The gig economy has grown in Australia by 50 per cent, from 100,000 to 150,000 workers over the last year. Web employment platforms have expanded to encompass more professions and industries, and as a result, the Association of Superannuation Funds of Australia (ASFA) is calling for legislative reform to ensure shifts in the economy don’t unduly impact these workers' retirement planning.
Martin Fahy, ASFA executive officer, said there was no time to waste in fixing the gig economy super settings. Gig economy platforms are showing enormous growth, so protecting superannuation is important for future-proofing these types of jobs. The gig economy can and should be a solution, rather than a problem, for funding retirement.
Fahy said that the gig economy can offer positive benefits and facilitate portfolio careers, particularly for those transitioning into retirement.
ASFA’s submission focuses on a few key points, including elimination of the $450 threshold for entitlement to the Superannuation guarantee (SG), SG for the self-employed, tougher sham contracting penalties, and the need for a new ‘dependent contractor’ category within the legislation for the SG.
ASFA recommends amending the law and creating a ‘dependent contractor’ category that falls between independent contractor and employee categories, to enhance protections and obligations. This will provide super to those within the gig economy who work like employees, but who do not have the associated benefits. ASFA is calling for the strengthening of sham contracting protections in the Fair Work Act.
About 50,000 Australian are thought to be affected by sham contracting, with some employers intentionally setting up contracts in an artificial way to avoid paying benefits.
About eight per cent of people in Australia hold down more than one job, with half of those people combining those jobs to reach the equivalent of a full-time job. Fifty-five per cent of those who hold multiple jobs are women.
The SG doesn't really cover independent contractors, meaning those on lower incomes could suffer. The way people work is changing with the gig economy, but about a quarter of self-employed people have no superannuation savings, with women predominantly affected.
ASFA research found that highly-paid temporary agency workers tend to receive the same entitlements as permanent workers, with low-paid casual workers often disadvantaged without paid leave and the risk of job loss, low incomes and fluctuating income.