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What does a change of government mean for payroll?

Tracy Angwin /

It seems that businesses have heaved a collective sigh of relieve with the recent change of government.  No matter what your politics, the feedback we are getting at the Australian Payroll Association is that business confidence is up purely because there is a level of certainty.

One of the Coalition’s big ticket items is its proposed government paid parental leave scheme. Currently the government scheme is 18 weeks of pay, paid at the national minimum wage, which is currently $622.20 per week. The employer pays these payments in the same payroll frequency that the employee normally is paid.  The employer pays the employee once the funds have been received from Centrelink.

Employers have been complaining to us about the additional administration that this scheme causes them in double handling and reconciling of payments.  They feel they are the government’s pay office when it comes to parental leave pay.

One of the pleasing things about the Coalition’s scheme is that the payments will be made directly from Centrelink, removing this responsibility from employers.

A Labor announcement that was made a few months prior to the election was a change to how fringe benefits tax will be calculated on cars.  Not only did this cause several hundred immediate redundancies in the salary packaging industry, but it also worried employers due to the additional administration this would potentially cause them.

On July 19, Tony Abbott announced that there would be no changes to current FBT legislation in the event of the Coalition winning government.  Therefore we do not expect these changes to be legislated.

Lastly, we expect to see some changes in the timing of the current superannuation reform.  At the moment the superannuation guarantee rate is 9.25%. It is due to incrementally increase until it is at 12% in 2019-20. The Coalition is likely to change the timing of the increases over more years than the current plan.

If you have any questions about how the new government might affect your employment and payroll arrangements, please email me at [email protected]

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