E-Alert: Insolvency relief in a changed business environment

It is well known that Australia has been referred to as the lucky country having not experienced a recession during times when many others have. The global coronavirus pandemic has however presented the world with new challenges and, for the first time in nearly 30 years, Australia is now in a recession with a recent media release on the monetary policy by the Reserve Bank of Australia stating "[t]he global economy is experiencing a severe contraction as countries seek to contain the coronavirus".¹

With predictions of an "avalanche" of insolvency cases which would impact the country,² on 24 March 2020 the Australian Federal Government passed a range of regulatory relief for business and individuals³ with the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (the Act) to temporarily address and manage these inevitable impacts. On 7 September 2020, the Treasury and the Attorney General announced the temporary extension of this relief until 31 December 2020.