AIIP conference in Canberra – update

TMA Chair Maria O’Brien attended the Associate of Independent Insolvency Practitioners (AIIP) conference in Canberra on 14 July, representing the TMA. The AIIP has as members around a third of Australia’s registered liquidator community.

Senator Deborah O’Neill delivered a keynote address and she spoke to the following:

• The Report of the Parliamentary Joint Committee on Corporations and Financial Services released on 12 July (the O’Neill Report) was a unanimous report, which bodes well for its implementation
• She noted the complexity of Australia’s corporate insolvency laws, and flagged that, in addition to a comprehensive review, the O’Neill Report made recommendations in relation to improved data collection, improved pathways for insolvency processes, changes to the Assetless Administration Fund, achieving greater gender diversity in the profession and reform in relation to trusts
• Specifically in relation to safe harbour, she recommended the implementation of the recommendations of the Safe Harbour Review report
• Senator O’Neill noted that the Small Business Restructuring regime needed to be cheaper and easier than other insolvency pathways
• In relation to gender diversity, Senator O’Neill observed that the “improvement” of the numbers of women liquidators to 1 in 10 was “truly alarming” and she was shocked at the 4000 hours requirement for registration as a liquidator which was an arbitrary measure which did not clearly connect with quality outcomes. Senator O’Neill noted the “cultural literacy” of women speaking to women; she noted that women innovate in different ways. She implored the men in the room to think carefully about they could bring about immediate improvements to gender diversity and thanked the women in the room for their leadership.
• In terms of the proposed comprehensive review, she noted the complexity of Chapter 5 of the Corporations Act and its “add ons”, and she was clear that the review she had in mind was not long, but deep and careful. It needed to consider the principles and objectives of corporate insolvency law, and particularly public interest objectives. She noted that there needed to be an emphasis on equitable outcomes (in which respect the current system was not perceived as fit for purpose) with particular regard to reducing harm to employees of insolvent companies and recognising that corporate insolvency has impacts for real people. She gave as an example of the impact of corporate insolvency the Crookwell pool: because of the builder’s insolvency, the town had an uncompleted pool which – of course – has implications for local children learning to swim and consequentially increases the risk of drowning. She reported that the town’s mayor had stood in front of trucks coming to take away materials on site. She noted that the industry was made up of professionals who had been educated partially or fully at public expense, which gave the industry a responsibility to use their knowledge for the public good.

Maria then sat on a panel with Senator O’Neill, Dr Jason Harris, Matt Steen and Anthony Warner to discuss the O’Neill Report.  Feedback was positive, with Dr Harris noting he had hoped for more specificity in relation to both trusts and FEG. Maria advocated for a prompt implementation of the Safe Harbour Review report recommendations, and for preservation of business and jobs to be a guiding principle of any reforms to corporate insolvency reforms. She noted some immediate steps that could be taken in relation to gender, including reforms by ASIC to RG258 and Form 903B to make clear the existence of the discretion of the Committee around the 4000 hours requirement and examples of how it had been exercised, and that given the speed with which the Safe Harbour Review had been undertaken, a review of the qualification requirements for registered liquidators was also something that could be done reasonably quickly with regard to other comparable jurisdictions.

There were also updates from:

• Tim Beresford, Chief Executive of AFSA who noted that women were now 12% of registered trustees in bankruptcy. Tim observed that 50% of bankrupts owe less than $50,000. He confirmed that AFSA was, based on tip offs, “disrupting” untrustworthy advisers including A&M Group trading as Debt Negotiators. He said “our regulatory posture has shifted and we are unapologetic about it”

• Greg Yanco, Executive Director at ASIC who stated that ASIC welcomed the O’Neill Report. He noted ASIC’s restructure (which now has Greg in charge of Regulation and Supervision) and that ASIC was significantly investing in data and digital. Greg noted the stats showing a significantly accelerated uptake Small Business Restructuring, and that untrustworthy advisers were a key focus for ASIC.

The TMA thanks the AIIP for their generosity in including us in their conference.