Conclusions and Policy recommendations

There is growing problem of sham contracting and misuse of the ABN system. The ACTU recommends following reforms to stop worker exploitation and loss of government revenue to the
ABN system;

1. Initiate an audit of all ABN holders and terminate the numbers of ineligible holders.

2. Introduce tighter controls to ensure only eligible individuals are issued an ABN.

3. Introduce a fee for individuals applying for an ABN.

4. Restrict ABN eligibility for individuals on temporary work visas where there are demonstrated risks of exploitation through sham contracting, such as student visas and working holiday visas.

5. Restrict the use or impose more stringent criteria for the issue of ABNs in certain industries where there is a high incidence of sham contracting, such as construction, cleaning and security.

6. Require ABN holders to have to renew their ABNs periodically and demonstrate that they are conducting a genuine business operation.

7. Ensure that the ‘principal’ who engages so-called contractors is ultimately responsible for the remittance of PAYG tax deductions for workers engaged in a sham contracting arrangements and pursue recovery actions against those entities, including in appropriate circumstances, director penalty notices.