• SA labour-hire companies now in ATO sights

    27 February 2013

    Media release 2013/06

    Search warrants have been executed on premises associated with 80 South Australian based labour-hire companies operating in the agricultural industry suspected of phoenix company behaviour.

    The Australian Taxation Office (ATO) and Australian Federal Police worked together to execute the warrants for suspected criminal activity within the berry picking and meat processing sectors.

    ATO Acting Second Commissioner James O'Halloran said phoenix companies deliberately liquidate to avoid paying debts, then re-open under the same ownership as another company or entity.

    "It has previously been estimated that about 6,000 phoenix companies operate in Australia, costing government and the community hundreds of millions of dollars per year and impacting on individuals*," Mr O'Halloran said.

    "Phoenix companies deprive employees of their entitlements, and disadvantage honest businesses by under cutting them on prices.

    "The ATO works with government agencies including law enforcement and uses robust data-matching processes across government to detect phoenix operators.

    "The majority of business operators and directors do the right thing. However, the ATO will pursue those who do the wrong thing to try and gain an unfair advantage."

    Further information on phoenix activities can be found here.

     

    *Phoenix activity sizing the problem and matching solutions, Fair Work Ombudsman, June 2012

    Last modified: 27 Feb 2013QC 26947