The pain of insolvencies has long been distributed unequally. Share holders, owners and senior managers have no legal excuse for not knowing the risks or true financial prospects/status of an enterprise. The customers and employees have little prospect of knowing the relevant facts until it’s too late.
Suppliers who are also at risk have some knowledge, if only through not being paid on time. They are usually the first to act if the enterprise has not done so.
Agree it is wise to consider very carefully any change before it is enacted. It is curious that the customers who are in the greatest position of ignorance are also in the least position of entitlement.
Although the customer can choose to not make payment until the goods are on the counter or able to be in their possession, we continually accept terms that require payment in advance.
Is what needs to be changed in law, ahead of all else in the order of precedence of liquidation, customers who have paid in advance are entitled to either the goods and services promised, or compensation from the liquidation ahead of all else?
After all the entitlement of a company or entity to exist and operate is ultimately subject to the will of the voters as exercised through the parliament. So should the voters not come first?
One simple change that could make all others more prudent. Too many small businesses and enough larger ones fail. What cost to the economy of these failures compared to the benefits of the few that succeed? It would be of value to know the annual comaparison.
While a business can claim losses arising the average consumer gets no such benefit for the loss which is treated no different to a theft. Perhaps also customers should be entitled to claim from the ATO a reduction in pre tax income for any such loss?
