The Australian government is making changes to our insolvency framework to better serve Australian small businesses, their creditors, and their employees. The changes will introduce new processes suitable for small businesses from 1 January 2021, reducing complexity, time and costs for small businesses. The changes will enable more Australian small businesses to quickly restructure and to survive the economic impact of COVID-19. Where restructure is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.
These reforms are the most significant changes to the Australian insolvency framework in almost 30 years. They form part of the government’s JobMaker plan to ensure Australia emerges from the pandemic with a stronger, more resilient and more competitive economy. The need to give businesses and their creditors certainty is crucial to kick-starting confidence and activity as the economy transitions to the recovery phase.