For the last 4 years I have published a series of Christmas wish lists to guide the Federal Government in reforming the insolvency profession. As we move into another Christmas season, now is the best time to look again at how the laws and process that govern our profession can be improved, to create better outcomes for our stakeholders. Last year, the then Federal Government trumpeted the insolvency reforms1 released that year as being the “most significant reforms to Australia’s insolvency framework in 30 years.”2 On reflection, I think it is safe to say that these3 so-called ‘reforms’ may be better described as “the biggest and worst reforms in 30 years.”
Fortunately, the now Federal Government have released a Parliamentary Joint Committee (PJC) inquiry into our corporate insolvency laws, and we have taken the opportunity to submit a submission with our thoughts. A link to our formal submission can be found here.
A core principal to our submission is that any reform must seek to ambitiously place Australia in the same league as (or better than) other leading countries’ cross-border, insolvency and restructuring laws.4 We must be forward looking (not 5-10 years into the future, but 30+ years)5 and seek to arm insolvency practitioners with the best tools to deal with anything the future may send our way.
Our current legislation is still stuck in the 20th century, yet we can do so much better. For example, Liquidators in Australia still have to send 50+ page reports to creditors on even simple liquidations (just to be paid). As another example, to obtain any information, a liquidator can report a person to ASIC for not providing books and records, but in reality it will take up to 6 months before ASIC will successfully prosecute the claim. Why is this not just automatic?
This PJC inquiry is our best chance to push for a complete review of all personal and corporate insolvency laws. At SVP, we are proud to be a leading participant in this process; as we leverage our national, specialist experience in assisting SME’s and their owners in navigating the complexities when times get financially tough.
The following is snapshot wish list of the key reforms SVP is seeking from the PJC inquiry below.
On behalf of the directors of SVP, I extend our warmest greetings to you, Merry Christmas and Happy New Year!
1 Small Business Restructuring Reforms (2021) and Simplified Liquidation Reforms (2021)
2 24 September 2020, Joint Media Release, Insolvency reforms to support small businesses recovery
3 The reforms described in footnote 1 and the Insolvency Law Reform Act 2017 (Cth)
4 For example, the bankruptcy laws of the USA or the restructuring hub idea of Singapore
5 Particularly, if we are only going to get these reviews every 30 or so years