Watchdog looks to business closure flood

Katina Curtis, AAP Senior Political Writer
(Australian Associated Press)

 

The corporate watchdog is preparing to deal with a flood of business failures once government coronavirus supports are taken away towards the end of the year.

The JobKeeper wage subsidies are scheduled to end in September, as are a raft of other supports including mortgage payment holidays and freezes on bankruptcy proceedings.

The Australian Securities and Investments Commission wants business owners to be prepared for what they need to think about once the help slows or ends.

“Obviously as restrictions are removed, businesses start to grapple with what is the actual financial circumstances they find themselves in,” commissioner Warren Day told a parliamentary committee hearing on Wednesday.

“We would expect … that there will be potentially more closures of businesses through that last quarter of this calendar year.

“What we’re doing in the meantime is actually putting out a lot of information to businesses about what does it take to orderly close or wind down a business so that there doesn’t need to be external administrators appointed and a winding up of that business.”

Mr Day said business owners should take advice from trusted advisors such as their accountants on the matter.

The information is available on ASIC’s COVID-19 news hub and is being distributed via state small business commissioners, the Australian small business ombudsman, and accountancy organisations.

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