Labor welcomes the third and final report by the Melbourne Law School and Monash Business School ‘Phoenix Project’.

The Turnbull Government has been suspiciously silent on the harm phoenix activity has on employees, businesses, and their families. The Phoenix Project report is a chance for them to catch up on their responsibilities to small businesses and consumers.

Harmful phoenix activity – deliberate related-party asset transfers and insolvency – is a tactic used by some directors to explicitly avoid paying employees their entitlements, avoid paying taxes, and avoid paying creditors – particularly subcontractors and other small businesses.

In 2015, the Productivity Commission reported 2,000 to 6,000 phoenix companies operating in Australia, costing up to $3.2 billion per year.

In contrast to the inaction of the Turnbull Government, Labor has long been committed to protecting workers‘ wages from harmful phoenix activity. 

The Phoenix Project report makes over 30 recommendations to enable regulators to better detect, disrupt and enforce such activity.

Labor  will carefully consider the proposals outlined in this report, and calls on the Turnbull Government to do the same. 

Malcolm Turnbull needs to drop his plan for a $50 billion tax cut for the big end of town, and focus on the harm that dodgy phoenix companies are doing to families and small business.


Senator Katy Gallagher is Labor's Shadow Minister for Small Business and Financial Services.

This is a joint release with Labor's Shadow Assistant Treasurer Andrew Leigh MP.