COVID-19 Measures and the Risk of Zombie Firms in Australia

Synopsis Two temporary insolvency law changes, which came into force in March 2020 as part of Australia’s response to COVID-19 and have already ended, are discussed. Financial support and more enduring insolvency law reforms are also noted. Publicly available data is used to graph the relatively low number of companies undergoing liquidation and related statutory processes in Australia in 2020 and thus far in 2021. It is hypothesised that recent measures may be contributing to the accrual of poorly performing companies in the Australian economy.