Bendigo MP Lisa Chesters wants to crack down on rogue phoenix business activity.

 

COMPANY directors would need their own traceable director identification number and would have to complete a 100-point check as part of a federal opposition plan to help crack down on dodgy directors and rogue phoenix activities.

Federal member for Bendigo Lisa Chesters this week unveiled a plan to protect employees from bosses who failed to pay entitlements and compulsory superannuation on behalf of their staff before entering into administration.

Ms Chesters said dodgy business practices like phoenixing and wage theft were unacceptable and central Victorian workers have been some of the hardest hit by dodgy employers engaging in rogue phoenixing behaviour.

“It is just wrong that people go to work, they work hard, and in industries where this is common like security, cleaning and hospitality, that they lose their entitlements,” she said.

Ms Chesters said her party’s plan would crack down on dodgy directors who engage in phoenix activity, where directors avoid their obligations to employees, government and honest businesses by placing their business into administration once the company has been stripped of its assets.

“Currently, it is easier to become a company director than open a bank account, yet the government has barely raised a peep about phoenix activity,” she said.

Ms Chesters estimated phoenix activity cost Australia more than $3.2 billion each year. Phoenixing allows owners to avoid paying money owed such as superannuation, leave entitlements and tax to the failed company’s creditors, which are often the company’s employees, other small businesses and the Australian Tax Office.

“Statistics from Industry Super Australia show that nearly 15,000 workers in the Bendigo electorate have been underpaid their superannuation entitlements at an average of $1892 a year,” Ms Chesters said.

“Labor will enforce policy that will see employees and business owners benefit from new enforcement tools for the Australian Securities and Investments Commission, tightened laws protecting employee entitlements, and harsher penalties to deter and punish insidious phoenix activity.”

As part of the federal opposition’s plan, penalties for phoenix activity would increase, an objective test for transactions depriving employees of their entitlements would be introduced, and the Fair Work Ombudsman would receive additional resources.

– Peter Kennedy