Malcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | Hansard source

enator ROBERTS () (): As a servant to the people of Queensland and Australia, I speak to this bill, the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 and to my concerns for everyday Australians who could be affected by illegal corporate phoenixing in many ways. I speak about my sister's business—a wonderful small- to medium-sized business—with her partner, and her employees. They had to fold eventually because of debtors not paying their bills, rich debtors who folded their companies and restarted, just like the phoenix in ancient Greek folklore, the bird that rose from the ashes.

I stand, like Senator Hanson, for everyday Australians, including honest workers and honest business people. There are many people who are concerned about what this bill might do to them. That's important, because small business is Australia's largest employer. But, later on, I will touch on how one very large company in this country is affecting its employees, because regulations are not the only answer. It requires enforcement. I will be speaking in support of the Labor Party's amendment for a five-year review.

A key problem we have to face is the difficulty associated with identifying whether particular phoenix activity is illegal or not. Our concern must be to not penalise those who have the best of intentions for a business, its employees, subcontractors and suppliers. I think you will find many company directors in rural and regional areas who operate small- to medium-sized businesses are hardworking. They will do whatever they can to keep their business going, pouring their heart and soul into the business in good times and in bad. What is more is that the victims of illegal phoenixing activities do not form an easily identifiable group. So there is a challenge for this government in coming up with this legislation.

The victims of illegal phoenixing include unsecured trade creditors, small businesses, individual employees, members of the public, and large government entities such as the Australian Taxation Office. We have also seen this sort of tricky, shonky phoenixing in the building industry, as many previous speakers have said, where it is used to avoid payments to subcontractors and to avoid taxes. It is important to remember that phoenix activity can be entirely legal if a company has to restructure, especially if the value of the failed company's assets is preserved and the employees keep their jobs and entitlements—and that is significant.

I note that the ATO website has stated that fraudulent phoenix activity is one of its areas of focus and that the ATO says that fraudulent phoenix activity occurs when a company goes into liquidation, leaving its debts behind, while the assets are shifted into a new entity that begins trading again, often under a similar name. This deliberate practice of liquidating related businesses and corporate trading entities is a fraudulent exercise to evade tax and other debts accumulated in the name of the failed company. But this is not new, and we have seen its impact for a long time. In fact there are professional advisers out there who specialise in teaching directors and businesses how to do it, and this corruption must stop. So we applaud the government for its initiative.

The ATO deputy commissioner, Mark Konza, in 2009 described phoenix behaviour as 'a deliberate attempt to avoid financial obligations'. He further noted that phoenix activity is a type of tax evasion that 'has the potential to severely erode the revenue base and undermine business and community confidence'. So it's significant in our economy.

Schedules 3 and 4 of the bill were quite concerning to One Nation and to many Australians. Accordingly, we have to ensure we have checks and balances to protect the well-intentioned person—for example, the well-intentioned director or businessperson who salvages a business previously failed due to factors outside their control, such as a Queensland tourist operator whose first company is forced into liquidation or voluntary administration after an airline strike beyond their control or after health concerns about travel. Another example is where a viable business is prematurely liquidated by an overly cautious party who fears insolvent trading liability during a period of poor liquidity, even though the business is fundamentally sound. This should not require everyday Australians to defend themselves in court at great cost because the ATO took a dislike to them. There must be a better, simpler way. That is why Labor's amendment for the five-year review is crucial.

We also need to ensure that proper education is provided to help directors to understand their obligations. There are many small-business people out there who have set themselves up as companies and need to understand what they can and cannot do before they try to salvage their business. We don't want to scare small businesses and we don't want to scare small-business directors, because small business, as I said in my opening comments, is our largest employer in this country. In dealing with this issue, it is also very important to promote debate on the need for improvements to the role of administrators. This is something One Nation has championed for years now.

When I chaired the Senate select inquiry into lending to primary production customers, we confirmed the inherent conflict of interest in the role of receivers and administrators who prey on innocent people and organisations to strip assets. We then pleaded with the Turnbull government to include administrators and insolvency practitioners in the financial services royal commission's terms of reference. Yet Mr Morrison, as Treasurer, and Mr Turnbull, as Prime Minister, refused. This bill still leaves the door open for administrators to strip a company's funds, leaving nothing for creditors like subcontractors. Putting an organisation into administration must take account of the impact on, and the protection of, the interests of all stakeholders and minimise the costs that administrators can charge. This is really important, and the government needs to step up here.

It makes it hard to support this bill while successive Liberal-Labor governments continue to enable administrators to strip assets and to line their pockets. That is another reason for the review, and we support Senator McAllister's amendment. The government must provide real and effective legislation and regulations to end the administrator's inherent conflict of interest and to set real boundaries to ensure protection for honest directors' rights and creditors' benefits.

It is also worthy to note that complex illegal phoenix activity is sometimes likely to attract other forms of illegality, such as the use of false invoices, including GST fraud, the use of false identities, fictitious transactions, money laundering and/or visa breaches and misuse of migrant labour. Illegal forms of phoenix activity have been linked to certain industries in particular—those being the building and construction industry and the financial services industry. This has been the subject of many prior reports and academic papers. This sort of activity, phoenixing, requires an integrated approach from all regulatory arms. I trust consideration will be put into this approach in terms of data sharing and strategy.

I want to deviate for a minute now, because the government has been found wanting in the Hunter. While I'm pleased to see the government crack down on phoenixing, I will continue to watch a situation in the Hunter that is unfolding every day under the noses of Liberal state and federal governments and ministers, and under the noses of Labor members of parliament who have been informed and know what is going on. It involves specifically the labour hire firm Chandler MacLeod, and BHP, the giant globalist. I have a question. Will Chandler MacLeod's multinational owner, Recruit Holdings in Japan, consider phoenixing Chandler MacLeod to avoid the liability they have created through unfair employment practices? If they do phoenix, this could affect government services. For example, the ATO itself employs Chandler MacLeod casuals.

In this chamber, in Senate estimates and publicly, I have repeatedly raised BHP's exploitation and abuse of hundreds of supposedly casual workers in the Hunter Valley who are actually working full-time coalmine production rosters at its Mount Arthur mine. It did so using the foreign owned Chandler MacLeod labour hire firm that did a deal with Peter Jordan and other Hunter Valley CFMMEU bosses. This set-up sees management breaking the law, with workers being threatened, to prevent the reporting of serious injuries; workers enduring needlessly hazardous conditions without proper workers compensation or accident pay; workers underpaid by as much as around 40 per cent; and workers stripped of basic leave entitlements, long service leave and possibly superannuation.

These are breaches of federal and state laws that continue five years after they were first identified. Yet local and state and federal MPs—Labor MPs—have abandoned the workers who pleaded with them. Indeed, Labor's Joel Fitzgibbon is publicly selling the deceptive message that the issue is about casualisation, when that is the tip of the iceberg. His public statements deflect and hide the real problem: the huge scam that exploits workers that his mates in the Hunter Valley area CFMMEU, such as Peter Jordan, have endorsed and overseen.

The federal Fair Work Commission has contradicted federal legislation. New South Wales Liberal government ministers have ignored miners' documented evidence and failed to fulfil their responsibilities. I must thank Senator Marise Payne for listening to the concerns regarding the abuse of casual mine workers in the Hunter Valley when I raised it in Senate estimates. I appreciate the federal Attorney-General's Department checking and endorsing the miners' documents, showing that they are correct. I also want to compliment Senator Jim Molan, who I approached on this last night and who is promising to pursue it. Why, though, is the government not pressuring the New South Wales government to fulfil its responsibilities? Apart from One Nation and Senator Marise Payne and Senator Jim Molan, no-one is working to meet these three aims: firstly, paying miners their legal and moral entitlements, as well as compensation for the trauma and suffering that they continue to endure; secondly, ending the exploiting of casual workers across the industry; and, thirdly, bringing BHP, foreign owned Chandler MacLeod and the CFMMEU's Hunter Valley union bosses, including Peter Jordan, to justice. It is thanks to the trusted One Nation team, including Stuart Bonds, that BHP's abusive practices are being exposed—and last night Mark Latham, in the New South Wales Legislative Council, committed to chasing this and holding the New South Wales government accountable.

Chandler MacLeod today—what will be their name tomorrow? How will this phoenixing legislation work with multinationals? When large companies, and they don't get much larger than BHP, can ignore and break laws with impunity, we need the five-year review in the amendment that Senator McAllister is moving. We will continue to hold BHP, Chandler MacLeod and the Hunter division of the CFMMEU accountable until all three of our aims are achieved.

As I stand here today, I seek the government's assurances that they have both the commitment and the resources to ensure that illegal phoenixing is stamped out and that non-illegal phoenixing activity to save companies will not be penalised. I also believe that, if this government were serious about this, it would turn to improving the role of, and the checks and balances for, administrators and receivers, saving us all a lot of money and a lot of pain. On balance, with some reservations, we support this bill.