Submission: Review of Safe Harbour
To support the review of the insolvent trading safe harbour provisions, Treasury released a consultation paper to seek feedback from stakeholders.
ARITA made a comprehensive submission following a survey of members to obtain their views on a range of issues relating to the safe harbour provisions.
Some of the key points included in the submission from the data gathered as a result of the survey include:
- We believe that the safe harbour provisions are being used with some success.
- Insolvent trading laws have little impact on director behaviour, particularly at the SME level. However, for those that do engage a safe harbour adviser, it provides confidence to continue to trade in an attempt to achieve a better outcome.
- The availability of safe harbour makes a difference to directors of larger companies.
- The safe harbour regime is not being abused by directors.
- The pre-conditions to accessing safe harbour are what prevents it being used for illegal phoenix activity and stops inappropriate and unviable candidates for restructuring continuing to trade.
- There is a lack of certainty around key terms such as 'appropriately qualified entity'.
- There is a lack of awareness of safe harbour.
- The biggest issues facing businesses that are looking to restructure are a lack of money and resources, or leaving it too late.
Read ARITA's submission
Read the consultation paper