As a part of a range of initiatives responding to the impacts of COVID-19 on our economy, the Government has announced changes to Australia’s insolvency framework to better serve Australian small businesses, their creditors and their employees.

The changes will introduce new processes reducing complexity, time and costs and will enable more Australian small businesses to quickly restructure. Where restructure is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.

The need to give businesses and their creditors certainty is crucial to kick-starting confidence and activity as the economy begins to recover in the new year from the impacts of COVID-19. Key features to note:

  • This is the Government’s response to expected wave of failing businesses as temporary relief to protect financially distressed businesses expires at the end of 2020
  • These reforms are an alternative to the existing ‘one-size-fits-all’ Voluntary Administration regime
  • Directors of small companies in financial distress can remain in control of their business and restructure their debts through this process.

The measures will commence on 1 January 2021, subject to the passing of legislation. For more detail: https://treasury.gov.au/consultation/c2020-128022

We would be pleased to assist you with any support, assistance or advice with assessing how your business is positioned for the second half of this financial year. If you need help, please contact:

Paul Congdon – Mobile 0420 757 727 or paul@rbgadvisory.com.au
James Nahlous –  Mobile 0438 213 690 or james@rbgadvisory.com.au
Scott Davis – Mobile 0418 482 619 or scott@rbgadvisory.com.au

Kind regards

Carl Ireland
CEO | RBG