3 December 2015
Media Release - #2015031, 2015

Legislation to strengthen liquidator regulation

The Turnbull Government has today introduced the Insolvency Law Reform Bill into the Parliament to strengthen and streamline Australia's personal bankruptcy and corporate insolvency regimes, Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP said.

"The Bill is the first tranche of reforms to modernise Australia's insolvency and corporate reorganisation framework. As part of the National Innovation and Science Agenda, the Turnbull Government is committed to ensuring that our regulatory frameworks provide financially distressed businesses with the best opportunity to restructure, or be wound up efficiently where the business cannot be saved," Minister O'Dwyer said.

"The efficient operation of Australia's insolvency regime requires an insolvency profession that stakeholders can have confidence in. The measures in the Bill introduced today will assist in restoring confidence in the insolvency profession by raising the standards of professionalism and competence, as well as allowing for better identification and swift removal of practitioners who fail to meet the necessary requirements.

"This package of reforms will provide benefits to creditors, businesses and insolvency practitioners by cutting unnecessary costs and red tape, while making the changes necessary to increase confidence in the insolvency system.

"Changes include enabling creditor meeting and practitioner reporting requirements to be better tailored to each administration and to creditor needs, instead of relying on default requirements and better facilitating electronic communication between practitioners and creditors.

"Finally, the Bill will assist in raising market competition for insolvency services in order to provide downward pressure on the costs of these services. Importantly creditors will be provided with the ability to remove poorly performing insolvency practitioners through a resolution of creditors instead of having to seek the Court's agreement.

"The Bill allows for the making of Insolvency Practice Rules which will provide further guidance on some of the provisions contained in the Bill. I will be releasing a draft of these rules for consultation shortly.

"This legislation supports the Government's commitment to reducing the cost of unnecessary or inefficient regulation imposed on individuals and businesses. The measures in the Bill are estimated to result in savings to the insolvency industry of $50 million per year," Minister O'Dwyer said.