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Summary of Recommendations
- The ACTU and its affiliated unions have been long-term and vocal advocates for effective measures to deal with the problem of phoenixing. The proposed measures should be supported by additional reforms, in the absence of which, there is a real risk that the effectiveness of the proposed measures will be undermined. Most importantly, the proposed measures must be backed by significant further resources for ASIC, who retains responsibility for preventing and penalising phoenixing activity. The other further measures required are that:a) A Regulatory Impact Statement should be developed to assess which classes of creditors are likely to benefit from the reforms and whether the Commissioner of Taxation and secured creditors are benefited at the expense of employee creditors;b) an additional offence should be introduced for company officers who enter into transactions or agreements in order to avoid Occupational Health & Safety penalties;c) Some of the proposed penalties should be increased and apply to all company officers, not just directors;
d) Further protections are needed to prevent the stacking of creditors meetings, as outlined below;
e) A pre-insolvency licensing regime shoul be implemented;
f) Unions should have standing to seek compensation orders and automatic capacity to represent their members in creditors’ meetings;
g) Penalties should be implemented for appointing straw directors;
h) The Commissioner of Taxation should be able to group related corporate entities for the purposes of tax liability and make them jointly and severely liable; and
i) The proposed reforms should also be complemented by increasing transparency measures such as the introduction of a Director Identification Number and an attendant register that the public can access free of charge
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