The delay in the federal government responding to the 2023 PJC Report on Corporate Insolvency until now, over 3 years later, and then half-heartedly, is shown to be consistent with a lack of response to many law reform inquiries into the Corporations Act over the years, and no doubt other laws besides.
In “Out of Sight, Out of Mind: A Critique of the Federal Government’s Response to Corporate Law Reform Inquiries”,[1] 2025, the authors give a detailed account of the many law reform inquiries over the years and show that the recommendations published in the final reports of those inquiries
“often appear to receive little or no response from, or to be rarely implemented by, the federal government”.
They explain that the parliamentary rules require a response within 3 months to Senate, House and Parliamentary Joint Committee reports, there is currently no such requirement for reports issued by the ALRC, the Productivity Commission or royal commissions.
Of 52 reports the authors analysed,
“40.38% of these reports received no formal federal government response to their Corporations Act reform recommendations while a further 13.46% only received a partial response. In addition, only 3.85% of these reports have had their Corporations Act reform recommendations wholly implemented by the federal government and 50% saw no implementation of their recommendations whatsoever”.
Why some law reforms progress and others do not has elsewhere been explained in political terms, in the context of power and influence. Legislation can be used by “special interest groups to promote their own agendas, by ‘rent-seeking’ by interest groups, or vote trading by legislators, or both”. Nor do laws have solely instrumental purposes; legislation can also have a symbolic status, reinforcing certain ‘values, ideals and ways of thinking about government and society’.[2]
Delay in insolvency law reform
In the context of the 2023 PJC Report, my own suggestions for the delay are at least two – the enormity of the task and the resources required, and the perceived relevance of insolvency law.
Full reform of Chapter 5 – External Administration – might be difficult but at the same time it is different. It arguably does not belong in the Corporations Act at all, in fact may suffer from being there. It has discrete principles and purposes. And it needs alignment with personal insolvency, each Act’s Schedule 2 going some way towards that. That might be a step too far for the government, although any step might be.
As to the second, insolvency law reform is a hard sell, “lose lose” often being the outcome, including restructuring. Lack of input from the discipline of economics results in limited information about its financial operations and its broader benefits. But then the numbers are not large – 14,000 corporate administrations out of 3 million or so companies; and the same number of personal insolvencies of an adult population of 22 million. Politicians might well give priority to the bigger societal issues that exist.
An affront
Apart from the inaction on law reform proposals, and the reasons for this, the delay in even responding to the July 2023 PJC Report until now is an affront to those who have spent time and resources in addressing the call for submissions. Those individual efforts should be seen as a contribution to the democratic system, whatever the quality of the submission made. The community response could well develop that such effort is not worthwhile.
Inability to cope?
Maybe the 3 year period of inaction is a sign of the federal government, any government, not being able to cope. In the current debate about our low national productivity, the government itself should be included.
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[1] J Overland, C Free, C Guerit, [2025] MelbULawRw 7; (2025) 48(2) Melbourne University Law Review 525. https://classic.austlii.edu.au/au/journals/MelbULawRw/2025/7.html
[2] Stephen Bottomley, ‘The Complexity of Corporate Law’ (2022) 44(3) Sydney Law Review 415.
