Relevant federal ministers whose portfolios involve insolvency law are primarily Mr Mark Dreyfuss QC as Attorney-General, Dr Jim Chalmers as Treasurer and Ms Julie Collins as the Minister for Small Business. Other relevant ministers cover employment law and FEG, and Aboriginal and Torres Strait Islander corporations.
It is useful even necessary to know the names of those ministers in government who handle what aspects of insolvency law, and also what reform in their respective portfolios is pending.
Personal insolvency
The Minister now responsible is the Attorney-General, Mr Mark Dreyfuss QC. There is an outstanding reform inquiry to reduce the period of bankruptcy to one year, among other reforms of Part IX debt agreements, and Part X agreements. These were raised in a discussion paper in January 2021 in the context, inter alia, of the impact of COVID-19 on small business. While small business corporate insolvency reforms were hurried through in January 2021, equivalent personal insolvency reforms remained unattended, under Michaelia Cash and Amanda Stoker, as at May 2022. The one-year bankruptcy was in fact first raised as a proposed reform in 2015.
Apart from AFSA, these reforms would benefit from input by Treasury, including the Small Business Ombudsman (ASBFEO) and ATO, and and ASIC.
Separately, family law, which often intersects with bankruptcy, is thankfully within the same department.
ILRA 2016
In both personal and corporate insolvency, it seems that the changes introduced by the Insolvency Law Reform Act 2016 are due to be reviewed this year, by Treasury, Attorney-General’s Department, ASIC and AFSA.[1] That would be quite a review, including as to the process of regulation of insolvency practitioners.
Corporate insolvency
In corporate insolvency, the Treasurer is Dr Jim Chalmers, and the Minister for Small Business is Ms Julie Collins and Assistant Treasurer Mr Stephen Jones.
As to law reform, there has been a consultation about the law of insolvent corporate trading trusts (but not including trusts that serve to defeat creditors), and a consultation about Part 5.1 schemes of arrangement. Responses from the government on both were left pending as at May 2022. A report on the s 588GA safe harbour regime also needs consideration.
ASIC powers, and its fees and funding, are handled by Treasury.
Cross-border insolvency
Treasury also handles the Cross-Border Insolvency Act 2008, as to personal insolvency and corporate insolvency, but AGD handles section 29 Bankruptcy Act cross-border powers.
Indigenous Australians
The insolvency of Aboriginal and Torres Strait Islander corporations is handled by Ms Linda Burney as the Minister for Indigenous Australians in the Department of Prime Minister and Cabinet. Following a review of the Act, changes proposed under the Corporations (Aboriginal and Torres Strait Islander) Amendment Bill 2021 remained pending as at May 2022.
Employment
The Minister for Employment and Workplace Relations Mr Tony Burke is responsible for the Fair Entitlements Guarantee scheme. Resolution of the arcane process of protection of employee rights in insolvency would be one useful law reform item; calls to reform the application of small business rules in an insolvency are another, the AAT member saying in one case that
“I respectfully suggest that the attention of the Attorney General be drawn to the injustice that appears to be created in this kind of matter when the intention of the legislature was to enact beneficial legislation”.[2]
Drafting
Legislative drafting, including how to define bankruptcy, comes under AGD. As to drafting, post Covid-19 insolvency rules in relation to on-line meetings and communications come under the Treasurer for corporate insolvency, and under the AGD for personal insolvency. Hence the rules are no longer harmonised.
Miscellaneous
There are often other miscellaneous intersections – for example with child support, environmental, mining and competition laws, and productivity. These don’t need listing. They are examples of the nature of the unpredictable impact of insolvency law.
Ministers don’t often exercise powers in insolvency law; rather power is exercised by government officials, for example in relation to the issue of summonses or notices, and more so in personal insolvency than in corporate. It is more important to know the relevant Ministers for the purpose of law reform and representation, and where law reform crosses departmental lines, as in SME insolvency, to ensure both ministers or more are informed.
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[1] The Explanatory Memorandum to the Insolvency Law Reform Bill 2015 whose laws commenced in 2017, under the heading Post implementation consultation, refers to the need [9.377] “to review the effectiveness of the changes it is proposed that the Treasury, Attorney-General’s Department, ASIC and AFSA undertake a review five years after implementation. The review would assess the impact of the proposal and its effectiveness in meeting its objectives, taking account of any implementation and administrations costs”.
[2] Bower v AGD [220] AATA 4353
