CreditorWatch, AICM and ARITA call upon the government not to extend safe harbour provisions
CreditorWatch, in partnership with Australian Restructuring Insolvency & Turnaround Association (ARITA) and the Australian Institute of Credit Management (AICM), is leading calls from the credit industry to not extend the temporary insolvency measures past September 25, 2020.
In CreditorWatch’s new whitepaper entitled ‘Set the course: navigating a way out of the temporary insolvency measures’, a survey of CreditorWatch customers and ARITA and AICM members shows the credit industry is overwhelmingly against the extension of the temporary insolvency.
When asked whether the temporary insolvency moratorium should be extended:
• 50 per cent of CreditorWatch’s clients said no.
• 73 per cent of ARITA’s members said no.
• 46 per cent of AICM’s members said no.
When asked if the length of time after a statutory demand is issued before action is taken should remain at six months:
• 64 per cent of CreditorWatch’s clients said no.
• 82 per cent of ARITA’s members said no.
• 58 per cent of AICM’s members said no.
When asked if the threshold at which action may be taken after a statutory demand is issued should remain at $20,000:
• 64 per cent of CreditorWatch’s clients said no.
• 57 per cent of ARITA’s members said no.
• 53 per cent of AICM’s members said no.
How to strengthen business confidence and the Australian economy
The paper calls upon the government to not extend safe harbour provisions further and outlines key recommendations, They include:
- The federal government should stick to the 25 September deadline for the end of the temporary insolvency trading moratorium.
- Companies that know they are at risk of insolvency should immediately:
- Start talking to their creditors about how to work through this situation.
- Talk to a qualified insolvency professional to create a restructuring plan so they are ready for the end of these provisions or take the legal steps to put their business into administration.
What do the experts say?
Patrick Coghlan (CEO of CreditorWatch), Nick Pilavidis (CEO of AICM) and John Winter (CEO of ARITA) raised concerns that their clients and members are essentially trading with insolvent businesses. If these measures don’t end on September 25, it will create a snowball effect that will put creditors at risk of collapse.
Read what Patrick, Nick and John have to say in the full whitepaper here.
We have also released other COVID-19 content to help creditors through the pandemic. Click here to read more.
