Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Hansard source

Mr Deputy Speaker, I therefore seek leave to table the names of the Fadden school leaders.

Leave granted.

Thank you, Mr Deputy Speaker, for the honour you accorded me. It is important that we return to the substance of the bill. Phoenixing activity has been widely debated in the House. It is typically associated with directors who transfer the assets of an indebted company into a new company of which they are also directors. The directors then seek to place the initial company into administration or liquidation with no assets to pay entitlements to employees or, indeed, creditors, contractors or, heaven forbid, even the ATO. Meanwhile, those same directors seek to carry on their business using a new company structure.

It is important for all to know that the coalition is strongly opposed to any fraudulent behaviour that phoenix activity involves and supports all appropriate, sensible and considered measures to stamp out this practice. We recognise that phoenix activity causes substantial harm to workers and small businesses who are denied legitimate entitlements. If left unchecked, there is no question that it can erode the reputation of Australia's strong business community and reduce confidence in our world-class corporate regulatory framework. However, we are deeply concerned that the government's approach to this important public policy matter has been ad hoc, piecemeal, confusing and has not been targeted.

The bill before the House is meant to enhance the ability of ASIC to combat phoenix activity. It gives a range of new discretionary powers to place a company into liquidation, including powers in circumstances such as when a company is six months late in responding to a compliance notice; it has not lodged other documentation required by ASIC; ASIC has no reason to believe a company is carrying on a business and no objection to liquidation is received from directors; a review fee has not been paid within 12 months; or when a company has been reregistered in the preceding six months and ASIC has reason to believe it is in the public interest to place the company into liquidation. The bill also alters the publication requirements of corporate insolvency notices to allow for publication on a single ASIC website.

However, despite repeated attempts from the government introducing legislation to target phoenix activity, I do not believe the government has yet got it right. Last year, the government included a series of different measures targeting some aspects of this behaviour in the Tax Laws Amendment (2011 Measures No.8) Bill 2011 and the Pay As You Go Withholding Non-compliance Tax Bill 2011. After examining these bills, the House of Representatives Standing Committee on Economics made a unanimous and bipartisan recommendation that the government not proceed with those provisions. The committee specifically commented as follows:

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