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Government extends relief for distressed businesses
The government has announced it will extend its regulatory relief for businesses impacted by COVID-19 until the end of the year in relation to insolvency and bankruptcy protections.
In a public release issued by Treasurer Josh Frydenberg, the government has announced that regulations will be made to increase the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
The changes will also extend the temporary relief for directors from any personal liability for trading while insolvent.
Mr Frydenberg said these measures are part of more than 80 temporary regulatory changes made by the government to provide greater flexibility for businesses and individuals to operate during the coronavirus crisis.
“The extension of these measures will lessen the threat of actions that could unnecessarily push businesses into insolvency and external administration at a time when they continue to be impacted by health restrictions,” Mr Frydenberg said.
“These changes will help to prevent a further wave of failures before businesses have had the opportunity to recover.”
In addition, the Treasurer said the government is providing $314 billion in support “to cushion the blow for workers, households and businesses during the coronavirus crisis”.
“As the economy starts to recover, it will be critical that distressed businesses have the necessary flexibility to restructure or to wind down their operations in an orderly manner,” he said.
The government will continue to help businesses successfully adapt and restructure so that they can bounce back on the other side of this crisis.”
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
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