THE Federal Government will undertake the most significant reforms to Australia’s insolvency framework in 30 years as part of the economic recovery plan to keep businesses in business and Australians in jobs.
The reforms, which draw on key features from Chapter 11 of the Bankruptcy Code in the United States, will help small businesses throughout the Central Coast restructure and survive the economic impact of COVID-19.
Federal Member for Robertson, Lucy Wicks said: “As the economy continues to recover, it will be critical that distressed businesses have the necessary flexibility to either restructure or to wind down their operations in an orderly manner.”
“The Morrison Government will continue to stand by the small and family businesses, by doing all we can to ensure these businesses come out on the other said of the pandemic.”
The reforms will assist incorporated businesses with less than $1M in liabilities covering around 76 per cent of Australian businesses subject to insolvencies today, 98 per cent of which have less than 20 employees.
“Together, these measures will reposition our insolvency system to reduce costs for small businesses, reduce the time they spend during the insolvency process, ensure greater economic dynamism, and ultimately help more local businesses get to the other side of the crisis.”
“These reforms give more support for businesses across the Central Coast who have been hit hard by the COVID-19 Pandemic.”
Earlier this year the Morrison Government announced temporary regulatory measures to help financially distressed businesses get to the other side of COVID-19.
On September 7, 2020 the Government announced a further extension of this relief to December 31, 2020.
The new processes will be available for small businesses from January 1m, 021.
