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Rising Super Guarantee Emerges as Leading Regulatory Pain Point for SMEs - ScotPac

Rising Super Guarantee Emerges as Leading Regulatory Pain Point for SMEs - ScotPac

(15 May 2024 – Australia) Two-thirds of Australian SMEs say the rising Superannuation Guarantee is having a major impact on their business, outweighing new labour laws and ramped-up ATO collection activities at the top of the list of small business regulatory challenges.

The headline finding is contained in the 10th anniversary edition of ScotPac’s SME Growth Index Report, Australia’s longest-running sentiment check of small and medium businesses.


From 2014 to 2021, Australian employers paid 9.5 percent of each eligible employee’s earnings into their nominated superannuation fund. However, the figure has since risen to 11 percent, and two further increases are planned to 11.5 percent in July 2024 and 12 percent in July 2025.


Both SMEs with declining or stable growth (67 percent) and those in a revenue growth phase (60 percent) identified the rising superannuation guarantee impost as their leading regulatory pain point.


ScotPac CEO, Jon Sutton, said the insights confirmed that new and amended regulations were felt more acutely by SMEs.


“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,” Mr Sutton said.


“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 and work collaboratively with business on their introduction.”


ScotPac’s bi-annual SME Growth Index Report is Australia’s longest-running analysis of SME business sentiment, with a core focus on six-month growth forecasts. The Round 20 research Report – which marks the 10th anniversary of the SME Growth Index Report – was conducted by East & Partners who interviewed 727 SME enterprises with annual revenues of A$1-20 million.


The natural representative sample SMEs directly interviewed as part of the research located nation-wide have operated continuously for 15 years and manage an average of 56.5 full time employees.


Sectors represented in the analysis included Manufacturing (14 percent), Property & Business Services (14 percent), Retail (11 percent), Wholesale (12 percent), Personal & Other Services (10 percent), Construction (10 percent) and other industries including Transport & Storage, Mining, Agriculture, Media, Hospitality, Finance & Insurance (non-bank) and Electricity.

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