone through this process, we've worked out that it was a much greater underpayment than what she'd initially thought. So her husband did what most people would do. He gently raised it with his employer, and he was told that they were aware of it, that they were behind and that they really weren't that keen to notify the ATO, as they'd already previously been on a payment plan. A week later, having thought about it some more, he again raised it and was told that they had gone to the ATO and were on another payment plan.

At that point they'd done the right thing. They tracked it and they could see the payments going in. However, about a year on from when all of this happened and was revealed, Debbie's husband decided to put in his notice, and he was told that he could finish up, with his last pay the following Tuesday. Debbie of course checked to see that everything was in order, and she found that by then his super was short by about $19,000. That's pretty much the point at which Debbie reached out to me.

This is one of the problems with the current system. It is hard to track the quarterly payments; you've got to crunch the numbers and do the maths. That's one of the problems that we're tackling here. People need to be able to see those regular payments and notice more quickly when they're not in there. It needs to be easier to see. I'm not going to go into more details about that particular employer, but what I do want to say is that, as we worked through this process, it turned out that he was not $19,000 short in super but more like $23,000 short in super. That situation is in the process of being rectified, but it's going to take a really long time for that payment plan to return to Debbie's husband the money that he has earned and that he is entitled to. It is an outrage that a small number of employers are treating their employees in this way.

As Debbie and other people say, what about the interest that has been lost? Fortunately, the repayment plan that's in place to put in the money that should have been put in in the first place is going to include a portion for lost interest. That was the issue that Belinda raised with me. Belinda is in her 50s and has a very low super balance. She raised with me that it might be much better if, just as she gets paid weekly or fortnightly, she receives her super in the same way. That's also the logic that we have applied. Those opposite say that this is all happening too soon, but there should never be a case where, for months and years, people are not paid super.

Let's look at what unpaid super is costing our communities. Let's start with the big picture. According to Super Members Council, around 3.3 million Australians were not paid the super that they earned in the 2022-23 year. That's just in one year. Unpaid super is costing Australians around $5.7 billion each year, or $110 million a week, according to the council—a loss that is profound for the people affected.

Let's bring it from the country down to the state. In New South Wales, unpaid super cost over a million workers $1,760 each on average, or a combined $1.8 billion. That represents 29 per cent of the workforce. We're not talking about insignificant numbers. Over six years, unpaid super has been rising steadily in New South Wales, costing workers a total of $9.9 billion. The average Australian worker could be short-changed more than $30,000from their final retirement nest egg if those figures are allowed to continue.

I'm going to take it down one layer even further. Let's talk about Macquarie. In Macquarie, 18,450 workers, or 26 per cent of the workforce, have been underpaid, with an average underpayment of $2,130. Over the course of 2022-23 that's nearly $40 million, and, from financial years 2017-18 to 2022-23, that's $183 million. We're talking big amounts of money. For my neighbouring electorate of Lindsay, we're talking 26,500 workers who are underpaid, or 29 per cent of the workforce. That is some indication of the scale of the problem. People in Lindsay, unfortunately, find themselves in the top 10 electorates in New South Wales with the highest levels of unpaid super.

Having been an employer myself for nearly 25 years before coming to this place, I want to be very clear that I recognise that most employers do the right thing, and, where they make an error, they work very hard to correct it. One part of this new legislation will make it much easier for an employer to pick up a mistake and to quickly rectify it. It's much easier to rectify a two-week or four-week failure to pay super than it is a six-month or 12- month failure to pay it.

I really want to make it clear: we recognise that most employers do the right thing. We also recognise, though, that when it does happen, this issue disproportionately affects more vulnerable Australians, and that includes women. That's because those on lower paid, casual and insecure work, who are more likely to be women, are more at risk of missing out on their super. What we have is a once-in-a-generation opportunity to—it's a reform to fix unpaid super. That's what payday super is. The reform will help workers know that they are receiving the super they're owed, when they are owed, and it helps employers know that they are paying the super they owe, when it is owed.

Let's talk about how this is going to work in practice. From 1 July next year, employers will be required to pay superannuation guarantee contributions at the same time as wages, instead of quarterly. Employers will have to ensure that contributions are received by the employee's super fund within seven business days of payday. The change, as I say, makes it so much easier for employees to track their super and for the ATO to detect missed payments earlier, before those debts blow out. The legislation also updates the superannuation guarantee charge, which is the penalty that employers face when they fail to pay super on time. Under the new framework, the super guarantee charge will apply for each payday an employer fails to pay super in full and on time. So, if you are doing the right thing, there is no penalty.

I know there will be people who really want to know the details, so I am going to give some detail on this. The updated super guarantee charge includes notional earnings. This compensates employees for the investment returns they missed out on due to late payment. As my constituents say, that is absolutely a key factor in their minds—that if payments are missed, they feel they should be compensated for the lost interest. The updated super guarantee charge also includes an administrative uplift, which is an additional charge to reflect the cost of enforcement and to incentivise voluntary rectification. It can be reduced for employers who voluntarily disclose and have a good compliance history, because we do want to encourage and reward good behaviour. The charge also includes a choice loading, which is an additional penalty if the employer fails to pay into the employee's chosen fund. Employers who continue not to pay, even after the ATO has raised a superannuation guarantee charge, will face higher penalties of up to 50 per cent of the unpaid amount. These changes are designed to prompt employers to fix mistakes quickly and to ensure that workers are fairly compensated when employers fall short.

In terms of enforcing these changes, the ATO will use the Single Touch Payroll data—which employers already report—and they'll match it with data from super funds to detect missed payments in close to real time. This data-matching capability allows the ATO to intervene earlier, reducing the risk of large debts building up and increasing the chance of recovery. I know, as a former small business operator and as someone who spends a lot of time talking to small businesses, that realising there has been an error, or an oversight, sooner is much better than having the error blow out for months and months and getting a big shock when you realise there is an issue.

The next part of this reform is about supporting employers to meet their obligations. We are going to have the ATO adopt a facilitative compliance approach in the first year. In other words, employers who make a genuine attempt to comply, even if they face technical issues, will not be targeted by ATO compliance. The reform also helps employers by aligning super with payroll. This reduces that end-of-quarter admin pressure and the risk of large liabilities. That is a very real and present issue.

I note that the previous opposition speaker said this is too quick and too soon and needs to be delayed. But this legislation must pass as soon as possible so that employers, payroll providers, super funds and the ATO have time to build the systems needed for implementation by 1 July next year. That's an eight-month period for them to do that work. The longer we wait, the more workers will miss out and the harder it will become to recover unpaid super.

I want to leave you with an example of the difference this can make for someone. I want to talk about a young worker. For the average 25-year-old worker's retirement balance, this system of paying super when the person gets paid will boost their retirement savings. It's the equivalent of receiving an extra $6,000 in today's dollars. If the worker is missing out on the super, the impact is even more significant. In a typical unpaid super case for a 35-year-old, recovering their superannuation leaves a much bigger dent in their retirement balance. We are talking about tens of thousands of dollars.

So this is the time to do this. We don't need any pushback. It would be fantastic if the whole parliament recognised that this is fair for workers. It will actually work for employers—most of whom are already doing the right thing —and help them identify mistakes earlier. And it will ultimately lead to better retirement balances for workers. That's something we're all trying to achieve so that we can take pressure off our other systems down the track. I commend the bill, but not the amendment, to the House.