Vox pop: To fight phoenixing, the government is introducing ID numbers for company directors. Do you agree with this policy?

Nick Verykios, managing director, Arrow ECS Australia

The policy is only a minor ingredient to hopefully a broader legal framework. 

Phoenixing has to be seen as a criminal act, these people effectively steal money. There’s no other way to look at it. 

All the reactive legislation in the world, managing this after the fact, won’t make it go away. 

It has to be prevented, with criminal implications and zero transactional or legal ability to do so. So if it happens it’s a crime.  Starting with, you can’t wind down a company with assets of any kind and not leave a director responsible. To do so is illegal. That’s where we start.

Matt Milne, sales and product manager, Mia Distribution

I am in favour of increased regulation regarding phoenix companies.  

As a distributor, I feel we play an integral part in the channel’s supply chain and for us it’s all about creating long-term mutually beneficial relationships which greatly enhance our resellers’ overall value proposition.  

Of course, we have credit facilities for our partners, but deliberately using a distributor as a bank and then declaring insolvency puts pressure not only on us, but the vendors and the channel as a whole.  On the other side of the scale, we can’t determine all the variables that make a company insolvent, government should also offer support where possible to ensure new businesses have every chance to succeed.  

The new ID numbers will allow government to monitor the undesirables and put resources into ensuring there is less phoenixing in our channel.

Sonia Cuff, co-founder, The Missing Chair

It seems like a very “broad brush” approach to solving a specific problem.  

More concerning is what else they’ll do in the future with this capacity to link individuals and entities. 

I’m also surprised that they haven’t looked at using the unique personal identification number that directors already have: their personal tax file number. 

Considering there’s no single statutory or legal definition of phoenix activity and the government departments are under-resourced (legislatively and financially) to fight it, I think that other measures in the reform package will have a bigger impact on phoenixing than a director identification number. Do we really need even more red tape?