EXPLANATORY STATEMENT

Select Legislative Instrument 2010 No. 140

 

Issued by the authority of the Minister for Financial Services, Superannuation and Corporate Law

Superannuation Guarantee (Administration) Act 1992

 

Superannuation Guarantee (Administration) Amendment Regulations 2010 (No. 1)

 

Section 80 of the Superannuation Guarantee (Administration) Act 1992 (the Act) provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.

 

In the 2008-09 Budget, the Australian Government announced that it would introduce an optional free superannuation clearing house service for small businesses, honouring a 2007 election commitment. Small businesses would be able to discharge their superannuation guarantee obligations by making a single payment to the clearing house. The clearing house would then distribute the contributions to the relevant superannuation funds, as selected by employees.

 

On 6 November 2009, the Government announced that the clearing house service for small businesses would be delivered through Medicare Australia and would be available from July 2010.

 

Legislative amendments contained in the Tax Laws Amendment (2010 Measures No.1) Act 2010 (the TLA Act) support the clearing house measure by allowing small businesses to discharge their superannuation guarantee obligations by making payments to an approved clearing house on behalf of their employees. The TLA Act also provides that an approved clearing house is taken to be a body specified in the regulations.

 

The Regulations specify Medicare Australia as a body for that purpose.

 

The Act specifies no conditions that need to be met before the power to make the proposed Regulations may be exercised.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on the commencement of Part 1 of Schedule 1 of the TLA Act to align with the commencement of the provisions in that Act related to the Government’s small business superannuation clearing house initiative.

 

Given the straightforward nature of the Regulations no public consultation was undertaken.

Authority: Section 80 of the Superannuation Guarantee (Administration) Act 1992.