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Yesterday, the government announced a raft of proposed reforms to the Corporations Act to stop corporate avoidance of employee entitlements at the taxpayers’ expense.
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New Corps Act reform an industry, taxpayer win
06 October 2017
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8 minute read
The Minister for Employment, Senator Michaelia Cash, and the Minister for Revenue and Financial Services, Kelly O’Dwyer, announced the introduction of new laws yesterday to stop corporate misuse of the Australian government’s Fair Entitlements Guarantee (FEG) scheme.
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The proposed changes will provide a significant disincentive for employers to exploit the taxpayer-funded scheme and avoid their responsibilities to their employees.
The changes will penalise company directors and other persons who engage in transactions which are directed at preventing, avoiding or reducing, employer liability for employee entitlements.
They will also ensure the recovery of FEG from other entities in a corporate group where it would be just and equitable and where those other entities have utilised the human resources of the insolvent entity on other than arm’s length terms and strengthen the ability under the law to sanction directors and company officers with a track record of insolvencies where FEG is repeatedly relied upon.
National lead for BDO’s business restructuring division, Andrew Fielding welcomed the news.
“The proposed changes announced [yesterday], will reduce the exploitation of the scheme,” Mr Fielding told Accountants Daily.
“The proposals are also good news for employees who miss out on non-government funded lost benefits and businesses who play by the rules.”
This legislation will also support the government’s crackdown on illegal phoenixing.
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