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Rising super requirements ‘leading pain point’ for SMEs: ScotPac

by Charlotte Humphrys11 minute read

Future increases in the minimum super requirements have become the top regulatory challenge for SMEs, the non-bank lender has said.

Non-bank lender ScotPac’s SME Growth Index Report has been released and said that 67 per cent of small- to medium-sized enterprises (SME) with declining or stable growth identified increases in the superannuation guarantee as their top regulatory challenge.

The superannuation guarantee is the minimum amount of super an employer is required to contribute to an employee’s super fund. Between 2014 and 2021, the amount of super required to be paid by employers was 9.5 per cent and has since increased to 11 per cent.

Two further increases are set to come into effect, with the minimum requirement rising to 11.5 per cent in July 2024, and up to 12 per cent in July 2025.


The ScotPac report – which interviewed 727 SMEs with annual revenues of $1–$20 million – said that 60 per cent of SMEs in a revenue growth phase also reported the rising super requirements as their leading regulatory challenge.

The research was conducted by East & Partners and surveyed SMEs across various sectors including manufacturing, retail, property and business services, and construction industries.

The rising superannuation guarantee now outweighs labour laws and the Australian Tax Office’s (ATO) tax recollection efforts as the top challenge that SMEs are facing.

The report also revealed that 58 per cent of SMEs supported the relaxation of labour laws that have increased SME’s costs and administrative expenses.

It showed that 51 per cent of SMEs are seeking company tax cuts and relief from the ATO’s tax collection. According to researchers, 62 per cent of SMEs said that they had been affected by ATO debt in the past 18 months.

ScotPac’s report went on to outline that 43 per cent of SMEs want business and income activity statement requirements simplified. Of those that said they would like requirements simplified, 47 per cent were larger SMEs.

More than a third of SMEs (35 per cent) have also called for new regulation measures to support businesses with inflation and cost-of-living pressures and the subsequent effect inflation has had on their businesses.

ScotPac’s chief executive Jon Sutton said that the report confirmed that regulations affect SMEs “more acutely”.

He said: “In the current economic climate, SMEs are particularly sensitive to any cash flow and administration impacts associated with regulatory change, which explains why the super guarantee is a particular pain point.

“Unlike large corporations, SMEs generally don’t have dedicated teams to interpret regulatory changes, implement compliance measures and redraft company budgets.

“With the vast majority of Australia’s 2.6 million businesses being SMEs with less than 20 employees, it is important that regulators are mindful of the impacts of new regulations work collaboratively with business on their introduction.”

[Related: ATO chasing more than $39bn in debt from SMEs]

jon sutton scotpac ta


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