[Australia] Tougher tax laws targeting wage theft coming to NSW

Business owners who cheat tax laws will soon face significantly higher penalties in New South Wales as Premier Gladys Berejiklian and her government move to raise fines to more than $100,000 as part of a crackdown on wage theft, The Sydney Morning Herald reports.

Anyone altering financial records or lying to inspectors about a state tax will receive the tougher penalties but the legislation was specifically drafted to target wage theft, which is closely linked to payroll tax. Dishonest business owners can evade payroll tax by underpaying staff or not declaring payments. In NSW, payroll tax is levied on wage bills above $1.2 million.

NSW Finance Minister Damien Tudehope announced the changes - set to be introduced to State Parliament in May - pointedly saying the federal government needed to show leadership to address wage theft at a national level.

Under the new legislation package maximum penalties issued to offenders who lie to tax inspectors or make false records to conceal tax evasion will leap from $10,000 to $110,000 per breach. The penalties are not limited to payroll tax offences.

Additionally, the proposed law will allow Revenue NSW to publicly name the worst cases and reportedly, for the first time, disclose information to the federal government’s wage watchdog in suspected underpayment cases.

“The NSW government is committed to playing its part in tackling wage theft as the underpayment of wages is not only unfair but completely unacceptable,” Mr Tudehope said.

“Those who engage in wage theft deprive workers of their due wages and also minimise their payroll tax liabilities while gaining a competitive advantage over those who do the right thing.”

In the last financial year, 140 full-time equivalent Revenue NSW staff pursued 4215 payroll tax investigations. 79 per cent found more tax should have been paid; the shortfall was worth $168.9 million.

Business NSW chief executive Nola Watson said business owners underpaying staff or falsifying accounts gave a bad name to the overwhelming majority doing the right thing.

“Business NSW supports the NSW government increasing penalties for those who engage in systematic deception such as this and hope it will act as a major deterrent towards this duplicitous behaviour,” Ms Watson said.

State-based wage theft laws already exist in Queensland and Victoria.

Business owners who cheat tax laws will soon face significantly higher penalties in New South Wales as Premier Gladys Berejiklian and her government move to raise fines to more than $100,000 as part of a crackdown on wage theft, The Sydney Morning Herald reports.

Anyone altering financial records or lying to inspectors about a state tax will receive the tougher penalties but the legislation was specifically drafted to target wage theft, which is closely linked to payroll tax. Dishonest business owners can evade payroll tax by underpaying staff or not declaring payments. In NSW, payroll tax is levied on wage bills above $1.2 million.

NSW Finance Minister Damien Tudehope announced the changes - set to be introduced to State Parliament in May - pointedly saying the federal government needed to show leadership to address wage theft at a national level.

Under the new legislation package maximum penalties issued to offenders who lie to tax inspectors or make false records to conceal tax evasion will leap from $10,000 to $110,000 per breach. The penalties are not limited to payroll tax offences.

Additionally, the proposed law will allow Revenue NSW to publicly name the worst cases and reportedly, for the first time, disclose information to the federal government’s wage watchdog in suspected underpayment cases.

“The NSW government is committed to playing its part in tackling wage theft as the underpayment of wages is not only unfair but completely unacceptable,” Mr Tudehope said.

“Those who engage in wage theft deprive workers of their due wages and also minimise their payroll tax liabilities while gaining a competitive advantage over those who do the right thing.”

In the last financial year, 140 full-time equivalent Revenue NSW staff pursued 4215 payroll tax investigations. 79 per cent found more tax should have been paid; the shortfall was worth $168.9 million.

Business NSW chief executive Nola Watson said business owners underpaying staff or falsifying accounts gave a bad name to the overwhelming majority doing the right thing.

“Business NSW supports the NSW government increasing penalties for those who engage in systematic deception such as this and hope it will act as a major deterrent towards this duplicitous behaviour,” Ms Watson said.

State-based wage theft laws already exist in Queensland and Victoria.