The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Bernie Ripoll

Bernie Ripoll

Parliamentary Secretary to the Treasurer

5 March 2012 - 18 September 2013

Media Release of 19/12/2012

NO.058

Insolvency Reforms To Benefit Business

Joint media release with
The Hon Nicola Roxon MP
Attorney-General
Minister for Emergency Managmeent

Draft laws reforming and modernising the way insolvency professionals are registered, disciplined and regulated have been released for public comment.

Attorney-General Nicola Roxon and Parliamentary Secretary to the Treasurer Bernie Ripoll today welcomed the release of the first tranche of draft laws, which will benefit Australian businesses.

"It is important the market has confidence in Australia's personal and corporate insolvency standards. This is why the Gillard Government is acting to ensure that we have a uniform and robust regime for registering insolvency practitioners," said Ms Roxon.

"The Gillard Government is committed to restoring the community's confidence in the effective regulation, high professional standards, transparency and accountability of the insolvency profession following recent high profile cases of misconduct by corporate insolvency practitioners," said Mr Ripoll.

The draft Insolvency Law Reform Bill 2012 amends the personal and corporate insolvency laws to improve regulatory oversight of the insolvency profession, improve value for money for recipients of insolvency services, and enhance creditor rights across all forms of insolvency administration.

In particular, these draft laws provide greater powers for creditors to remove practitioners and curb excessive fees, and therefore deliver better outcomes for creditors, many of whom are small businesses.

The draft Bill implements the reform package outlined in the Government's proposals paper, A modernisation and harmonisation of the regulatory framework applying to insolvency practitioners in Australia, released in December last year.

The release of the exposure draft of the Bill follows extensive consultation with stakeholders on the options and proposals papers released in 2011.

"These amendments are an important step in ensuring our corporate laws are up to date to support and promote firms and businesses operating in Australia," Ms Roxon said.

"Reducing the costs for business of interacting with divergent laws is a priority for the Government," Mr Ripoll said.

"An important element of the Bill is the alignment of personal and corporate insolvency regulation in a number of key areas. These amendments seek to deliver greater consistency and less complexity for employees, creditors and practitioners, who all need to interact in the event of a personal or corporate insolvency," said Mr Ripoll.

The Bill seeks to harmonise the regulation of personal insolvency or bankruptcy, which is administered by the Insolvency and Trustee Service Australia within the Attorney-General's portfolio, and corporate insolvency, which is regulated by the Australian Securities and Investments Commission under the Treasury portfolio.

Ms Roxon said that the reforms outlined in the Bill would make it easier for the two Commonwealth insolvency regulators to communicate with each other about practitioner concerns, which will ensure Australia's insolvency industry promotes a high level of practitioner professionalism and competence.

"The reforms will also benefit small business creditors dealing with interrelated corporate and personal insolvencies," said Ms Roxon.

A second tranche of the Bill is expected to be released shortly setting out consequential amendments to corporate and personal insolvency legislation as a result of the reforms, as well as transitional measures.

The draft Bill and explanatory material can be found on the Treasury website.

Submissions on the Bill close on 8 March 2013.

19 December 2012