• Advertise
  • About us
  • Terms and Conditions
  • Contact us
Sunday, June 15, 2025
Australian Times News
  • News
    • Weather
    • Sport
    • Technology
    • Business & Finance
      • Currency Zone
    • Lotto Results
      • The Lott
  • Lifestyle
    • Entertainment
    • Horoscopes
    • Health & Wellness
    • Recipes
  • Travel
  • Expat Life
  • Move to Australia
No Result
View All Result
  • News
    • Weather
    • Sport
    • Technology
    • Business & Finance
      • Currency Zone
    • Lotto Results
      • The Lott
  • Lifestyle
    • Entertainment
    • Horoscopes
    • Health & Wellness
    • Recipes
  • Travel
  • Expat Life
  • Move to Australia
No Result
View All Result
Australian Times News
No Result
View All Result
Home News

Government will reform insolvency system to improve distressed small businesses’ survival chances

More businesses are in financial distress, and the one-size-fits-all arrangement doesn’t take account of the varying complexities of businesses.

Michelle Grattan by Michelle Grattan
24-09-2020 01:33
in News
Government will reform insolvency system

Government will reform insolvency system Photo by Mark König on Unsplash

The Morrison government will make sweeping changes to the insolvency system to improve the chances of saving small businesses hit by the pandemic.

The reforms – which are described as the most significant for three decades – will cover three quarters of businesses currently subject to insolvency, almost all of which have less than 20 employees.

The measures include:

  • a new process for restructuring debt for incorporated businesses with liabilities under $1 million
  • moving from a one-size-fits-all “creditor in possession” model to a more flexible “debtor in possession” model – allowing eligible small businesses to restructure debts while remaining in control of their enterprise
  • a rapid 20-business day period for the development of a restructuring plan by a small business restructuring practitioner (SBRP), followed by 15 business days for creditors to vote on the plan
  • a simplified liquidation process for small businesses which will be quicker and cheaper
  • measures to ensure the insolvency sector can respond effectively to increased demand.

The COVID crisis has put new pressures on the insolvency system, and highlighted problems that were there already.

More businesses are in financial distress, and the one-size-fits-all arrangement doesn’t take account of the varying complexities of businesses. The current high costs and lengthy procedures can stop distressed small businesses engaging early when their chances of survival are better.

The government says the present requirements around voluntary administration are more suited to large, complex company insolvencies than to small businesses.

The new process would streamline the role for, and powers of, the small business restructuring practitioner compared with the role played by an administrator in a voluntary administration.

AlsoRead...

Leading with Trust: Why Quality still wins in the AI Era

Leading with Trust: Why Quality still wins in the AI Era

5 June 2025
Why Australian Investors are Betting on the Aviation Maverick Louis Belanger-Martin

Why Australian Investors are Betting on the Aviation Maverick Louis Belanger-Martin

28 May 2025

The government earlier provided some relief to help shield financially distressed businesses – and the numbers of companies going into external administration have been running at lower rates than last year. But the assistance expires at the end of December.

Reserve Bank Governor Philip Lowe recently warned of a wave of business failures, saying: “There will be insolvencies. There will be bankruptcies. There will be some businesses that will not recover. That’s the harsh reality of an economic downturn that’s the worst in 100 years.”

The government has looked to overseas practice, notably reforms in the United States, as well as recommendations from the Productivity Commission in framing its changes.

There will be safeguards to prevent misconduct, and protections for creditors’ interests.

The new system requires legislation. It is due to start January 1.

Treasurer Josh Frydenberg said the reforms “are a critical part of our economic recovery plan and will help to boost business confidence and dynamism across the economy by allowing viable businesses to survive as our economy rebuilds.

“The government’s new reforms draw on key features of the US Chapter 11 bankruptcy process allowing small businesses to restructure their debts while remaining in control of their businesses,” he said.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Tags: SB001
DMCA.com Protection Status

SUBSCRIBE to our NEWSLETTER

[mc4wp_form id=”2384248″]

Don't Miss

Leading with Trust: Why Quality still wins in the AI Era

by Pauline Torongo
5 June 2025
Leading with Trust: Why Quality still wins in the AI Era
Business & Finance

If you're leading a software team today, you've likely noticed the shift: faster feature rollouts, routine automation, and AI taking...

Read more

How to Save on Airport Parking: Budget Tips Every Traveller Should Know

by Fazila Olla-Logday
3 June 2025
How to Save on Airport Parking
Travel

Saving money on airport parking can be a challenge,but here are some budget friendly tips to help you navigate.

Read more

Why Australian Investors are Betting on the Aviation Maverick Louis Belanger-Martin

by Pauline Torongo
28 May 2025
Why Australian Investors are Betting on the Aviation Maverick Louis Belanger-Martin
Business & Finance

Bélanger-Martin’s ambitions stretch beyond redefining inflight comfort—they’re rooted in resurrecting the romance of supersonic travel with a modern twist.

Read more

Why a Gluten Free Hamper is simply the Best Gift for a Coeliac

by Fazila Olla-Logday
22 May 2025
Gluten Free Hamper
at

Buying a thoughtful gift can be tricky at the best of times, but when someone has dietary restrictions like coeliac...

Read more

Biela.dev is quietly becoming the Infrastructure Layer for the Next Internet

by Pauline Torongo
15 May 2025
Biela.dev is quietly becoming the Infrastructure Layer for the Next Internet
Technology

Biela.dev is not merely a consumer app; it is infrastructure. It could be a layer that powers the next generation...

Read more

The Battle for the Premier League’s Fifth Champions League Spot: Who Will Prevail?

by Fazila Olla-Logday
8 May 2025
Premier-Leagues-Fifth-Champions-League-Janosch-Diggelmann-Unsplash
at

As the Premier League season nears its climax, the race for the coveted Champions League places is tighter and more...

Read more

The Predictive Infrastructure: How BOF’s Neuro Finance System Reengineers Market Forecasting

by Pauline Torongo
5 May 2025
The Predictive Infrastructure: How BOF’s Neuro Finance System Reengineers Market Forecasting
Business & Finance

As global markets become more complex and volatile, BOF Investments has developed Neuro Finance, a predictive system that combines machine...

Read more
Load More

Copyright © Blue Sky Publications Ltd. All Rights Reserved.
australiantimes.co.uk is a division of Blue Sky Publications Ltd. Reproduction without permission prohibited. DMCA.com Protection Status

  • About us
  • Write for Us
  • Advertise
  • Contact us
  • T&Cs, Privacy and GDPR
No Result
View All Result
  • News
    • Weather
    • Sport
    • Technology
    • Business & Finance
      • Currency Zone
    • Lotto Results
      • The Lott
  • Lifestyle
    • Entertainment
    • Horoscopes
    • Health & Wellness
    • Recipes
  • Travel
  • Expat Life
  • Move to Australia

Copyright © Blue Sky Publications Ltd. All Rights Reserved.
australiantimes.co.uk is a division of Blue Sky Publications Ltd. Reproduction without permission prohibited. DMCA.com Protection Status