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Wednesday, 17 September 2003
Page: 20428

Mr Murphy asked the Treasurer, upon notice, on 14 May 2003:

(1) Is he able to identify judgments in which the superior Courts of the Commonwealth, States and Territories, have referred to the intentional deprivation of the Commissioner of Taxation of taxes to which the Commissioner was lawfully entitled; if so, what are those reported and unreported judgments.

(2) Is he able to say how often the Judiciary has indicated to the Legislative and Executive arms of government and, in particular, the Treasury, in judgments and elsewhere, of the gravity of the intentional deprivation of the Commonwealth of revenues lawfully owed to it; if so, what are those indications and when were they made.

(3) Is he aware of the article titled `Now companies bulldoze their money around, and give the taxman the bird' by Elisabeth Sexton in the Sydney Morning Herald dated 28 March 2003, where it was noted that Mr William John Walters (`Bill the Brickie'), who owned a bricklaying business, faced the NSW Supreme Court for having “presided over 10 company collapses between 1989 and 1998”.

(4) What action is being proposed to toughen legislation to prevent multiple, deliberate and systematic repeat offenders seeking to use the existing licit legal instruments and relying on the leniency of the Criminal Justice system to delay for the maximum term the payment of tax liabilities; if no action is being taken, why not.

(5) What action is being taken to prevent the perpetuators of repeat company failures from presiding over new companies or holding business licences of all kinds or otherwise prevent them holding directorships or other responsible positions for life; if no action is being taken, why not.

(6) Is he able to say whether ten different company collapses presided over by one person over a ten year period constitutes good business management.

Mr Costello (Treasurer) —The answer to the honourable member's question is as follows:

(1) to (2) These cases are available on the public record.

(3) to (6) The 2003-04 Commonwealth Budget provides funding for a Corporate Insolvency Initiative, allowing ASIC to increase its level of surveillance, enforcement, and winding-up actions, to prevent corporate abuse. ASIC will receive an additional $12.3 million over the next four years for the initiative. The initiative will involve targeted surveillance of misconduct by officers of small/medium enterprises and high-risk industry sectors identified by ASIC, the Australian Taxation Office, insolvency practitioners and the Cole Royal Commission.

The Royal Commission noted the significant efforts by Federal Government agencies to investigate and prevent fraudulent phoenix company activity. The Government has accepted, in principle, the Cole Royal Commission's key recommendations. As part of its consideration of the report, the Government will consider the recommendations of the Royal Commission that seek to strengthen government actions to detect and eliminate fraudulent phoenix company activity.

Further announcements on Government decisions in response to the Royal Commission report will be made in the coming months.