Date posted: 25/09/2020 2 min read

CA ANZ welcomes insolvency reform as small business lifeline

Following the Treasurer’s announcement today, Chartered Accountants Australia and New Zealand (CA ANZ) has welcomed the proposed insolvency reforms.

Small businesses around the country are sighing with relief today, said CA ANZ Business Reform Leader Karen McWilliams.

"CA ANZ have been calling for a Government response to the nation's impending insolvency cliff and today the Government has thrown a lifeline to small businesses," said McWilliams.

"There are currently 637 registered liquidators that operate in Australia, more than 80 per cent of which are Chartered Accountants Australia and New Zealand members."

"And for some time, the data has been crystal clear, insolvencies are at an all-time low - indicating business that would have naturally failed under normal economic conditions, have not and we are in for an ambush of insolvencies at the end of the year."

"These measures recognise this ambush and put in place a shield of defence."

"In our briefing with Treasury today, we were able to discuss the necessary parameters and safeguards that should be in place, particularly the high professional standards required for the proposed Small Business Restructuring Practitioners."

"Further, as these measures will be permanent rather than temporary during the pandemic, we consider it critical for there to be an in-built review process for late next year to ensure that the laws are still fit-for-purpose and relevant."

"This is a complex piece of reform, which has the potential to curtail many future pain points for business but also requires very careful analysis and detailed feedback, which we look forward to continuing to provide to Treasury."

CA ANZ says this is necessary assistance during these difficult times, in order to give viable businesses the best chance of survival.

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