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Landmark case for ATO strips phoenix enabling liquidator of his registration

THE Federal Court has disqualified Sydney man David Iannuzzi from practising as a registered liquidator for a period of 10 years.

This is the first time the ATO has initiated Federal Court proceedings using Corporations Act provisions to take on the facilitators of schemes designed to avoid paying tax.

The Federal Court found that Mr Iannuzzi, as the sole director of Veritas Advisory Pty Limited, had been systemically negligent in his responsibilities as a liquidator over an extended period of time and across more than 23 companies.

The Federal Court found that Mr Iannuzzi’s "systemic conduct was certainly reckless; it fell very far short of the conduct that was to be expected of him; it demonstrates that he failed to observe the obligations of candour on him with regard to disclosing relevant circumstances to creditors; it reflects poorly on his character; and it demonstrates that he is not a fit and proper person to remain registered as a liquidator".

ATO Assistant Commissioner Aislinn Walwyn said the outcome demonstrated that the ATO will take firm action to hold facilitators of illegal phoenix activity to account and take steps to remove them from the business environment where they have acted negligently.

“Our taxation and superannuation systems rely on the integrity of industry professionals, including insolvency practitioners,” Ms Walwyn said.

Illegal phoenix activity is when a company is deliberately liquidated, wound up or abandoned to defeat creditors, leaving its debts behind. Its assets are shifted to the controllers or to a new entity that begins trading, often under a similar name.

“Illegal phoenix activity affects the whole community. It rips off creditors and employees and reduces the amount of revenue that could be collected to fund essential community services,” Ms Walwyn said.

A report by PricewaterhouseCoopers in 2018 estimated the economic impact of potential illegal phoenix activity to be up to $5.13 billion per year. This includes small businesses and individual contractors or suppliers who are left unpaid, employees who haven’t been paid their entitlements, and all Australian taxpayers who ultimately bear the burden of unrecovered tax debts left behind by phoenix activity

The ATO leads the 37-member Phoenix Taskforce, which aims to protect public finances, as well as honest businesses and employees, by deterring and reducing illegal phoenix activity.

lllegal phoenix activity can be reported at www.ato.gov.au/tipoff or phone 1800 060 062.

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Report launch -- offshore wind can address climate change and provide transition for fossil fuel workers

A NEW REPORT, to be released today, will urge the Victorian and Commonwealth Governments to back the emerging offshore wind sector in a move that could drastically reduce carbon emissions while providing quality jobs for workers transitioning out of fossil fuel industries.

In a joint report launched by the Victorian Trades Hall Council, unions from the maritime, energy and manufacturing sectors will outline a series of steps to not only encourage the use of offshore wind to reduce carbon emission, but take advantage of the emerging industry to diversify the job opportunities for workers and communities which are currently reliant on coal, oil and gas.

Putting the ‘Justice’ in ‘Just Transition’: Tackling inequality in the new renewable economy focuses on the Star of the South project, Australia’s first proposed offshore wind farm which would use 250 turbines between 10-25km off the Gippsland coast to generate up to 20 percent of Victoria’s electricity.

The report, produced by the Maritime Union of Australia, Victorian Trades Hall Council, Gippsland Trades and Labour Council, Electrical Trades Union, and Australian Manufacturing Workers' Union, outlines the steps required to not only support the development of this emerging sector, but to ensure it delivers positive outcomes to communities reliant on fossil fuel industries.

Workers from fossil fuel industries who would like to transition into a new offshore wind sector will also be available for media interviews.

Launch: Putting the Justice in ‘Just Transition’

When: 10:30am, Friday 8 November 2019

Where: VTHC, 54 Victoria St, Carlton

 

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E-invoicing policy to fast-track payment times to small businesses

THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has welcomed the Federal Government’s move to pay e-invoices within five days or pay interest on late payments.

The five day e-invoicing payment policy applies to contracts valued up to $1 million, where both the lead contractor and federal government agency both use e-invoicing.

“This is a game-changer for e-invoicing small businesses that are directly engaged in a contract with a federal government agency,” Ms Carnell said.

“The next step would be to apply this to businesses right down the supply chain. Our Small Business Counts report shows that late payments continue to hamper small business viability, with half of all small businesses reporting late payments on 40% of their invoices," she said.

“This policy will improve cash flow for small businesses so they have the confidence and the capital to re-invest. We encourage small and family businesses to adopt e-invoicing and make the most of the benefits that flow from that, including reduced administration costs and fewer processing and handling errors.

“We know that around 1.2 billion invoices are exchanged in Australia every year. Research shows it costs about $30 to process a paper invoice and about $9 per e-invoice, a significant saving," Ms Carnell said.

“Around 20 percent of traditional invoices are sent to the wrong person and about 30 percent contain incorrect information – delaying payment. In fact, research shows the Australian economy would benefit to the tune of $28 billion over a decade, if all businesses switched to e-invoicing.

“This Federal Government e-invoicing payment initiative sets a benchmark for all states, teritories and big business to follow.”

www.asbfeo.gov.au

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Experts to discuss fixed four-year terms

WOULD the House of Representatives work more effectively with fixed four-year terms? What would that mean for the Senate? If the length of terms was fixed, in what circumstances should an early election be allowed?

The House Social Policy and Legal Affairs Committee will discuss these issues with a panel of constitutional experts on Thursday, November 7.

The panel will comprise professors Gabrielle Appleby, Cheryl Saunders, Anne Twomey, and George Williams, and Mr Malcolm Mackerras. 

Chair of the committee, Andrew Wallace MP said that since Federation the average length of Parliaments has been about two and a half years.

"I’m looking forward to involving the public in a discussion about whether longer parliamentary terms would improve the Australian political system," Mr Wallace said.

The discussion will be open to the public and streamed live on the Parliament’s website.

The House of Representatives’ Twitter account, @AbouttheHouse, will be following the discussion, and the Committee will consider questions posted on Twitter. The Committee encourages those making contributions to do so respectfully.

Further information is available on the Committee’s website.

Roundtable details 

Date: Thursday 7 November, 2019
Time: 9am to 12.15pm
Location: Committee Room 2R1, Parliament House, Canberra

The roundtable will be broadcast live at aph.gov.au/live.

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Ombudsman seeks contact with financial planning small businesses

THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell wants to hear from small and family enterprises being exited from financial planning businesses.

“Following recent media reports regarding AMP Financial Planning’s restructure of its business, my office has received dozens of requests for assistance from small business financial planners across a number of licensors, many of whom say they are facing financial ruin,” Ms Carnell said.

“Small business owners are reporting that they are bearing the brunt of brutal restructures by their licensors. They are saying that licensors’ handling of matters has not been transparent or equitable."

The Ombudsman wants to hear from financial planning licensees who feel that their treatment is unfair.

“We’re concerned about a number of behaviours that may include the conduct of lookback audits, financial planning licensors shifting responsibility for client compensation payments to licencees, short notice periods provided to licencees exiting the business and restraint of trade provisions," Ms Carnell said.

Any small or family business that has been impacted by changes in the financial planning sector is encouraged to share their story via This email address is being protected from spambots. You need JavaScript enabled to view it.

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