Storm penalty applied to your business??

Friday 11 June 2010

By Michael Burnett
Accru Steele Burnett & Nelson, Hobart

The Melbourne Storm have been stripped of two premiership titles, fined and banned from earning any league points this season after shocking revelations of salary cap rorts.

Has such a draconian penalty changed anything other than the Storms formally recognised achievements?

Other NRL clubs and other leagues will no doubt be much more careful with their salary arrangements going forward…..for a few years at least.  

I also sense there is a new level of thinking in regard to penalties in general, especially with governments trying to increase revenue, decrease deficits and shape behaviours (refer recent tobacco tax and super mining tax increases).  

What if that level of thinking were applied to your business? Consider these scenarios:

• What if the ATO deprived you of 2 years profits and the current year’s takings for the current year if you understated your income?
• What if ASIC stopped you being a company director for not lodging company paperwork on time?
• What if your bank withdrew your $100,000 overdraft facility completely because you exceed the overdraft limit?
• What if your staff all had to be paid 50% more because you had underpaid some employees according to the award?

The NRL penalties are a reminder to business managers to consider whether what you do and accept in the workplace is likely to have negative side-effects, and if so, can you afford the consequences.

Do not expect that if you do get caught that the penalties will be insignificant – I believe the NRL chiefs have shown that, like almost a generation ago in the early 80’s, we have a cultural change of what is acceptable in corporate (and sporting) Australia.  Watch your space!