{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Housing industry insights Economics Data & forecasts Tailored research and analysis Advocacy & policy Advocacy Policy priorities Position statements Submissions News and inspiration Industry news Member alerts Media releases HOUSING Online
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder & manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies & tool insurance Planning & safety solutions Building & planning services How can safety solutions help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan Advertise jobs Trusted support & guidance Contracts & compliance support Professional services Industrial relations Member savings Toyota vehicles The Good Guys Commercial Fuel savings See all
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials & products Concrete, bricks & walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes See all
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Frequently asked questions Study with us Find a course to suit you Qualification courses Learning on demand A job in the industry Get your builder's licence Continuing Professional Development (CPD) Find jobs
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Mates rates Get involved Become an award judge Join a committee Partner with us Our initiatives HIA Building Women GreenSmart Kitchen, bathroom and design hub Get to know us Our members Our people Our partners Support for you Charitable Foundation Mental health program
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Awards program People & Business Awards GreenSmart Australian Housing Awards Awards winners Regional Award winners Australian Housing Award winners 2024 Australian Home of the Year Enter online Industry events Events in the next month Economic outlook National Conference Events calendar
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping & delivery Purchasing T&Cs See all Products Purchase NCC 2022 Building codes & standards Economic reports Hard copy contracts Guides & manuals
About Contact Newsroom
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Change location
{{propApi.text}} {{region}} Change location
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Corporate phoenixing

This policy sets out HIA's position relating to illegal corporate phoenixing and calls on government to define the practice and to have appropriate controls in place that do not unduly disadvantage businesses operating in good faith.

HIA’s Position statement

Illegal phoenixing activity creates an uneven playing field and represents an inefficiency in the construction industry which leads to a misallocation of resources, additional costs and lower productivity.

  1. The Australian Government should make it an offence to deliberately and systematically liquidate a corporate trading entity with the fraudulent or illegal intention to:
    • avoid tax and other liabilities, such as employee entitlements; and
    • continue the operation and profit taking of the business through another trading entity.
  2. The offence should be extended to advisors and those facilitating phoenixing activity with fraudulent or illegal intent.
  3. Incorporation is a legitimate business arrangement and must be preserved:
    • It is a fundamental principle of company law in Australia (and elsewhere) that a company is a separate legal entity, independent of its directors and shareholders.
    • Adopting a corporate structure should continue to be regarded as an appropriate risk management strategy to respond to project and business risk.
  4. The offence of illegal phoenixing should not extend to a company, director and/or an officeholder if the behaviour was directed at legitimate business rescue.
  5. Existing regulatory powers to manage corporations should be enforced including measures that would improve directorships transparency and visibility over an individual’s history of involvement with corporate entities.
  6. Educating the industry and community on activities associated with illegal phoenixing activity should be a priority.
  7. Regulators should target those that engage in certain phoenixing behaviours to assist education, compliance and enforcement activities.


  • Illegal corporate phoenixing is a persistent public policy problem that has widespread negative impacts on the economy.
  • Phoenixing will be illegal when there is deliberate and systematic liquidation of a company with the fraudulent or illegal intention to avoid tax and other liabilities. The business then continues to operate and take profit through another entity, disclaiming any responsibility for the debt of the previous company.
  • While the majority of business failures and insolvencies in the residential building industry are not caused by deliberate intent or design, according to ASIC data, the ‘construction’ industry is largely represented in the overall number of insolvencies across the economy, with almost a quarter of all business failures coming from the sector.
  • In light of this and increasing pressure on the Commonwealth to take action on illegal phoenixing and the potential impact future policies or legislation may have on residential building companies, HIA developed a position statement in relation to Corporate Phoenixing.
  • The challenge for governments looking to regulate in this space is that it is impossible to distinguish between legitimate business rescue and intentional activities to avoid legal liabilities. It is important to balance the potential risks of legislation inappropriately applying to those engaged in appropriate business practices. Not all company failures will involve illegal phoenix activity and genuine company failures do occur.
  • A difficulty in responding to government measures and proposals is that there is no legal or statutory definition of ‘phoenix activity’. The problem with developing a definition resides partly in the fact that phoenixing, of itself, is not inherently unlawful unless it is undertaken with malevolent intent in which case a range of broader generic criminal law sanctions may be applicable.
  • Harmful phoenixing activity, left unchecked, has the capacity to undermine Australia’s revenue base and the competitive ‘level playing field’. It is foreseeable that legitimate business operators, paying taxes, wages and other debts, might be driven out of business by those engaging in illegal phoenix activity.
  • While it is difficult to quantify its impact, according to the Fair Work Ombudsman and PwC, the cost of illegal phoenix activity is estimated to be in the range of $2.85 to $5.13 billion, with the estimated direct cost on business being between $1,162 – $3,171 million per year.
  • Illegal phoenix activity represents an inefficiency in the construction industry which leads to misallocation of resources, additional costs and lower productivity.
  • HIA does not support individuals who engage in illegal corporate phoenixing.


Policy endorsed by HIA National Policy Congress: 23 May 2019

Share with your network:
More articles on:
{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find the latest expert advice, guides and much more!
HIA Advocacy
View all $vuetify.icons.faArrowRight
22 May
BCITF 2024 Statutory Review

Housing Industry Association (HIA) submission to the 2024 Statutory Review of the Building and Construction Industry Training Fund and Levy Collection Act 1990. Attracting, training, and retaining skilled workers is fundamental to the ability of the residential building industry to deliver the homes Australia needs.

20 May
Statutory review of Civil Law (Sale of Residential Property) Act 2003 (ACT)

HIA took the opportunity to respond to the review of laws protecting off‐the‐plan home buyers from unfair contract cancellations.

16 May
Submission to the Strategic Review of the Australian Apprenticeships Incentive System

Many leaders within today’s housing industry began their careers in apprenticeships. Earning a trade qualification not only provides a valuable skillset, but it also opens up a wide range of career opportunities. HIA seeks to ensure workers beginning a career in the industry today have access to the wide range of opportunities on offer in our industry.

08 May
Continuing Professional Development for Building and Plumbing Practitioners

HIA takes this opportunity to respond to the Continuing Professional Development for Building and Plumbing Practitioners: Regulatory Impact Statement (the CPD RIS) and proposed Building Amendment (Continuing Professional Development) Regulations (the draft Regulations).

07 May
Draft Ministerial Building Standard MBS 007 Modifications to BCA (SA)

HIA provided the following comments regarding the Draft Ministerial Building Standard MBS 007 Modifications to the Building Code of Australia.

01 May
HIA Climate Resilience Parliamentary Inquiry

The Victorian Planning Provisions are just one part of growing regulatory system addressing climate resilience for land use planning and building.