The government's fuel crisis response is moving fast. And so far they appear to have learned from the mistakes of the COVID response.
As the PM said yesterday:
"This will not be like COVID. Partly because the nature of this global crisis is very different, but also because we have learned from that time — and we are deliberately taking a different approach."
That framing matters enormously for business owners and their advisers planning their way through this crisis.
𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗵𝗮𝘀 𝗱𝗼𝗻𝗲 so far:
🙂 Halved the fuel excise from 52.6c/L to 26.3c/L for three months. 🙂 Suspended the heavy vehicle road user charge for three months 🙂 Announced $1 billion of zero-interest loans (not grants) for fuel producers, fertiliser producers, and critical supply chain businesses. 🙂 Targeted ATO fuel response payment plans with limited GIC remission for businesses that can demonstrate fuel-specific cost impact, keep lodgements current, and show they could have paid if prices hadn't increased. 🙂 ATO compliance action will be "limited" in hard-hit industries, some debt collection "may be paused where appropriate" 🙂 The banking sector has flagged voluntary payment deferrals and emergency credit facilities for impacted industries. 🙂 Introduced the Fair Work Amendment (Fairer Fuel) Bill to accelerate cost-recovery for transport operators.
These are a range of quite limited and well targeted interventions.
What they haven’t done is the wide ranging, non-targeted interventions we saw during COVID:
🫥 No insolvent trading moratorium 🫥 No increase to the statutory demand threshold or extension to statutory demand response times 🫥 No changes to bankruptcy notice thresholds or timeframes 🫥 No broad based subsidies like JobKeeper 🫥 No blanket ATO enforcement moratorium 🫥 No commercial rent relief 🫥 No mandated lockdowns, WFH mandates, or business closures
In 2020, those COVID measures created a zombie company pandemic and an explosion in ATO debt that the economy is still recovering from today.
This time the government is explicitly avoiding that playbook. The $1 billion loan facility is lending, not grants and while the ATO is softening its posture, it’s not abandoning debt collection. Directors retain their ordinary obligations. Creditors can still enforce. Safe harbour still requires active engagement with a restructuring adviser.
Meanwhile the RBA is hiking into this crisis — cash rate at 4.10%, likely 4.35% by May (and over 4.5% by mid-year on some forecasts). There are no rate cuts coming. Businesses that were marginal before the fuel shock, particularly in transport, construction, and hospitality, are going to face a difficult few months.
If you're running or advising a business under pressure, the message from government is pretty clear: do not wait for a moratorium. It is not coming. The current measures are clearly designed for businesses that were viable before the fuel shock hit. If a business was already under pressure, the loan facility and ATO flexibility aren't going to bridge the gap and they're not designed to.
This time the solution for navigating the crisis will be early engagement and clever use of existing restructuring tools to protect and preserve impacted businesses until the crisis ends.