Regulation Impact Statement – Department of the Treasury
On 12 November 2020, the Government introduced the Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 for the purposes of:
- establishing a debt restructuring process for eligible small companies to allow more businesses to successfully restructure and providing temporary relief for eligible companies seeking to enter the process;
- establishing a simplified liquidation process for the purpose of winding up the affairs and distributing the property of an eligible company in a creditors' voluntary winding up with the aim of increasing returns to creditors and making the process more accessible to small businesses;
- expanding situations where documents relating to the external administration of a company may be given electronically and making it easier for meetings to be held entirely virtually; and
- increasing the capacity of the Australian insolvency sector.
A Regulation Impact Statement (RIS) was prepared and certified by the Department of the Treasury (the Treasury), and accompanied the Explanatory Statement for the supporting regulations made under the Corporations Amendment (Corporate Insolvency Reforms) Act 2020, the Corporations Amendment (Corporate Insolvency Reforms) Regulations 2020 which were registered on 21 December 2020. The RIS has been assessed by the Office of Best Practice Regulation (OBPR) as adequate with the Australian Government’s RIS requirements, but not consistent with good practice. To achieve good practice, the RIS would have benefitted from an appropriate level of consultation on all of the proposed policy options to enable more robust impact analysis.
The Treasury has estimated an average annual regulatory saving of approximately $165 million per annum, with $129 million annually going to businesses and $36 million annually going to individuals.
Please note: any accessibility enquiries should be directed to the Treasury.