ATO super conflict

At a recent second creditors meeting for Hudson Global Resources an employee asked the tax office to advise whether they were acting only in their interest or on behalf of the priority creditors? The question was not answered.

By maintaining its garnishee, the tax office sought to recover PAYG and GST debts from Hudson which were otherwise unsecured creditor claims. In this case, any funds recovered for these tax debts would reduce the funds available to pay priority claims to employees. The highest priority claim is for wages and superannuation. Via the Superannuation Guarantee Charge the tax office is also responsible for the collection and distribution of employees’ overdue superannuation claims.

How does the tax office manage this obvious conflict of interest? Would it vote for a DOCA that paid superannuation in full with no return to unsecured creditors? As a liquidator, I would prefer the priorities set out in the Corporations Act. As far as I’m aware, the various tax acts say nothing about this issue.

What would you do?