News & Insights

The first major review of Australia’s corporate insolvency in more than 30 years is underway with public submissions now closed. The review is broad in its scale, considering the entirety of Australia’s corporate insolvency regime and its related practices and procedures.

While the review is relevant to anyone conducting business in Australia, any developments or changes to corporate insolvency laws are particularly important for businesses in financial distress or creditors looking to recoup debts they are owed.

The corporate insolvency review to date

Tasked with reviewing the effectiveness of corporate insolvency laws in protecting and maximising value for stakeholders and the Australian economy, the Parliamentary Joint Committee on Corporate and Financial Services (Committee), chaired by Senator Deborah O’Neill, received a total of 56 public submissions representing a broad spectrum of interests and views. The review is expected to reignite the debate on a number of controversial areas of the corporate insolvency framework.

These include submissions by:

• prominent insolvency industry bodies, including ARITA, AIIP and TMAA that are broadly calling for generational and holistic change to insolvency laws in Australia to better align with international best practice;
• Government bodies, including the ATO, ASIC, AFSA, the Attorney-General’s Department and the Department of Treasury, which generally support efficient and effective insolvency laws without proffering substantive reforms; and
• various business representatives and groups, including credit, legal and accounting bodies with diverse views on how insolvency laws can better meet the needs of Australia’s growing and modernising economy.

A select few of these submitting parties were granted a forum for further public submissions during hearings on 13 and 14 December 2022.

What’s next

Responses to questions addressed to submitting parties and stakeholders by the Committee members on notice are due to be delivered by 20 January 2023 and any further questions are to be submitted by the middle of February 2023.

Our insolvency team will be closely monitoring the progress of these reforms and will be regularly updating our clients with further insights on likely future reforms to corporation and insolvency laws.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.