Australia’s bankruptcy rules are about to be overhauled in a bid to keep small business afloat and save jobs from the COVID-19 driven recession.

And it won’t impact the budget bottom line, according to the Federal Treasurer.

The reform will prevent administrators from taking over and will be available to businesses with liabilities up to $1 million.

There are fears it may “prop up” businesses that were already doomed to fail, but Josh Frydenberg didn’t agree.

“These are very viable businesses that, once the restrictions ease and they can open their doors, they can get back on their feet,” he said.

“This will give them time to do that.”

Click PLAY below to hear the treasurer explain