In March this year, the Australian Government implemented new measures to assist financially distressed businesses and individuals to navigate the economic impacts of COVID-19.

Have the measures worked?

As expected, we have seen a drastic downturn in the filing of Wind Up Applications and Creditors' Petitions with the Courts, and the uptake of voluntary administrations.

The number of Wind Up Applications filed between July and August 2020, as compared to July and August 2021, are down by 89% and Court Liquidations have also significantly decreased by 74%. Voluntary Administrations and Liquidations have also decreased, by 66% and 37% respectively as compared to the same July and August period last year.

The temporary measures were initially scheduled to end this month, however the Government has this week announced that the changes to the various insolvency provisions will remain in place until at least 31 December 20201.

What can we expect in 2021?

While the temporary measures continue to assist companies and individuals experiencing financial distress as a result of the economic impacts of COVID-19, there is a significant risk that they are only delaying the inevitable. Interestingly, it has been reported today, that the Australian Taxation Office has launched a "soft" restart of its debt and lodgment activities as it looks to reengage with businesses2.

There will inevitably be a boom in appointments of Liquidators, Administrators and Trustees when measures come to an end and authorities, such as the ATO, apply pressure to businesses (as was the case historically).

In the interim, and while the temporary measures remain in place, alternative arrangements to recover outstanding accounts should not be held. Lynch Meyer's Debt Recovery and Credit Management Team are experienced in tailoring collection action, regardless of the Government's temporary measures currently in place.


1 Joint Media Release from The Honourable Josh Frydenberg MP and The Honourable Christian Porter MP, 'Extension of Temporary Relief for Financially Distressed Businesses' 7 September 2020. See,

2 See:

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