The government has ticked off all 14 recommendations in the final review of the insolvent trading scheme, vowing to work towards a “plain English best practice guide” that sets out general eligibility criteria for appropriately qualified advisers.
The Review of the Insolvent Trading Safe Harbour was tabled in Parliament on Thursday, with the government agreeing that a best practice guide should be development in consultation with key industry bodies and handed down by the Australian Securities and Investments Commission (ASIC).
“The government recognises the benefits that a best practice guide to safe harbour would have for directors and advisers,” the final report reads.
In a statement issued on Thursday, Assistant Treasurer Michael Sukkar said the insolvent trading safe-harbour provisions are designed to promote a culture of entrepreneurship and innovation by providing breathing space for distressed businesses.
The government introduced the insolvent trading safe harbour in 2017 as part of its National Innovation and Science Agenda, to shield directors from personal liability provided the distressed company is genuinely attempting to restructure.
“The review identified many examples where the safe harbour has helped achieve restructures to the benefit of both creditors and employees. The review found that, overall, the safe harbour offers considerable assistance in encouraging turnarounds,” Mr Sukkar said.
The government commissioned an independent panel of experts to conduct the review between August and November 2021, chaired by Genevieve Sexton.
This actually has nothing to do with the complex, bureaucratic, financial advice safe harbour steps within the Best Interest Duty. Don’t expect the current government to fix that. They don’t want to make it easier for consumers to access professional advice. They want consumers to buy junk insurance from backpacker call centres, and dodgy investments from online spruikers.
FAR too little FAR too late. means nothing now that advisers are leaving in droves. Disgustingly slow action but too late now anyway.