other government stimulus measures, but will probably need to explore restructuring or insolvency solutions once they end. Another 25 per cent have not claimed support payments but also expect to consider restructuring or winding up their businesses. Cashflow and turnover were the key sources of stress for one third of survey respondents, compared to just 10 per cent who said the end of JobKeeper is their primary concern. But it might not be so straightforward, since the cuts to JobKeeper payments that are coming at the end of September 2020 and again in March 2021 could lead to cashflow and turnover problems. “These are telling statistics,” said Andrew Spring, a partner at Jirsch Sutherland, in a media release about the survey results. While it might seem as if Covid-19 has already wreaked havoc on the retail sector, judging by the high-profile collapses of Seafolly, Tigerlily, T.M. Lewin, PAS Group, G-Star Raw and Kikki K over the past five months, the number of retailers that entered administration in April and May 2020 was actually down 34 per cent from the same two months last year, according to data from the Australian Securities and Investments Commission.  This is likely due to a combination of government support, as well as temporary changes to the corporations act, including a six-month moratorium on directors being held personally liable for insolvent trading, starting March 25, and a six-month break from publicly listed companies’ continuous disclosure obligations, starting May 26. These measures have allowed businesses that otherwise might have been forced into administration to continue trading. There are at least 1,000 of these so-called ‘zombie businesses’ currently in operation, according to a report by the ABC, which cited an estimate by the Australian Restructuring Insolvency and Turnaround Association. When the support programs and legal protections inevitably end, experts believe there will be an even bigger wave of retail administrations. “Retailers will have to deal with the backlog of debt,” said Mark Korda, co-founder and partner of the advisory firm KordaMentha. “They will have to come to arrangements with landlords and suppliers. If not, many retailers may have to go into voluntary administration to deal with the debt.” According to Korda, going into administration for strategic reasons can actually lead to a fitter and leaner business, but the downside is that suppliers and creditors lose touch with the business. That is why he would like to see insolvent trading protection for directors, an idea he put forward in The Australian Financial Review before it was announced by the government, extended for another six months. “If not, directors will be more concerned about their own personal position rather than the company’s because there are onerous personal liabilities for trading while insolvent,” he said. With a possible surge in administrations on the horizon, some groups see an opportunity to change the process itself.  KPMG recently called for the creation of a new type of administration, which would allow companies that were solvent before Covid-19 to repay debts over two years, while they recover from the pandemic. It would also allow owners and managers to maintain control and restructure the business themselves, and remove the burden of lengthy investigations. That idea is similar to several recommendations in a recent report from the Australian Small Business and Family Enterprise Ombudsman, following an inquiry into the impact of current insolvency practices on small businesses. But while appetite for reform appears to be widespread, one major obstacle remains, according to Spring, the partner at Jirsch Sutherland. “The challenge is finding a balance between the multiplicity of the role of the insolvency professional,” he told Inside Retail. According to Spring, this role includes assisting in the rescue of debtor businesses or the recycling of their resources; protecting the interests of, providing transparency and maximising returns to creditors; and undertaking investigations on behalf of regulators. The insolvency regime in Australia has not been reshaped since the early 1990s, but Spring said there is one reason the corporate sector should still be hopeful of reform.  “If the ‘new normal’ post-Covid landscape can be strived for in a minefield such as industrial relations, then why not insolvencies?”