External administrations exceed GFC levels
Times are tougher for small to medium-sized businesses than at the height of the global financial crisis (GFC) - if corporate insolvencies and external administrations are to be taken as a measure.
That is the analysis of independent accounting firm Taylor Woodings, which said the latest Australian Securities and Investments Commission data had shown the number of external administrations for the three months ending 31 August had totalled 2997 - up 16 per cent on the same period last year and 23 per cent higher than at the height of the GFC in 2009.
The analysis said court wind-ups had continued to increase, rising 17.4 per cent in July to their highest level in more than two years, and suggested this was a sign that the Australian Taxation Office (ATO) was continuing enforcement actions against companies.
The Taylor Woodings analysis said until consumer confidence improved and stabilised, the company expected the number of external administrations to remain stubbornly high for a period of time.
"Due to current economic uncertainty, we expect consumers to continue to save, and direct surplus cash to debt reduction," it said. "This will continue to place a strain on industries reliant on discretionary spending such as retail, housing, entertainment, restaurants and tourism."
AUTHOR
Mike Taylor
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