This article was written by Jack Anderson
After last year's significant reforms to Australia's insolvency framework, the Government has demonstrated a further commitment to simplifying and streamlining insolvency law to allow viable businesses that encounter economic challenges to restructure and continue trading.
This commitment is demonstrated by the Government continuing to examine ways to improve Australia's insolvency laws, including consulting on options to:
- clarify the treatment of trusts with corporate trustees under Australia's insolvency law; and
- improve schemes of arrangement processes to better support businesses, including by introducing a moratorium on creditor enforcement while schemes are being negotiated.
The Government will also:
- increase the minimum threshold at which creditors can issue a statutory demand on a company from $2,000 to $4,000, which will assist distressed but viable companies from being pushed into liquidation over small debts;
- commence an independent review of the insolvent trading safe harbour rules to determine if they remain fit for purpose; and
- as noted in section 8 above, extend the power of the Administrative Appeals Tribunal to pause or modify ATO debt recovery action in relation to disputed debts that are being reviewed by the Small Business Taxation Division of the AAT.
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