Murray Watt (Queensland, Australian Labor Party) Share this | Hansard source

I rise to speak in support of the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018. In particular, this bill makes a number of changes to the superannuation system which Labor support. The one aspect of the bill that I wanted to make a few short comments on concerns the changes to try to rein in a degree of phoenixing. We have heard from other speakers in this debate already about the problem that phoenixing is causing in Australia. In short, phoenixing basically involves company directors operating, running up big debts, not paying those debts and then collapsing their companies without having paid the debts.

But before they collapse the company, they transfer the assets across to a new company and go on living happily ever after while leaving a trail of destruction behind in the form of creditors that they haven't paid. The reason I'm speaking on this is that this is a particularly big problem that we're experiencing on the Gold Coast, where I have my office. It's an issue that I've been taking up both with the regulatory authorities and in the local media.

This bill addresses one aspect of phoenixing that directly concerns the government. Good on the government for making some changes which protect its own revenue from the actions of phoenix companies. Specifically, the proposed changes included in this bill will require purchasers of new homes or land to remit the GST component of their purchase price directly to the tax office rather than pay that GST to, for instance, a developer who would then remit that GST as part of their next business activity statement. The problem that the government has been experiencing—and the ATO in particular—is that too many developers have been taking that GST payment from buyers and then collapsing their company without having remitted the money to the tax office. They then close down their company, go into liquidation and owe the tax office debts which never get paid. I think it's a good thing that the government is cracking down on this and am very happy to support it.

I want to see the government take similar steps to protect a range of other people who are suffering from the actions of phoenix companies. As I said, this has been a particularly big problem on the Gold Coast. Even over the last 12 months, there've been a series of construction companies that have gone into liquidation, owing subcontractors, homebuyers, suppliers and a range of other people significant amounts of money that these people never get to see because the companies go into liquidation. They transfer all their assets to other companies so they can't be used to repay their debts. They go on, live a great life and, in many cases, the subbies and homebuyers go broke. I've met people involved in the Gold Coast construction industry whose marriages have fallen apart as a result of debts that they've been owed by phoenix companies. They are rightly cranky that not enough is being done to protect their interests. What I say to the government is, 'Great—good on you for protecting your own revenue from people who are doing the wrong thing, but how about we take some action to protect other people who are also losing out from subbies?'

Senator Cameron went through in some detail some of the proposals that Labor has had on the table for a long while now. In particular, we want to see company directors have director ID numbers to make it easier for regulatory authorities to track directors of phoenix companies. At the moment, it's harder to get a dog licence or a drivers licence than it is to become a company director in Australia. That isn't right when you think about the amount of money that companies are playing with. In many cases, it's other peoples' money. We think that the introduction of a director ID number would go a long way to helping ASIC and other regulatory authorities keep tabs on the people who are doing the wrong thing. We also want to see tougher penalties introduced for phoenixing. We think at the moment the penalties are too low and don't send a message to the people who are doing the wrong thing. We also want to see ASIC start taking some greater action.

A couple of weeks ago, I again met with a number of subcontractors on the Gold Coast and their representative group, the Subcontractors Alliance. They have completely lost faith in ASIC taking action against the rogues in the industry, whether we're going back a few years to Walton Construction—one of the big construction companies with a large presence in Queensland that went broke, owing tens of millions of dollars to subbies and suppliers—or more recently with other groups like Future Urban Residential on the Gold Coast and former Senator Bob Day's company, which went broke and owed lots of people money as well. These subbies feel like they have repeatedly taken their concerns up with ASIC but are not seeing any action taken. It's for that reason that, only this week, I've referred their concerns to the Federal Police because, quite rightly, these subbies say to me: 'This is just fraud. Let's forget about breaching corporations laws. This is straight-out fraud by company directors. It should be treated as such and it should be investigated by the police.' So I've referred these matters to the Federal Police in the hope that some greater action can be taken to protect the interests of subbies.

In conclusion, we support the bill. We support, in particular, the move to tighten the net around phoenix companies when it comes to the government receiving its tax revenue. I look forward to also supporting government legislation in the near future that will take some action to protect the other people who suffer from phoenix companies, such as subbies.