Employers who always meet their superannuation obligations would want to see their competitors who do not meet their legal obligations penalised so they can compete on a level playing field. Under the government's proposals, from the middle of next year, all employers, not just small employers, will face a tiny administrative fee for not paying super. What happens now is that if an employer is late in making a contribution, the employer pays the contribution not at ordinary time earnings, but on total earnings. That can be an effective penalty for employers with workers who do overtime. Under the proposed changes, the late super contribution would equal the standard calculation of superannuation. In other words, employers just have to pay the super that they should have paid.

There is currently an interest charge for the employer of 10 per cent a year on late payments. But under the proposed changes, the way that is calculated changes so that the interest penalty is less. Let's take an employer who does not pay 12 months' worth of super for an employee on average wages who does the typical amount of overtime. Under the present arrangements, the effective penalty for not paying a year's worth of super for this worker is about $200. Under the changes, the penalty would be of the order of tens of dollars. Much of the non-payment and underpayment occurs with younger and lower-income workers.

One estimate is that about 650,000 workers are missing out on up to $2.5 billion a year in superannuation payments. Did I hear someone mention 7-Eleven? The proposed changes are all part of the government's moves to help small businesses and remove red tape – a very worthwhile aim. The government says the current penalties are too high and may stop some business owners from reporting late super payments. But paying superannuation is a legal obligation. And, if a business cannot survive after meeting its legal obligations to those it hires, well, that's business. It sends the wrong signal to employers that their employees' super can be used as a source of cash to tide them over, or to stop the business from going under.

Superannuation is not employers' money that can be used in this way. And there is a real risk that removing penalties for non-payment will only exacerbate the problem of non-payment of super. The Turnbull government has a new minister for small business and hopefully these proposed changes will be reviewed. @jcollett_money