Each day the Morrison Government fails to act on the issue of dodgy directors and developer rip offs, it could be costing tradies, small business and the economy around $14.5 million per day.
It is alarming figures such as this that has meant the Victorian Andrews Government has had to take the lead and take action on the issue.
Phoenixing is a widespread and corrupt practice, hurting employees, legitimate small businesses, and denying the tax office revenue, costing over $5 billion a year.
In the absence of any leadership from the Morrison Government, the Victorian State Government will introduce legislation into State Parliament today that will crack down on dodgy builders.
However, even the State Government concedes changes to federal laws are needed to have an overarching and long term impact.
The problem is, the Morrison Government seems so incompetent it can’t even bring on its Combatting Illegal Phoenixing bill for debate in the parliament.
This may be because, having identified holes in the legislation, Labor has proposed amendments to strengthen the bill and yet the Government has rejected these amendments.
Labor has circulated amendments which will force the Government to vote on the Director Identification Number (DIN) in Parliament, but each sitting week the Government continues to pull the bill from the program with no explanation.
The DIN amendments replicate legislation the Government introduced into the last Parliament which lapsed at the election, but has not been reintroduced despite the lack of an economic agenda.
The DIN enabling legislation doesn’t even appear on the Government’s proposed list of legislation to introduce.
Currently it is easier to become a company director than open a bank account. Experts agree that the single most effective measure to track dodgy developer phoenix operators is the DIN.
Until now it was clear the Government agreed.
Labor has significant concerns the Government has walked away from this reform. We can’t wait for another construction industry collapse or Plutus Payroll scandal to expose the damage done by dodgy insolvencies.
Illegal phoenix activity occurs when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditors and employee entitlements
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has also urged the government to act on the policy:
“Everyone supports the Director ID number, everyone supports the fact that it would dramatically address our capacity to reduce other inappropriate behaviour. We’ve got to make sure this doesn’t become a bit of a dog’s breakfast.”
KATE CARNELL, WEDNESDAY, 17 JULY 2019.
It’s time the Government focused on protecting the vast majority of scrupulous businesses from the harm caused by the crooked few, rather than avoiding any responsibility.
The question remains, will the Government vote for their own legislation?