Is it relevant outside Canberra whether a law is within or without Treasury’s portfolio?

With the government’s Treasury department busily introducing changes to the law to allow virtual meeting technology (VMT) for corporate liquidations, and liquidator job interviews, the latest being about polls and voting, it does not seem to be ensuring the same changes are made in personal bankruptcy law, although it is reverting to the “show of hands” terminology discarded in bankruptcy some time ago.

Harmer harmonisation plea ignored

The 1988 Harmer Report had naively simply ‘recommended’ that Australia’s insolvency laws be kept harmonised:

‘to the extent that future reforms proposed for the law relating to either individual or corporate insolvency touch matters which are common to both (particularly where those reforms affect procedural matters) … corresponding reforms should be made to both sets of laws’.[1]

That never happened, in fact, just the opposite.

Insolvency Law Reform Act 2016

Further similar recommendations were made by the Productivity Commission in 2010. Ultimately did the government act, through the Insolvency Law Reform Act 2016. It was evident that Australia’s bankruptcy laws were seen to have the better processes, and were more effective. As the aim of that reform Act was to harmonise insolvency law, it did so by bringing much of corporate insolvency law – handled by Treasury – into line with personal insolvency law.

But the ILRA had not legislated in advance for the silo approach of the public sector.

Treasury’s reform of its own laws

Treasury is now reforming its “portfolio laws”, any inconsistency thereby created with laws outside its portfolio notwithstanding.

Is it relevant beyond Canberra whether a law is within or without Treasury’s portfolio?

It seem it is, and things are now back to normal with separate limited law reform submissions sought, and offered.[2]

Guidance requested – from ASIC, AFSA, FEG, Treasury, AGD, the Treasurer and the Attorneys

In any event, accepting that things will not change, the various regulators – ASIC and AFSA, and FEG, and Treasury and AGD, and the Treasurer and the Attorneys should get together and issues updates on where the insolvency laws are now different. We already have different insolvency laws for the service of documents by email, meetings of creditors, and newly different processes for registration and discipline committees.

Suggestions for others may well be invited.

One difficulty is that while the two regulators – ASIC and AFSA – are required to “work cooperatively” with each other, this is limited to practitioners who are both trustees and liquidators,[3] but other law may prevail.[4] Though some departments seem to attend to their responsibilities under the PGPA Act only in form.

Until then, creditors, employees and practitioners, and insolvency text book writers, will just have to deal with the accumulating red tape imposed.

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