In March 2020, the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) was enacted, providing temporary relief for businesses in financial difficulty. Some of the changes introduced included:
- a new insolvent trading ‘safe harbour’ comprising a six-month moratorium on insolvent trading liability for company directors in relation to debts incurred ‘in the ordinary course of the company’s business;’
- an increase of the threshold at which creditors can issue a statutory demand to a company from $2,000 to $20,000, and an increase in the period for a response from 21 days from the date of service to 6 months; and,
- an increase of the minimum debt to initiate bankruptcy proceedings against an individual from $5000 to $20 000 and an increase in the period for a response from 21 days from the date of service to 6 months.
Originally the measures were scheduled to end on 24 September, but they will now be extended to 31 December 2020 under the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 (Cth).