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Economy

Australia risks 'insolvency tsunami' when coronavirus aid ends

'October cliff' looms for weak businesses that were likely doomed before pandemic

A moratorium on insolvent trading appears to have allowed many Australian businesses to forge ahead, when they normally would have had to wind up their operations.   © Reuters

SYDNEY -- Australia faces an "insolvency tsunami" when government handouts to help businesses cope with coronavirus restrictions expire on Sept. 29.

The payments are a major plank of the government's stimulus package, which now runs into the hundreds of billions of dollars. They were designed to help businesses keep paying staff and creditors, including those in the "hibernation" period the government ordered for "nonessential" establishments such as bars, nail salons and fashion boutiques.

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