AICD calls for temporary COVID-19 relief to be extended

The COVID-19 pandemic is creating unprecedented challenges for Australian companies and, as a result, the Federal Government introduced a number of welcome relief measures that have supported organisations to maintain jobs through the crisis.

AICD CEO and Managing Director, Angus Armour, said, “The COVID-19 crisis is far from over. The resurgence of cases in Victoria and warnings in NSW highlight the day to day uncertainty of this health crisis and the damage that uncertainty does to the economy.”

“The Federal Government was quick to take critical steps to provide relief but the impacts from this pandemic will continue beyond the original six-month reprieve.” 

Given the on-going uncertainty, both in Australia and globally, the AICD is calling for the following measures to be extended until the end of the 2020 calendar year: 

• Insolvent trading relief;
• Ability for companies to hold virtual annual general meetings; and
• Amendments to re-insert a fault element into continuous disclosure laws.

"The insolvent trading relief is not about supporting businesses with no viable future. Directors must continue to think carefully about their ongoing duty to act in the best interests of the corporation, including the interests of creditors when approaching insolvency, and whether incurring additional liabilities would be a prudent course of action,” Mr Armour said.

To further improve business confidence, the AICD is also calling for a tapered and targeted phase out of Government support and stimulus measures.

In the AICD’s recent COVID-19 director survey, 81 per cent of respondents indicated they would prefer to see a cautious phasing out of stimulus policies such as JobKeeper rather than a rapid wind-down.

“With the impact of COVID-19 continuing to have a detrimental effect on business and the economy, a tailored approach to support measures is required to transition the economy,” Mr Armour said.

“It’s encouraging to see the Government considering a more tailored, sectoral approach to financial support going forward. This is critical in preventing a rapid deterioration in overall economic conditions.”

“Given the critical social and health services delivered by many NFP organisations the AICD believes additional Government support for the sector is required.  Providing as much funding certainty as possible will be crucial.”