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Monday, 29 May 2000
Page: 16514

Mr Hollis asked the Treasurer, upon notice, on 13 April 2000:

(1) Has his attention been drawn to the placement in liquidation in August 1999 of Parrish Meats Supplies Pty Ltd at Yallah, NSW.

(2) Does the Australian Taxation Office (ATO) hold $43 000 from Parrish Meats Supplies Pty Ltd; if so, (a) for what is the sum held and (b) when was it received.

(3) Do employees have a preference of payment ahead of the ATO under the Corporations Act; if so, when was the change in preference included in the Act.

(4) Is it the practice of the ATO to require an official liquidator to satisfy the Commissioner that employees are entitled to receive the payments held by the ATO in insolvency cases and that Court Orders are further required to secure payments.

(5) Will he direct the ATO to return the $43 000 payment to the official liquidator of Parrish Meats Supplies Pty Ltd; if not, why not.

Mr Costello (Treasurer) —The Assistant Treasurer has provided the following answer to the honourable member's question:

(1) Prior to the honourable member's question, no, I was not aware that Parrish Meats Supplies Pty Ltd had been placed in liquidation.

(2) Unfortunately, the Commissioner of Taxation (the Commissioner) is unable to provide me with any specific details of the case due to the secrecy provisions of the tax law.

(3) Yes, employees have a preference of payment ahead of the ATO under the Corporations Law. The preferential unsecured creditor status of the ATO was removed in 1993.

(4) Yes. As a matter of administrative practice the Commissioner will not pay any money to a liquidator unless and until ordered to do so by the Court. The Commissioner explained that this was necessary in order to secure the rights of the ATO to seek payments in full in the event of legal action being taken against directors or other third parties.

(5) As you are aware, Parliament has placed the administration of Australia's taxation laws with the Commissioner and neither the Treasurer nor any other Minister may intervene in the proper exercise of his statutory powers.

However, because the Government is very concerned about workers that lose their entitlements in situations of employer insolvency, it recently announced the implementation of the Employee Entitlement Support Scheme (EESS) which will provide employees with safety net protection for their entitlements. This can be viewed on the internet under