The Federal Government is providing the corporate watchdog with $11.4million in additional funding to help strengthen scrutiny of the insolvency industry.
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Outgoing attorney-general Robert McClelland published a suite of new proposals for the industry yesterday.
They include new money for the Australian Securities and Investments Commission to reform the way insolvency professionals are registered, disciplined and regulated.
The Government is keen to curb excessive fees and provide creditors with greater power to remove insolvency practitioners.
''This reform package seeks to ensure that Australia's insolvency industry is underpinned by professionalism, efficiency and improved outcomes for creditors,'' Mr McClelland said in a joint statement with parliamentary secretary David Bradbury.
Mr Bradbury said recent high-profile cases of misconduct by corporate insolvency practitioners have had a profound impact on confidence in the industry.
''These reforms are about restoring the community's confidence that there is a system of effective regulation, high professional standards, transparency and accountability and power for creditors to remove liquidators if necessary,'' MrBradbury said.
The commission's new powers will force industry practitioners to answer questions about their administration or their conduct.
Other proposals include changes to the standards of entry to the industry that would require practitioners to have undertaken insolvency specific education, and a new registration and disciplinary system based on the personal insolvency regime.
From July 1, 2012 insolvency notices will be required to be posted to a new commission website, replacing 53,000 newspaper advertisements during the next four years and making it easier for creditors to access information.
This measure is expected to save the industry about $15 million over four years.
The proposals follow extensive consultation with stakeholders on a broad range of policy options that were issued for discussion by the Government in June.
The Insolvency Practitioners Association has welcomed the proposals, saying it would greatly benefit its members and creditors.
Association president Robyn Erskine said while the incidence of so-called rogue liquidators was very small, her organisation strongly favoured strengthening the regime to promote early detection and removal. Consultation on the proposals closes on February 3, 2012.
Mr McClelland has become Minister for Emergency Management, Housing and Homelessness.
He has been replaced as Attorney-General by former health minister Nicola Roxon.