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Time for the bad insolvency practitioners to be wack(a)ed.

COSBOA congratulates the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) on the formation of the insolvency inquiry and particularly for the appointment of the highly regarded ex Senator John ‘Wacka’ Williams as its Chairman.

Peter Strong, CEO of COSBOA, stated today “the need for an inquiry into this sector is obvious. Mr Williams has led previous similar inquiries when he was a Senator and he understands the difficulties he will face in combatting the poor uncooperative attitudes of many insolvency practitioners. These people too often see a small business person in trouble as nothing more than a opportunity to make money. The smaller practitioners in this sector are often better at the job as they can relate to the needs of a small business person, especially those under stress. Larger firms may just see a small business person as a KPI.”

COSBOA believes that the current practices inhibit gathering information to inform better understanding of insolvency. We certainly need a change in attitude by one of the sector’s representative associations, ARITA, if positive change is to occur. The media release from that organisation which attacks Mr Williams and the formation of the reference group is arrogant and reflects how out of touch that organisation is with reality.

Mr Strong added “If there is nothing to see, why is ARITA launching its own “Reform Commission” and why did ARITA feel the need to write to all Federal politicians? (As mentioned in their media release). Surely if ARITA felt the need to launch its own Commission then it has done so because there are serious issues. We have to ask the question - who is operating the Financial Recovery Law Reform Commission and is it wholly independent of the Industry – or is this a case of the industry seeking to review itself? That never works.”

Mr Strong further added “It is not the role of insolvency professionals to save a business. They are appointed after a business goes into insolvency and they have absolutely no place providing advice to business owners facing financial distress – that is the role of the accountancy profession and others more qualified. Calling an insolvency expert to rescue a business in distress is a bit like calling a coroner for a serious illness, instead of a doctor. It’s the wrong time.”


NOTE: COSBOA strongly supports the Carnell Review and the appointment of someone with the contextual experience of former Senator John Williams as its leader. We are concerned that an organisation that made the statement below in their media release also claims to be professional and more knowledgeable than Mr Williams or the ASBFEO. They aren’t.

Statement from the ARITA media release: “By the time the vast majority small business reach a decision to appoint an insolvency practitioner, they are generally well beyond saving”.

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