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Wednesday, 15 June 2011
Page: 3004

Australian Taxation Office

(Question No. 533)

Senator Abetz asked the Minister representing the Treasurer, upon notice, on 22 March 2011:

(1) How many prosecutions for 'sham' contracting has the Australian Taxation Office undertaken in the past 2 years.

(2) How many of those cases: (a) have been successfully prosecuted; and (b) are still outstanding.

(3) Can details be provided, with some exactitude, in what areas the 'sham' contracting arrangements have been observed, for example, in building, cleaning and security.

Senator Wong: The Treasurer has provided the following answer to the honourable senator's question:

(1) There are no provisions in the law enabling prosecutions for 'sham' contracting. The ATO refers cases for possible prosecution for pay as you go withholding offences to the Commonwealth Director of Public Prosecutions, who decides whether to prosecute a particular case. There have been no prosecutions for 'sham' contracting.

(2) Not applicable (see question 1).

(3) The ATO targets businesses engaging contractors based on criteria that indicate risk of non compliance. The criteria include, but are not limited to, the industry involved. Compliance activity has been conducted across a wide range of industries including building and construction, cleaning, retail, hospitality and accommodation, restaurants and cafes, information technology, security services, call centres and telemarketing, education, health and aged care, agriculture and fishing, meat and chicken packing and processing, transport and logistics, professional services, real estate, and sports and entertainment.

Audits have revealed evidence of sham contracting, and consequent non compliance with taxation and superannuation obligations, in all these industries, with particular concentration identified in the building and construction and cleaning industries.