Too little leeway on insolvent trading

It is understandable that the government is looking beyond a couple of months to try to control a pandemic.

But the decision to relieve directors of their duty to prevent insolvent trading does not go far enough.

Six months might be fine as a general timeframe but it is fanciful to suggest that the relaxing of certain legal obligations for a short period is going to fix the problems some businesses will have during this year.

Consider the issue of personal liability in more detail.

There is no guarantee that a business can resuscitate its operations during the six months mentioned by the Federal Government as a result of the economic impact of the coronavirus.

The Federal Government ought to reflect further.

It may be more appropriate for the government to given businesses a nine or 12-month period so that their turnaround exercises are given more time to succeed.

Businesses do dumb things. Some businesses employ people who later provide to be dishonest and commit fraud.

This current situation with the coronavirus was not brought on by corporate managerial incompetence, financial mismanagement or fraud.

Small businesses in particular need to be given a chance and these corporate law measures - along with the small business financing measures announced last week by banks - given them some hope in a time of grave uncertainty.