Submission: Insolvency reforms to support small business subordinate legislation
ARITA has made a submission in relation to the subordinate legislation for the small business insolvency reforms released for consultation on 17 November 2020.
We have long been proponents for a small business restructuring process, having first put forward this idea in our 2014 discussion paper, 'A Platform for Recovery'.
However, now we have had the opportunity to substantively review all of the proposed restructuring reform package, we hold significant concerns that it will not be fit for purpose and fails to meet its stated intent of reducing complexity, time and costs for small businesses.
ARITA also holds concerns about the qualification, experience, knowledge and ability requirements of applicants for registration to practice only as a restructuring practitioner. Additionally, having seen the proposed amendments, we hold concerns about the changes to the ‘relevant employment’ test for ‘full’ registered liquidators and those who only practice as receivers or receivers and managers.
Noting the limited time for submissions (8 days), we continue to believe that there is a profound risk of errors and problems that will not be picked up due to the rushed nature of the reforms and again call for the addition of a two-year sunset to the legislation, which will mandate a proper review after a suitable time.
A detailed table of issues identified through our review of the draft Corporations Amendments (Corporate Insolvency Reforms) Regulations 2020 and Insolvency Practice Rules (Corporations) Amendments (Corporate Insolvency Reforms) Rules 2020, as well as the Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 currently before the House of Representatives is included in our submission.
Read ARITA's submission