Australian Tax Office Commissioner Chris Jordan this morning has confirmed the need for action on dodgy phoenix operators, who deliberately burn companies in an attempt to avoid their obligations to employees, taxpayers and honest businesses.
The Tax Commissioner told a Senate Estimates Committee:
“This is not a new issue. Phoenixing is a big problem, especially when you have these people that are unassociated with the principals. You can’t keep track.”
When speaking on how easy it is to become a company director in Australia, Mr Jordan told one Senator
“I could appoint you as a company director without you even knowing and me then controlling the company”
The Tax Commissioner also noted that in other countries, proper identification checks are required for anyone wanting to become a director.
Illegal phoenix activity costs our economy billions of dollars annually. That’s why Labor last week announced measures to crack down on dodgy directors:
- Requiring all company directors to obtain a unique Director Identification Number with a 100-point identification check.
- Increasing penalties associated with phoenix activity
- Introducing an objective test for transactions depriving employees of their entitlements
- Clarifying the availability of compensation orders against accessories
- Consulting on targeted integrity measures based on the recommendations of the Melbourne Law School / Monash Business School Phoenix Research Team recommendations.
Among the bodies that support Labor’s call for a Director Identification Number are:
- The Productivity Commission
- The Australian Institute of Company Directors
- The Australian Small Business and Family Enterprise Ombudsman
- The Australian Chamber of Commerce and Industry
- Master Builders Australia
- The Australian Council of Trade Unions
- The Australian Restructuring Insolvency and Turnaround Association
- The Phoenix Project (comprising experts from Melbourne University Law School and Monash University Business School)
As one expert said today:
“you can, almost literally, register your dog as a company director”
Why is the Turnbull Government letting dodgy directors off the leash?
TUESDAY, 30 MAY 2017