H1 FY24 – Insolvency Australia Corporate Insolvency Index

The H1 FY24 edition of Insolvency Australia’s Corporate Insolvency Index stats have been published. From a calendar-year perspective, it has started with a significant uptick in business insolvencies, particularly in the construction and hospitality sectors, as we return to pre-pandemic levels and continue to play catch up.

The resounding theme from last year – and borne out by the H1 2024 business insolvency statistics – is the rate at which the ATO and Big Four banks are redoubling their debt collection efforts and enforcing recovery action. During the first half of the financial year, Court wind-ups jumped 133% compared to the previous corresponding period.

The ATO has a massive debt book, and after three years of covid-driven ‘Mr Nice Guy’, it is now using all the tools in its arsenal to collect the monies owed. It’s a scenario that’s unlikely to change, according to the many practitioners I have spoken with in recent months. Cost-of-living pressures, high inflation, lower consumer discretionary spend, high borrowing costs, tighter trading conditions – not to mention large legacy debts from the covid era – are combining to create a perfect storm of stressors. However, in more positive news, what we are also seeing is the increase in Small Business Restructuring (SBR), as more directors and advisers become aware of the benefits of the scheme and of acting early. As you’ll see in this report, many of the top firms by appointment volume undertook a significant number of SBRs in HY1 2024.

We hope you find our latest Corporate Insolvency Index of interest and gain a good insight into the state of the sector and particularly how firms and individual liquidators around the country are performing.

Finally, a special thank you to our sponsor of this Corporate Insolvency Index, G&H Financial.

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