Postponement of Director Personal Liability for Superannuation Guarantee Payments and Extension of the Director Penalty Notice Regime
Author: Simon Della Marta, Partner
19 December 2011
In previous newsletters we have commented upon the proposed changes, click here for the Superannuation guarantee personal liability for Directors newsletter and click here for Directors personally responsible for superannuation guarantee payments - further obligations on the way newsletter.
In late November 2011 the Federal Government removed the proposal postponing it until the new year. The announcement followed a report by the House of Representatives Standing Committee on Economics (Committee) which recommended the government withdraw the proposed legislation to consider ways to better target phoenix activity and expand and strengthen defences of company directors.
The legislation to enact the changes was introduced to the House of Representatives on 13 October 2011 and the bill was referred to the Committee in order to allow a review of the public submissions on the proposed changes.
The Phoenix legislation also contained proposed legislation on the petroleum resource rent tax.
The Committee generally supported the provisions of the phoenix and superannuation guarantee legislation however, at the hearing business groups expressed concerns about the provisions because they wanted to ensure that honest company directors would not be caught in the provisions by accident. The Committee accepted that the directors who act in good faith should have some comfort that they will not be subject to the provisions and the Committee recommended to the government that they investigate whether the bills should specifically target phoenix operations and whether the defences in the bill should be expanded.
The Committee recommended that Schedule of the Tax Laws Amendment (2011 measures 8) Bill 2011 which contained the phoenix provisions should be deleted so that the remainder of the bill should pass.
In response to the Committee’s rejection of the proposed bill the then assistant treasurer, Bill Shorten, in late November announced the government will seek further consultation with stake holders with a view to reintroducing the bill (in its amended form) early in the new year. The government appears intent on targeting phoenix activities but it remains to be seen what the amendments will be when introduced in 2012.
Simon Della Marta
Partner
T: +61 2 9390 8310
E: simon.dellamarta@holmanwebb.com.au