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New insolvency arrangements address rigidities in the system

"The insolvency measures announced by the Treasurer today are an important step in addressing the rigidities for businesses with relatively small levels of liabilities," Innes Willox, Chief Executive of the national employer association Ai Group, said today.

"Australia's current overly risk averse insolvency arrangements provide little scope for businesses to work with their creditors to restructure their operations to put the business on a sustainable footing. Many businesses that could work their way out of trouble face too many barriers and are prematurely wound up.

"The new measures are a sensible step that could pave the way for further insolvency reforms that extend these greater flexibilities to a larger range of businesses. This is another welcome measure that will potentially provide further support for the thousands of businesses under stress due to COVID restrictions," Mr Willox said.

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