Treasurer Josh Frydenberg believes the federal government’s new insolvency laws will help keep businesses operating and Australians in jobs.
The laws, first announced in September, aim to help small businesses to survive the impact of the coronavirus.
“As the economy continues to recover it will be critical that distressed businesses have the necessary flexibility to either restructure or to wind down their operations in an orderly way,” Mr Frydenberg said, introducing legislation to parliament on Thursday.
The legislation will come in effect from January 1 once passed by the parliament and will assist in the debt restructuring process for small business while providing faster and lower cost liquidation.
It came as new research found 42 per cent of employees believe their finances have been negatively impacted by the coronavirus pandemic through business and employment disruption.
Only one in 10 Australians, whose employment or business had not been impacted or benefited through COVID-19, reported a positive impact on their financial situation.
More worrying, the AMP 2020 financial wellness report found 50 per cent of all Australians reported some level of stress about their finances.
It found 1.8 million Australian workers have suffered either severe or moderate financial stress in 2020, a figure that is likely to worsen as the COVID-19 pandemic continues to take its toll.
One in five female employees reported severe or moderate levels of financial stress, almost double the figure recorded for male workers.
AMP calculated the cost to the economy is $30.9 billion annually due to employee distraction and absenteeism, while modelling suggests the stress impact of the pandemic could drain a further $4.4 billion.
“Australians continue to suffer the debilitating effects of financial stress, which is taking a huge personal toll on mental and physical wellbeing, particularly for younger women and single parents,” AMP director of workplace super Ilaine Anderson said.
“While COVID-19 is understandably creating significantly more anxiety for those directly impacted and blurring work and home life, the research shows that financial stress remains a systemic issue in Australian society.”
National Australia Bank chief economist Alan Oster warns the economic outlook will remain “bumpy”.
NAB is predicting the September quarter national accounts due in early December will show the economy expanding by three per cent after the steep seven per cent contraction in June quarter.
However, future quarters are not so clear.
“We have still got the issue about what is going to happen as some of things like JobKeeper, etcetera, fade way and also as unemployment goes up,” he said in a NAB podcast update on its economic forecasts.
In parliament, Mr Frydenberg was asked by shadow treasurer Jim Chalmers to confirm jobs were lost in the fortnight after the JobKeeper wage subsidy was pared back in September.
“I can confirm that the unemployment ticked up to 6.9 per cent,” he replied.
But he also pointed out that both Dr Chalmers and Opposition Leader Anthony Albanese had previously supported the tapering of such payments.