The ABN system was originally introduced in 2000 to provide a unique identifier for businesses to use when dealing with government, and to support the introduction and administration of the Goods and Services Tax (GST). However, the value and meaning of an ABN within the community has expanded over time, with the ABN now considered a key business credential. The consequences of a broadly applicable business credential are becoming more apparent over time.

In 2017, the Black Economy Taskforce consulted on the drivers of the black economy and found that the ABN system is being used by participants in the black economy to provide a false sense of legitimacy to their business. This is a concern given the potential for it to be used to deceive other businesses or consumers. It is therefore timely to consider whether the ABN system remains fit to support the expanded range of purposes that an ABN is used for today.

The ABN data held within the Australian Business Register (ABR) is a vital source of information on ABN holders. It is being used by business, government and the community for purposes outside the tax system such as business identity checks, disaster planning, policy design and targeting services to business. It is therefore imperative that the ABR is a trusted source of information and supports easy identification and verification of businesses.

This consultation paper is based on the premise that the ABN remains an important business identifier and will be retained. However, it recognises that the underpinning ABN system is in need of reform to support the growing importance and expanded uses of the ABN and the consequences that come with this.

With this focus, views are sought on possible changes to the ABN system including adjusting ABN entitlement rules, imposing conditions on ABN holders, and introducing a renewal process including a renewal fee. Stakeholders are also welcome to make comments or provide insights on other aspects of the ABN system that are not raised in this paper.

Following this consultation period, the Government will consider stakeholder views and develop a coordinated package of ABN reforms. Further consultation is planned to occur on the details of these reforms and how they should be implemented.

Consideration of reforms to the ABN system is not occurring in isolation. There are currently a number of related reforms occurring across Government. Reforms to modernise business registers, implement a digital identity framework, introduce director identification numbers, and reduce phoenixing activity will all contribute to improving business identity and verification.

This consultation paper does not seek to duplicate consultations or work underway on these related reforms. However, where answering questions in this consultation paper requires referencing these reforms, we welcome views outlining the relevant interactions.