Federal reforms to ensure no more unpaid contracts
DISHONEST directors and companies are on notice with the recent announcement of two major reforms to fix major credit issues affecting small and family businesses.
The national campaign was launched on Tuesday, aimed at ensuring subcontractors in the building and construction industries get paid on time while also providing a special hotline to catch unscrupulous people involved in so-called 'phoenixing' activity.
"Illegal phoenix activity is when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying debts, including taxes and employee entitlements," Minister for Small and Family Business, the Workplace and Deregulation Craig Laundy said.
"The new Phoenix Hotline will make it easier to report suspected phoenix behaviour directly to the Australian Tax Office (ATO) so they can pursue those who are doing the wrong thing.
"Last financial year the ATO sent out tax bills totalling more than $270 million from more than 340 reviews and audits of businesses involved in phoenix activity," he said.
"This hurts hard-working Australians, including the company's employees, suppliers, customers and competing businesses. It causes a significant drain on the Australian economy."
Mr Laundy said the Australian Building and Construction Commission (ABCC) was launching a campaign to initially target firms tendering for Commonwealth projects with around 300 contractors to be contacted and reminded about their obligations to pay on time.
However, Mr Laundy said the campaign also aims to educate subcontractors on their rights, how they can report payment disputes and delays, and how the ABCC may be able to help.
"Whilst you may have a well-known prime contractor, you have many layers of subcontractor down the food chain, and the idea should be that all levels of contractor, no matter where they fit in the supply chain, should be protected," he said.
Employees, creditors, competing businesses and the general public can call the Phoenix Hotline on 1800 807 875 or get in touch online at ato.gov.au/reportphoenixactivity.
New reforms avoid Ostwald repeat
FEDERAL Member for Page Kevin Hogan said these reforms would help prevent a repeat of the 11-month battle between 23 Pacific Highway road building contractors and Ostwald Bros after it went into liquidation last year.
Mr Hogan said he was "exceptionally happy" to hear the Wave 5 contractors had received their payout, however this result was a one-off outcome.
"I think that Chris (Gulaptis) locally and John (Barilaro) have done a great job coming up with that solution, however, that is fixing a symptom of something that is an underlying cause that we need to resolve," he said.
Minister Craig Laundy echoed these sentiments.
"I'm obviously very happy about this outcome, but it's an ad-hoc case based solution and we need to do something more about this on a national basis, which is what these reforms aim to do," he said.