Senate Committee Inquiry reports on Safe Harbour and Ipso Facto
The Senate Economics Legislation Committee yesterday reported on the provisions of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 which provides for the safe harbour for directors from insolvent trading provisions and the stay on the enforcement of ipso facto clauses in certain insolvency procedures.
The Report concludes with the recommendation ‘that the bill be passed’.
ARITA’s submissions on aspects of the bill - pertaining to both the safe harbour and ipso facto reforms - are specifically noted in the report.
Chapter 2 of the Report provides a summary of the views expressed in submissions received by the Committee, including:
- ARITA’s views on the qualification of an ‘appropriately qualified entity’ for the purposes of the safe harbour provisions; and
- ARITA’s support for the introduction of a Director Identification Number (DIN).
Chapter 2 of the Report concludes with the statements that:
‘2.76 The committee acknowledges submitters' views with regard to the operation of the bill and how it may be improved to best achieve its intended policy objectives. However, the committee also notes the broad support received for the bill and considers that a number of the matters raised in submissions would best be clarified in regulations accompanying the legislation.
2.77 The committee acknowledges recent commentary regarding the Productivity Commission's recommendation to introduce a Director Identification Number for company directors as a measure to reduce illegal phoenix activity. In this regard, the committee notes that the government is giving this proposal further consideration as part of its ongoing work on insolvency reforms, and also points to the work of the Phoenix Taskforce.’
The Senate Economics Legislation Committee’s Report can be accessed and read here.