By The Editor
In a further sign of the tougher conditions enveloping Australian businesses, new statistics show corporate insolvencies rose by more than nine per cent in 2011, the fourth consecutive yearly increase.
ASIC’s figures show nearly 10,500 businesses entered external administration during the last calendar year, although the number of companies becoming insolvent eased in the last three months of 2011.
The number of corporate insolvencies has risen from 7,521 in 2007, the last year before the global financial crisis, to 10,481 in 2011. While the nine per cent increase doesn’t come close to the 21 per cent increase in 2008, the stats confirm the effects of the GFC continue to linger.
Many of the current insolvencies are smaller businesses, especially building firms, carpenters and retailers, unlike the GFC in 2008 which hit bigger businesses harder.
Analysts suggest the higher number of insolvencies is also due to a crackdown from banks and the Australian Tax Office, which are pursuing unpaid debts and tax liabilities harder than before.
These numbers, added to other statistics released recently which showed a higher number of businesses closing, continue to paint a picture of a small business sector finding it harder to access finance and pay their bills.