THE Australian Small Business and Family Enterprise Ombudsman, Kate Carnell says the Insolvency Practices Inquiry has heard a vast number of harrowing small business stories, shining a light on the failures of the insolvency system as well as the challenges faced by industry professionals.

Ms Carnell today released a discussion paper, seeking feedback on developing a best practice framework for small businesses facing insolvency and for practitioners managing external administrations.

“More than 300 small businesses have come forward to share their experiences of going through the insolvency process,” Ms Carnell said.

“Many have spoken of being left with nothing – no business, a ruined reputation and often no home and broken families. It’s absolutely gut-wrenching.

“The overwhelming experience of small businesses has been a loss of control, costs that strip the value of a business and a lack of transparency throughout the process.

“We also appreciate the constructive feedback we’ve had from insolvency practitioners, industry groups, lawyers and financial advisors," Ms Carnell said.

“They have sent the clear message that small businesses experiencing financial difficulties are often leaving it too late to seek help.

“What we know is the sooner small and family businesses get help, the more likely it is they can achieve a turnaround or restructure.

“ASIC has just released new data revealing more than 8,000 businesses entered external administration in 2018/19. 51 percent of those businesses reported inadequate cash flow as the key cause of failure.

“It’s crucial that small and family businesses experiencing financial difficulties understand they don’t have to go it alone. This is the time to lean on a trusted advisor, like an accountant," Ms Carnell said.

“Industry professionals have also called for a streamlined insolvency process for small business, with minimal red tape that provides a real option to turn around the profitable parts of the business.

“In releasing this discussion paper, we’ve outlined the key pain points for small businesses as well as the challenges for registered liquidators.

“In the meantime, this discussion paper poses a number of questions we are seeking feedback on, particularly around the transparency of the insolvency process.

“We have also extended the deadline to share insolvency stories via our online survey or by providing a submission to This email address is being protected from spambots. You need JavaScript enabled to view it. to the end of January 2020.”

The final report will be released in March 2020.

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TODAY the PFAS Sub-committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) tabled the first report of its inquiry into PFAS remediation in and around Defence bases.

The chair of the PFAS Sub-committee the Dr John McVeigh MP said that committee members have made a commitment to keep the public informed about Defence’s progress under its National PFAS Investigation and Management Program, while research continues to better understand the nature and impacts of PFAS substances.

This report presents key information from the Department of Defence about its ongoing  evaluation and remediation of per-and poly-fluoroalkyl (PFAS) contamination at 28 Defence sites, and also updated advice about research into the health impacts of PFAS from the Australian National University’s PFAS Health Study, at the National Centre for Epidemiology and Population Health.

"The sub-committee welcomed frank advice from Defence— about what it is getting right in its PFAS remediation program; as well as the nature of ongoing research. The Department also outlined its ongoing communication strategy in communities and online, to keep the public up to date about progress in this work," Dr McVeigh said.

The ANU’s PFAS Health Study provided a progress report on work commissioned by the Department of Health. The Committee heard that the Health study is in a vital phase of evidence gathering and analysis. The data collected will allow for a longitudinal evaluation of any potential PFAS health impacts including any mental health issues. It will be local and verifiable, based on blood samples and surveys of people living in affected communities, of past residents, and of three unaffected communities for comparison.

"The information in this first report provides a solid foundation for further review when the inquiry proceeds in the new year," Dr McVeigh said. "In particular, the sub-committee will seek further clarification from responsible agencies about the relationship between health advice, food safety and environmental impacts which could remain of concern in the community."

The PFAS inquiry’s First report is now available on the inquiry website.

Information about the PFAS Sub-committee’s ongoing scrutiny program, and forthcoming public hearings, will be available on the JSCFADT committee website in 2020.

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The Maritime Union of Australia is demanding drastic action from the NSW and Federal Governments to address the public health emergency caused by bushfire smoke and to rectify the completely inadequate responses to this major health crisis.

MUA Sydney Branch secretary Paul McAleer said this was a public health emergency that needs to be fixed.

“The bottom line is the people of NSW, and more broadly across the whole country, are faced with a climate crisis driving the largest bushfire season ever and bankrupt conservative governments can’t even buy a plane nor equip the community and firefighters to adequately deal with this inevitability,” Mr McAleer said.

“Politicians have manufactured a climate crisis through ignoring science and failing to resource communities to face the threat. Workers are exposed to the consequences of this failure and must act to defend their health, safety and homes. The MUA Sydney Branch will promote all efforts to protect ourselves against the climate catastrophe that has been thrust into our communities, our workplaces and our lives”.

Even worse, multi-national stevedore DP World has attacked workers, putting wharfies off the payroll because the workforce had to act on its own due to the boss’s lack of consideration and care to the public health crisis facing workers.

MUA assistant national secretary Warren Smith said: “For the third day in two weeks, smoke has become so intolerable in Sydney that maritime workers have been forced to stop work. Maritime workers in Newcastle and Port Kembla have also been forced to down tools due to the severe health risks and effects of working in such high levels of smoke.

“We demand action from governments to protect workers and protect the community, and will continue to stand up to employers who want us to work in intolerable conditions.”

Respected doctors and medical organisations have declared a public health emergency, making the lack of action disturbing and of great concern.

Organisations including the Royal Australasian College of Physicians, Lung foundation, Asthma Australia and the Australasian College for Emergency Medicine all agree we are in a public health crisis.

MUA Southern NSW Branch secretary Mich Cross said of Port Kembla: “Operations where our members are involved have been reassessed. The workforce at the stevedoring operations, as always, are working safely and continually monitoring the smoke and heat situation. They will not put themselves or workmates at risk.”

Prime Minister Scott Morrison was warned this would be the worst fire season we have ever faced. In April 2019, a group of former fire chiefs wrote to Prime Minister Scott Morrison to warn him that there was insufficient equipment in Australia to deal with it, and that we should not be relying on volunteers to address natural disasters.

They called for immediate funding for large aerial fire tankers, and a recognition that climate change has fundamentally changed the nature of firefighting in Australia. The Prime Minister ignored their advice, and is still refusing to meet with them.

The MUA asks:
- Where is the public health campaign and response?
- Where are the clear instructions to employers about keeping workers safe?
- Why no guidance from Worksafe NSW or Safe Work Australia on managing risks of bushfire smoke at work?
- Why no hourly reporting of PM 2.5 when the government already collects this information? We need to know the facts to make good decisions about when it is safe to work outside, when it is safe to take kids to the park, or let children outside for recess?
- Why is there no clear guidance to schools on what actions to take at different levels of air pollution?
- Why are workers being put off the payroll when conditions outside are hazardous?

The MUA calls on all governments to support our communities by supporting our firefighters and giving them the resources they need immediately.
We also demand that no worker be docked pay due to the climate crisis which has resulted in days of hazardous levels of smoke across NSW.

https://www.mua.org.au/news/mua-safety-bulletin-bushfire-smoke-work

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THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has a range of concerns about the newly approved version of the Banking Code of Practice in effect from March 2020, saying it doesn’t go far enough to protect small businesses.

“The ABA claims it has implemented the Royal Commission recommendations but it has not acted on all of the recommendations including one that is critical to small business,” Ms Carnell said.

“Commissioner Hayne recommended that the definition of a small business should be businesses that apply for a loan up to $5 million and have fewer than 100 employees.

“Despite our repeated efforts, the Code only protects small businesses with up to $3 million in total debt to all credit providers.

“What that means is that a large number of small businesses, particularly those capital intensive businesses such as agriculture, building and manufacturing, are not covered by the Code.

“While we support approved amendments to the Code to help drought-affected farmers, that same level of protection ought to be given to small businesses in these rural and remote communities that are also suffering," Ms Carnell said.

“Of particular concern, is a new addition to the Code under paragraph 115 b)** which in effect, allows banks to take action against the small business guarantor, before enforcing recovery against the security provided by the small business borrower.

“This is totally unacceptable and has the potential to be seriously detrimental to the small business borrower.

“During the Royal Commission, Commissioner Hayne acknowledged the ABA Banking Code of Practice is the chief protection for small business borrowers and as such, it needs real and meaningful changes to give it teeth," she said.

“While the Code has been improved, the number of get-out-of-jail clauses for the banks still dilute the protections for small businesses.

“We will continue to push for a better framework for a balanced relationship between banks and their small business customers.”

www.asbfeo.gov.au

Background:

(*) Commissioner Hayne Recommendation 1.10 – Definition of ‘small business’

The ABA should amend the definition of ‘small business’ in the Banking Code so that the Code applies to any business or group employing fewer than 100 full-time equivalent employees, where the loan applied for is less than $5 million.

(**)Banking Code of Practice 2019:

115. 115. However, the restrictions under paragraphs 113 and 114 do:
116. a)  not apply if you have specifically agreed in writing after the default notice is issued and we have informed you of the limitations of our enforcement rights under this chapter that they do  not apply; or
117. b)  not require us to first enforce any mortgage or other security that  the borrower has provided if we reasonably expect that the net proceeds of that enforcement will not be sufficient to repay a substantial  portion of the guaranteed liability, or because of the borrower not providing us with information, documents, or access to premises or assets as required, we are unable to reasonably assess whether the net proceeds of that enforcement will not be sufficient to repay a substantial portion of the guaranteed liability.

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