The Australian, August 3, 2017
Federal Revenue and Financial Services Minister Kelly O’Dwyer says the fraudulent use of the Bunnings Australian Business Number by thousands of tradesmen is a “very serious issue”, and has vowed to take decisive steps to “protect the revenue of the Australian people”.
Her comments have come as some of the tax profession’s most senior figures expressed shock at revelations in The Australian yesterday that Michael Andrew, the chairman of the Treasury’s Black Economy Taskforce, says the Bunnings ABN is the nation’s most quoted — and most abused.
Mr Andrew said as an example that more than 40 per cent of ABNs quoted in the Northern Territory alone were the Bunnings ABN, letting tradesmen and other service providers disappear into the black economy and potentially costing the economy billions.
Meanwhile, one senior building industry leader suggested the problem was not restricted to Bunnings, with several ABNs of other prominent building suppliers such as Reece anecdotally being frequently abused.
Ms O’Dwyer told The Australian the government had commissioned the Black Economy Taskforce to clamp down on situations such as the Bunnings ABN fraud. “We know there is a big problem here, and we know it is costing the economy a huge amount,” she said.
“We recognise this and other issues raised by the taskforce. The way ABNs have been used is obviously a very serious issue.” PwC’s Australian head of tax, Peter Calleja, said he had never before heard Mr Andrew’s alarming statistics on the Bunnings ABN.
“My reaction is that it adds to the urgency of reform needed,” he said, adding that it was critical that the ATO made a “technology fix … to discourage the payments to invalid or fraudulent ABNs”.
Mr Calleja said government revenue leakage into the black economy stood at $25 billion a year.
CPA Australia’s policy boss Paul Drum submitted to the government yesterday that businesses were exploiting weaknesses in the ABN system by quoting incorrect ABNs such as that of Bunnings, while Mr Andrew believes Australia requires urgent action “to make sure we can verify ABNs on a real-time basis”.
Following yesterday’s article in The Australian, Ms O’Dwyer also released a set of 54 “policy ideas” from the Black Economy Taskforce, ahead of its final report to government in October. Several of these ideas focus heavily on ABN reform. She said she wanted to fully consider the final report before taking formal action on possible reforms, such as real-time ABN recognition: “It will require a properly calibrated response.”
But a well-known building industry leader, who did not wish to be named, told The Australian yesterday: “Who checks the (ABN) registrations? The answer is no one. Reece, Bunnings, right through to (building supplies company) Hudsons.
“I would hazard a guess and say that contractors in the Pilbara would use Fortescue’s ABN.
“It’s just another example of this absolute naivety among authorities that we are this well-administered country.”
Institute of Chartered Accountants tax boss Michael Croker said the Australian Taxation Office was undergoing “a massive reinvention project” to combat fraud. “Hopefully, in future, there will be a real-time look-up facility where it would instantly say ‘invalid ABN’.”
Bunnings and the ATO declined to comment yesterday. There is no suggestion that Bunnings or any other company mentioned has done anything wrong.