Budget Overview

On Tuesday, 6 October 2020, Treasurer Josh Frydenberg handed down the Federal Budget which was largely defined by the COVID-19 pandemic. At a glance A wide range of sectors and stakeholders are affected by the Budget. At a high level, the winners and losers of this Budget have been reported as follows: (Source: ABC News)   Key takeaways The economy Australia’s economy has taken one of its largest blows as a result of the pandemic. Since the July economic update, Australia’s debt and deficit have increased with the country headed toward a record debt of $1 trillion by June 2024. Our current net debt is $703 billion. Income tax cuts The Treasurer announced Stage 2 of the Government’s tax cuts will provide relief for more than 11 million Australians. The tax cuts will be brought forward and can be backdated to July 2020, affecting each income threshold differently. An additional $17.8 billion in personal income tax relief is being delivered to aid economic recovery with a further $12.5 billion over the next year. This will add to the…

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Big news for struggling small businesses
Small businesses during Covid-19

Big news for struggling small businesses

Last week, the Federal Government announced proposed changes to corporate insolvency laws designed to help boost the survival rate of small businesses. The proposed changes would take effect from 1 January 2021 and aim to reduce the complexity, time, and costs involved for small businesses dealing with financial distress. This reform is in response to the economic impact of COVID-19 and allows small businesses to either restructure or alternatively streamline the liquidation process. The new procedure is a ‘debtor in possession’ model which draws on features of the US-style chapter 11 bankruptcy procedure. Essentially this means that the director of a debtor company remains in place during the relevant moratorium period and does not have to hand over control of the business to an external insolvency accountant. The process is only available to incorporated entities with liabilities of less than $1 million. Debt restructuring The overhaul of the insolvency rules is to create a new debt restructuring procedure. The process involves: The director of a small business in financial distress appoints a small business restructuring practitioner to assess…

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Retail tenants and relief against forfeiture during COVID-19

If a tenant breaches a lease for non-payment of rent, there is a fundamental breach which gives a landlord the right to terminate the lease and take possession of the premises. However, a tenant has the right to apply to the court for an order restraining the landlord from doing so, otherwise known as relief against forfeiture. In the early stages of the COVID-19 pandemic, courts had yet to redefine the criteria used to award a tenant protection from the re-entry by their landlord. The High Court has previously applied a flexible approach to the instances where relief against forfeiture has been granted. However, how such principles that grant relief against forfeiture operate alongside constantly changing COVID-19 rules and regulations has been unclear. Would the courts extend the tenant’s rights and apply the right to relief more liberally? Sneakerboy Retail Pty Ltd v Georges Properties Pty Ltd [2020] NSWSC 996, decided by Justice Robb on 31 July 2020, goes someway to providing a list of considerations that clarify this issue in the current global health crisis. Background On…

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How COVID-19 has impacted tenants’ and landlords’ rights: Residential Tenancies (Amendment) COVID-19 Regulation

The Residential Tenancies (Amendment) COVID‑19 Regulation 2020 generally prohibits, until 14 October 2020, subject to further extension (the moratorium period), a landlord from giving a tenant who is a member of a household financially impacted by the COVID‑19 pandemic (an impacted tenant) a termination notice for non‑payment of rental charges and provides that during the moratorium period a landlord may only evict an impacted tenant for non‑payment of rent or charges if: the landlord gives a termination notice or applies for a termination order at least 60 days after the commencement of the regulation the landlord and impacted tenant had participated in good faith in a formal rent negotiation process about the rent or charges payable it is fair and reasonable in the circumstances of a case for the landlord to give the termination notice or apply for the order. The Regulation requires a landlord under a residential tenancy agreement to give at least 90 days’ notice of the termination of: a fixed term tenancy at the end of the term a periodic tenancy a tenancy because of…

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