Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

The Abbott government is determined to repair our budget and to put Australia on a path of sustained prosperity and this, as I hope everyone has realised, requires some tough decisions to ensure that the load is shared fairly and responsibly. Accordingly, our budget will protect the most vulnerable members of our community.

We were pleased to work with Senator Wright to address concerns about the fee imposed on debtors who wish to file for bankruptcy. The government will not be opposing these disallowance motions, but it will mean that the cost of administering insolvent estates must be recovered from elsewhere in the insolvency system. This system plays an important part in the regulation of business and in fostering a flourishing economy in which investors and consumers can have confidence. Ironically, it is important to ensure the ongoing viability and integrity of the insolvency system. So the outcome of the proposed disallowance motions is that even more of the burden will be passed on to creditors through an increase in the asset realisation charge. The charge will be gradually increased to seven per cent from 4.7 per cent. It moves to six per cent on 1 July.

I hope people realise that creditors already bear heavy burdens in the insolvency system. They are the other side of the coin to those people who need to go into bankruptcy. While the distress associated with going into bankruptcy is huge, it is important to remember that creditors are not all from what Labor and the Greens would call the 'big end of town'. They are not all big banks and big businesses. Creditors include sole traders such as hardworking tradespeople—electricians, plumbers and the like. They include husband-and-wife businesses and many other sorts of small businesses. Even parents and siblings who might have gone guarantor for a loan for a car or something like that can be affected. The other side of the coin is the harm that can be done to creditors by bankruptcy.

With this in mind, the government will monitor closely the effects of the increased asset realisation charge to ensure that the insolvency system remains viable and that the burdens of insolvency are shared fairly.

Question agreed to.