Master Builders backs proposed crackdown on fraudulent phoenix companies

Master Builders Australia welcomes Productivity Commission proposed recommendations to crack down on the use of phoenix companies where firms which have failed are resurrected in a new corporate form to avoid debts and employee entitlements.

“Master Builders supports measures proposed by the Productivity Commission in the draft report of its Inquiry into Business Set-up, Transfer and Closure which would act against fraudulent ‘phoenixing’ of companies,” Richard Calver, Acting CEO of Master Builders Australia said.

“The Heydon Royal Commission has exposed evidence of the CFMEU’s relationship with underworld identity and serial ‘phoenixer’ George Alex. Regrettably, this is not new in the building and construction industry. The Cole Royal Commission also laid bare instances of fraudulent phoenix activity to evade payment of employee entitlements and tax,” he said.

“Master Builders supports reforms such as the introduction of an identity number for company directors required for company registration which, underpinned by a 100 point identification process, would enable more effective detection of fraudulent directors.” Richard Calver said.

“There is no place for fraudulent behavior in the building and construction industry. Such reforms would greatly assist the enforcement of current laws and protect workers and sub-contractors from rogue operators,” he said.

“Greater enforcement of current laws should be the priority of regulators as has been the case since the Cole Royal Commission,” Richard Calver, Acting CEO said.