On 4 March 2021, CA ANZ provided feedback to the Treasury increasing the statutory demand threshold, currently $2.000.

Our members did not consider there was any compelling statistical or commercial basis for a substantial increase in the threshold. Members did acknowledge that the value of money has increased and accordingly proposed that the threshold be increased to $5,000.

A threshold of $5,000 recognises the importance of enabling debtors to demand a company meets its debts or take appropriate action such as winding up, whilst at the same time providing an adequate barrier to misuse for coercing payment of a disputed debt.

We highlighted potential negative impacts were the threshold raised higher including

• anti-competitive behaviour by a business building multiple debts just under the threshold; and
• withdrawal of trade credit for transactions less than the threshold.

We would like to thank the members of CA ANZ Insolvency Management Committee for contributing to our submission.