The figures come from an annual survey conducted by KordaMentha and Turnaround Management Association (TMA) of 115 professionals linked to the restructuring sector. The survey also found that sentiment about the economy was now worse than it had been for the five years it has been running.
The TMA covers the advisory groups that usually work on larger corporate collapses and the law firms and debt market professionals that assist them.
Increased interest rates and ongoing concerns about costs – such as building materials,rents,transport and power costs – are driving the dour outlook for the economy,according to the survey.
Another concern is the increased enforcement activity of the Australian Taxation Office,which provided a two-year grace period to businesses that had failed to pay their taxes during the COVID pandemic.
Corporate insolvencies jumped 62 per cent in the year to June to the highest level since 2018-2019. According to figures released by the corporate watchdog,7943 companies appointed administrators,liquidators or receivers in 2022-2023.
There are also growing signs that company directors,particularly small business leaders,are going broke. A separate report from the Australian Financial Security Authority found that personal bankruptcies had dramatically increased in May,jumping to 1031 from 769 the month prior.