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Q. What is the cost of phoenix activity?
Phoenix activity has a range of impacts on the Australian economy. Employees lose entitlements when phoenix activity has occurred and will often not be paid superannuation; businesses won't have goods and services they have paid for provided or will have debts left outstanding; and government revenue is impacted by phoenix companies not paying tax debts.
A key challenge for this project was quantifying these impacts of phoenix activity. Particular focus was given to quantifying the impact on the industrial relations system and on employees. There is currently a significant lack of data collection on phoenix activity. On the basis of the available data and a series of assumptions that were tested with stakeholders, the total impact of phoenix activity has been estimated to be $1.78 - $3.19 billion per annum.
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