The first half of 2020 has had significant legal changes for the agricultural industry. It started with changes to the Summary Offences Act to deal with trespassers on farmland, followed shortly by the Genetically-Modified Crops Management (Designated Area) Amendement Bill 2019, which is intended to allow the use of GM crops. The second half of 2020 will see more changes, with consultation on new mining regulations in August.
A number of changes occurring at a federal level, likely less on the radar for those in ag and related industries, are in response to coronavirus, and have been implemented by the Coronavirus Economic Response Package Omnibus Act 2020. Of note is the changes including temporary amendments to the provisions relating to companies and individuals who are insolvent. These changes include:
- in respect of a company, both increasing the threshold at which creditors can seek to wind up a company, increasing it from $2000 to a $20,000 debt, and increasing the time within which the company has to respond to the demand or pay the debt, from 21 days to six months;
- in respect of an individual, both increasing the threshold at which creditors can seek to bankrupt an individual, increasing it from $2000 to a $20.000 debt, and increasing the time within which the individual has to respond to the demand or pay the debt, from 21 days to six months.
While these changes may seem of little relevance to ag-related industries, their impact should not be underestimated.
It means for someone who is owed money for their products, whether it be crops, livestock, machinery, seeds, fertiliser or the like, the avenues available to chase a company or an individual for those debts has been significantly altered and it will place a greater financial burden on the businesses or individuals owed money. The flip side is for people or businesses finding things difficult financially, it could give them further time to resolve any financial issues.
While these changes will potentially place a greater financial burden on individuals and businesses, it is important to remember they are temporary and provide an opportunity to review your debtor processes.
This article was published in The Stock Journal on Thursday 11 June 2020.