The Federal Government has sought submissions on new laws to protect workers’ superannuation from fraudulent phoenix company activity by making directors personally liable.
The Budget measure was designed to prevent employees missing out on entitlements like superannuation when a company is deliberately liquidated and restarted under a different entity.
Assistant Treasurer Bill Shorten said there would be three amendments to accomplish this.
These include extending the director penalty regime to make directors personally liable, and allowing the Australian Taxation Office to pursue directors where taxes and superannuation have not been paid after three months.
The Commissioner will also be given discretion to prevent directors from obtaining PAYG withholding credits where the company has an outstanding PAYG liability.
“The Government is committed to ensuring employees receive their entitlements and to taking strong action to deter phoenix activity,” Shorten said.
“However, we recognise the importance of ensuring these changes do not discourage entrepreneurialism and commercial risk-taking or impact unnecessarily on genuine businesses.”
Submissions close 1 August 2011, with the measure expected to be introduced in the spring sittings of Parliament.
