An Australian union is advocating for the Albanese government to eliminate the superannuation tax for workers from the Pacific and Timor-Leste who participate in the Pacific Australia Labor Mobility (PALM) scheme. This scheme currently employs over 30,000 individuals in sectors such as farming, meat processing, and care across Australia. The Australian Workers' Union (AWU) highlights that a significant portion of these workers' earnings is taxed at 35% upon superannuation withdrawal, impacting their entitlements. AWU national secretary Paul Farrow criticized the tax, emphasizing its negative implications for Australia's relations with Pacific nations and describing the administrative hurdles that further complicate access to these entitlements.
Superannuation, designed to support retirement in Australia, faces a 35–45% tax when withdrawn by foreign workers after their visa expires. The AWU points out the challenges faced by PALM workers in accessing their superannuation due to the absence of comparable schemes in their home countries, complex paperwork, and the requirement for an Australian bank account. The union is calling for an urgent reconsideration of this tax policy to better align with the objectives of the PALM scheme and Australia's foreign relations. A spokesperson for Financial Services Minister Stephen Jones reiterated that the tax is intended to recover concessions given that these workers will not retire in Australia, but confirmed ongoing assessments of the PALM scheme's effectiveness.
Manu Jones, a worker from Vanuatu employed on a South Australian farm under the PALM scheme, shared his frustrations with the current superannuation arrangements, highlighting the emotional and financial toll on workers. The issue gains further prominence as Commonwealth Heads of Government meet in Samoa, a country with a significant number of citizens working in Australia under the PALM scheme. The Australian Tax Office reports over $1 billion in unclaimed superannuation from former temporary residents, including PALM workers, underscoring the scale of the issue.
Source: ABC News