For 2020–21, we estimate a net super guarantee gap of $3.6 billion or 5.1% of the estimated theoretical Super Guarantee liability. Overall, the gross gap of 6.2% of the theoretical liability indicates that we are collecting around 94% of the amount of super guarantee contributions employers are required to make without intervention from us.
We generally highlight the super guarantee gap in net gap terms as it recognises the effects of our compliance activities. The gap without taking account the impact of our compliance activities is referred to as the gross gap.
To calculate the theoretical liability, we apply a hidden wages uplift of 2.3% average across all industries to the Australian Bureau of Statistics (ABS) measure of wages and salaries. The revised averaged 2.3% uplift is regarded as a better long-term estimate of the extent of hidden wages. This year we have applied industry-specific hidden wage uplifts to reflect the varying extent of hidden wages across industries, rather than economy-wide. This averages out to close to 2.3% economy-wide but importantly facilitates better interaction with other industry-specific aspects of the model including industry average contribution rates, excess contribution rates and the impact of overtime across industries.
The benefit of estimating this gap is in monitoring trends and developing insights over time. While there has been a general downward trend in the size of the net gap from 5.7% in 2015–16 to 5.1% in 2020–21, the net gap has remained steady over the past five years.
We saw the largest increase in voluntary contributions in 2019–20, which we suspect reflects the link between payment of super contributions and pay as you go (PAYG) withholding by employers. PAYG withholding is linked to the ability to claim stimulus payments such as Cash Flow Boost. This had a partial effect of reducing both the net and gross gaps.
Table 1 below shows data for 2015–16 to 2020–21, including:
- theoretical super guarantee contributions
- compliance amounts
- amounts reported
- gross and net gap estimates.
Across 2020–21 the number of employers rose from around 910,000 at June 2020 to around 1 million by June 2021. In 2020–21 there were approximately $66.8 billion of superannuation contributions reported on behalf of about 12.2 million employees.
|
Element |
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
|---|---|---|---|---|---|---|
|
Gross gap ($m) |
3,872 |
3,510 |
3,957 |
4,300 |
4,318 |
4,421 |
|
Amendments ($m) |
579 |
744 |
861 |
855 |
709 |
802 |
|
Net gap ($m) |
3,293 |
2,766 |
3,096 |
3,445 |
3,609 |
3,619 |
|
Super guarantee paid ($m) |
54,928 |
56,521 |
59,277 |
62,275 |
65,621 |
67,632 |
|
Theoretical super guarantee liability ($m) |
58,221 |
59,287 |
62,373 |
65,720 |
69,230 |
71,251 |
|
Gross gap (%) |
6.7 |
5.9 |
6.3 |
6.5 |
6.2 |
6.2 |
|
Net gap (%) |
5.7 |
4.7 |
5.0 |
5.2 |
5.2 |
5.1 |
Table 2 shows our estimates of the gross and net gaps without an uplift the estimate of hidden wages for 2015–16 to 2020–21.
|
|
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
|---|---|---|---|---|---|---|
|
Gross gap without hidden wages (%) |
4.2 |
3.4 |
3.8 |
4.0 |
3.7 |
3.7 |
|
Net gap without hidden wages (%) |
3.1 |
2.1 |
2.4 |
2.7 |
2.7 |
2.5 |
Figure 1 displays the gross and net gap as a percentage of theoretical contributions over the same period with the industry-disaggregated hidden wages uplift.
Figure 1: Super guarantee gross and net gap estimates (percentage of theoretical contributions), 2015–16 to 2020–21
* Estimates are subject to revision of underlying data by the ABS.