'More harm than good': Businesses get reprieve but thousands still set to fail | JennieDuke
Shielding businesses from insolvency until the end of the year will leave 5000 companies facing closure in 2021 with tens of thousands more expected to struggle when government support ends.from late-September to December 31 in a bid to help companies stay afloat through the coronavirus pandemic and "bounce back" in future.
He said the federal government "needs to work on a road out of the safe harbour provisions", under which creditors are unable to issue statutory demands or bankruptcy notices unless the debt totals $20,000 or more. Directors are also protected from personal liability under insolvent trading rules if debts are incurred, except where they break the law.
The situation has concerned the Australian Restructuring Insolvency and Turnaround Association whose chief executive John Winter said had left some businesses using the provisions as an excuse to not pay their bills. Council of Small Business Organisations of Australia chief executive Peter Strong said "tens of thousands" of businesses are at risk in Victoria due to the extensions of the lockdowns ahead of the critical Christmas trading period. He said some companies are choosing to operate knowing they won't revive so their workers can receive the JobKeeper wage subsidy rather than leave them on the lower JobSeeker dole payment.
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