Small business restructuring process on track to surpass voluntary liquidations

Recent data released by the Australian Securities and Investments Commission (ASIC) reveals a record high of 1,245 insolvency appointments in May 2024, marking a 44% increase from a year ago and a remarkable 122% surge compared to 2022. 

This upsurge in business failures has been linked to adverse economic conditions, recovery actions for outstanding business tax debts, declining consumer spending, and persistent inflationary pressures including higher operating expenses. This has impacted companies across various sectors of the economy which is exacerbating financial stress for SMEs nationwide.  

In March, the ABC reported that the Australian Taxation Office (ATO) was pursuing more than $34 billion in debts owed by small businesses and sole traders.