Directors to be named and shamed for phoenixing under new Labor policy
Thursday, November 8, 2018/
Company directors found to have engaged in illegal phoenixing activity will be named and shamed if a Labor government is elected in 2019.
Under a new policy announced today, Labor says it will legislate to expand the powers of the Commissioner of Taxation to name individuals and entities engaging in phoenixing.
The announcement is the latest addition to the opposition’s anti-phoenixing platform, which also includes longstanding support for director identification number measures currently being considered by Treasury.
The new measures will also see the commissioner given the power to apply to ASIC to have disqualification orders drawn up for directors found engaging in or overseeing “serious non-compliance”.
“To boost productivity, protect vulnerable workers and secure the tax base, Labor will take tough new measures to crack down on dodgy phoenix directors,” Shadow Assistant Treasurer Andrew Leigh said yesterday.
Illegal phoenixing is a process where a director transfers assets to a new business and then liquidates the old company before starting to trade the new business.
In 2015, the Productivity Commission estimated the practice costs Australia between $1.8 billion and $3.2 billion each year.
Both Labor and the coalition are trying to crack down on phoenixing, with new laws that will increase penalties for those that skip out on employees in the event of insolvency passing the lower house last month.
The Fair Work Ombudsman and the ATO will be given new powers to pursue directors under those laws, while a push for directors to be forced to sign up for unique identification numbers is also gaining steam.
Those changes, currently subject to Treasury consultation, would make it easier for regulators to track directors beyond individual companies.