Explanatory Memorandum
(Circulated by authority of the Minister for Housing and Assistant Treasurer, the Hon. Michael Sukkar MP)General outline and financial impact
Phoenixing offences and property transfers to defeat creditors
Schedule 1 to the Bill introduces new phoenixing offences to prohibit creditor-defeating dispositions of company property, penalise those who engage in or facilitate such dispositions, and allow liquidators and ASIC to recover such property.
Date of effect: The day after Royal Assent.
Proposal announced: This Schedule partially implements the measure Reforms to combat illegal phoenixing from the 2018-19 Budget.
Financial impact: Nil
Human rights implications: This Schedule engages human rights issues. See Statement of Compatibility with Human Rights - Chapter 6, paragraphs 6.1 to 6.24.
Compliance cost impact: Minor
Improving the accountability of resigning directors
Schedule 2 to the Bill ensures directors are held accountable for misconduct by preventing directors from improperly backdating resignations or ceasing to be a director when this would leave the company with no directors. This will reduce the incidence of illegal phoenix activity and its effect on employees, creditors and government revenue.
Date of effect: The day 12 months after Royal Assent.
Proposal announced: This Schedule partially implements the measure Reforms to combat illegal phoenixing from the 2018-19 Budget.
Financial impact: Nil
Human rights implications: This Schedule engages human rights issues. See Statement of Compatibility with Human Rights - Chapter 6, paragraphs 6.25 to 6.34.
Compliance cost impact: Minor
GST estimates and director penalties
Schedule 3 to the Bill allows the Commissioner to collect estimates of anticipated GST liabilities and make company directors personally liable for their company's GST liabilities in certain circumstances.
Date of effect: The first day of the quarter following Royal Assent.
Proposal announced: This Schedule partially implements the measure Reforms to combat illegal phoenixing from the 2018-19 Budget.
Financial impact: As at the 2018-19 Budget, the measure is estimated to result in the following cost to budget over the forward estimates period:
| 2018-19 | 2019-20 | 2020-21 | 2021-22 |
| - | -$5.0m | -$15.0m | -$20.0m |
Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 6, paragraphs 6.35 to 6.39.
Compliance cost impact: Minor
Retention of tax refunds
Schedule 4 to the Bill authorises the Commissioner to retain tax refunds where a taxpayer has failed to lodge a return or provide other information to the Commissioner that may affect the amount the Commissioner refunds. This ensures taxpayers satisfy their tax obligations and pay outstanding amounts of tax before being entitled to a tax refund.
Date of effect: The first day of the quarter following Royal Assent.
Proposal announced: This Schedule partially implements the measure Reforms to combat illegal phoenixing from the 2018-19 Budget.
Financial impact: As at the 2018-19 Budget, the measure is estimated result in a small but unquantifiable gain to revenue to revenue over the forward estimates period.
Human rights implications: This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 6, paragraphs 6.40 to 6.43.
Compliance cost impact: Minor