H1 FY26 Corporate Insolvency Report

Media release – 25 March 2026

For immediate release

Insolvency concerns rise as Middle East crisis, rate increases and enforcement activity tighten pressure on businesses

Insolvency Australia’s latest Corporate Insolvency Index for the first half of FY26 shows that while headline insolvency volumes have stabilised, mounting economic pressures and renewed enforcement activity are placing Australian businesses under increasing strain.

With further base rate increases, ongoing instability in the Middle East, and rising fuel and fertiliser costs flowing through to operating expenses, conditions are tightening again as the financial year progresses.

There were 7,413 corporate insolvency appointments recorded nationally for the six months to 31 December 2025, broadly in line with the same period last year. However, beneath that stability, the data points to a shift toward more formal enforcement outcomes.

A 19% increase in court-ordered liquidations and a 15% rise in controller appointments highlights a clear return of creditor action, including from the ATO and secured lenders, as more businesses are pushed into formal processes.

At the same time, creditors’ voluntary liquidations remain the most common appointment type, reinforcing that many directors are recognising when a business is no longer viable and taking steps to wind it down properly.

Small business restructuring appointments have declined by 35%, suggesting the initial surge in uptake has eased, and that timing is becoming more critical for those looking to pursue turnaround options.

Gareth Gammon, Director of Insolvency Australia, says the headline stability in the numbers should not be mistaken for improving conditions.

“The numbers might look flat, but the pressure is still building. Costs are rising again, confidence is fragile, and creditors are clearly back in the market,” Gammon says.

“We’re seeing a shift from businesses trying to trade through, to more being pushed into formal outcomes.”

Gammon says the shift in restructuring activity is an important signal.

“Small business restructuring has been and will continue to be a valuable tool, and the best outcomes for all stakeholders are typically achieved when directors act early,” he says.
“Leave it too late and those options narrow, and in some cases you end up in a liquidation that could have been avoided.”

Looking ahead, the second half of FY26 is expected to remain challenging.

“With rate increases continuing, geopolitical pressures feeding into input costs, and enforcement activity staying high, there is a real risk that conditions tighten further before they improve,” Gammon says.

Specialist firms gain ground nationally

The report also highlights an evolving competitive landscape, with several specialist insolvency and restructuring firms continuing to build market share nationally, while others are establishing strong positions in particular sectors, regions and restructuring niches.

Gammon says the consistent message for directors and advisers remains unchanged.

“The earlier you get advice, the more options you have. That can materially change the outcome,” he says. “Registered liquidators are best placed to guide those decisions, and there is a strong pool of experienced practitioners across the country.”

The full Insolvency Australia Corporate Insolvency Index (H1 FY26) provides a detailed breakdown of appointments by firm, practitioner and location across Australia.

Media enquiries

Gareth Gammon
Director, Insolvency Australia
1300 037 027
enquiries@insolvencyaustralia.com.au
www.insolvencyaustralia.com.au

Editor’s notes

• Insolvency Australia has been producing its Corporate Insolvency Index reports on a half-year and full-year basis for the past four years, providing one of the most comprehensive and consistent data sets on insolvency activity in Australia.
• Copies of previous reports are available at:
  https://www.insolvencyaustralia.com.au/information/reports/
• The reports are based on publicly available data, primarily sourced from ASIC, and are analysed to provide insights by firm, practitioner and location across Australia.
• Insolvency Australia is the first and only online marketplace platform connecting businesses, individuals and their advisers with ASIC-registered liquidators and AFSA-registered bankruptcy trustees.
• The platform is designed to improve transparency and access to insolvency services, enabling directors, accountants, lawyers, creditors and other stakeholders to identify and engage appropriately qualified practitioners.
• The Corporate Insolvency Index is widely used by insolvency professionals, accounting and legal firms, lenders, government bodies, and media as a benchmark for market activity and trends.