BUSINESS FAILURES – AUSTRALIA

Big tax debts forcing closures

roymorgansocial Leave a comment

Original article by Cameron Micallef
The Australian – Page: 15 : 14-Jan-25

Data from CreditorWatch shows that 5,097 businesses owed more than $100,000 to the Australian Taxation Office in 2024; some 1,715 of these businesses were declared insolvent or ceased trading. In addition, the owners of more than 2,430 firms opted for restructuring rather than liquidation. The ATO advised in November than it intends to ‘aggressively’ pursue outstanding small business tax debts, which totalled $34bn at the end of 2024. CreditorWatch CEO Patrick Coghlan has defended the ATO’s stance, arguing that it is simply trying to collect the tax that all companies are obliged to pay.

CORPORATES
CREDITOR WATCH PTY LTD, AUSTRALIAN TAXATION OFFICE

Big tax debts forcing closures

roymorgansocial Leave a comment

Original article by Cameron Micallef
The Australian – Page: 15 : 14-Jan-25

Data from CreditorWatch shows that 5,097 businesses owed more than $100,000 to the Australian Taxation Office in 2024; some 1,715 of these businesses were declared insolvent or ceased trading. In addition, the owners of more than 2,430 firms opted for restructuring rather than liquidation. The ATO advised in November than it intends to ‘aggressively’ pursue outstanding small business tax debts, which totalled $34bn at the end of 2024. CreditorWatch CEO Patrick Coghlan has defended the ATO’s stance, arguing that it is simply trying to collect the tax that all companies are obliged to pay.

CORPORATES
CREDITOR WATCH PTY LTD, AUSTRALIAN TAXATION OFFICE

Rate cut won’t stop insolvency trend overnight

roymorgansocial Leave a comment

Original article by Matt Bell
The Australian – Page: 15 : 8-Jan-25

Data from the Australian Securities & Investments Commission shows that nearly 26,000 businesses have become insolvent since the May 2022 federal election, including a record 12,405 in the first 11 months of 2024. McGrathNicol’s executive chairman Jason Preston says corporate Australia is being affected by factors such as structural challenges in many sectors, high interest rates and the cost-of-living crisis. Preston expects businesses to continue to collapse in 2025, and notes that the eventual interest rate cuts will take some time to have a positive effect on the business sector and consumer sentiment.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, McGRATH NICOL AND PARTNERS SERVICES PTY LTD

Record insolvencies tarnish Chalmers’ spin

roymorgansocial Leave a comment

Original article by Geoff Chambers
The Australian – Page: 1 & 4 : 18-Dec-24

Data from the Australian Securities & Investments Commission undermines the federal government’s economic credentials. The figures show that 12,405 businesses were declared insolvent in the first 11 months of 2024. This includes a record 1,442 business failures in November, which is 62 per cent higher year-on-year. Nearly 26,000 businesses have collapsed since Labor won the May 2022 federal election; Deputy Opposition Leader Sussan Ley notes that this is approximately the same as the number of additional public servants Labor has hired since it took office. Separate data shows that the number of welfare recipients has risen by about 83,000 year-on-year.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA

Major airlines cashing in on Rexit

roymorgansocial Leave a comment

Original article by Joseph Lam
The Australian – Page: 15 : 13-Nov-24

Data from the Australian Competition & Consumer Commission shows that Qantas and Virgin have benefited from the collapse of Rex Airlines. The major carriers’ revenue per passenger on capital city routes has risen to $98.40, compared with $86.80 in July when Rex went into voluntary administration and ceased servicing these routes. The ACCC has warned that market concentration means that further increases in airfares are likely, while it may take some time for a serious third competitor to enter the domestic aviation market. Meanwhile, the federal government will provide Rex with $80m of taxpayers’ money to keep servicing its regional routes.

CORPORATES
REX AIRLINES PTY LTD, REGIONAL EXPRESS HOLDINGS LIMITED – ASX REX, QANTAS AIRWAYS LIMITED – ASX QAN, VIRGIN AUSTRALIA HOLDINGS LIMITED, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Record number of small businesses go to the wall

roymorgansocial Leave a comment

Original article by Geoff Chambers
The Australian – Page: 2 : 9-Oct-24

Data from the Australian Securities & Investments Commission shows that administrators were appointed to 6,636 companies in the six months to September. The data also shows that 11,053 companies went into administration in the 2023-24 financial year. Some 22,800 businesses have collapsed since the federal election in May 2022, and shadow small business minister Sussan Ley says the government is on track to be the worst on record with regard to business insolvencies. Meanwhile, a report from the Council of Small Business Organisations Australia and the Commonwealth Bank has warned that operating conditions for small businesses are "arguably the most challenging in living memory".

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, COUNCIL OF SMALL BUSINESS ORGANISATIONS OF AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Administrators for Rex to axe another 73 jobs at troubled regional airline

roymorgansocial Leave a comment

Original article by Kate Ainsworth
abc.net.au – Page: Online : 20-Aug-24

Some 594 employees of Rex Airlines have been retrenched since EY was appointed as the failed carrier’s administrator in late July. EY has advised 261 of Rex’s remaining employees via email that 73 of them will be sacked because they are surplus to the requirements of an airline that is now solely focused on servicing regional areas; all of the staff to be retrenched had been a part of Rex’s ill-fated expansion into capital city markets. Rex will have about 1,200 employees following the latest job cuts, which is similar to its staff levels prior to its expansion and the COVID-19 pandemic.

CORPORATES
REX AIRLINES PTY LTD, REGIONAL EXPRESS HOLDINGS LIMITED – ASX REX, ERNST AND YOUNG

Rex’s expansion push could leave regional travellers paying the price

roymorgansocial Leave a comment

Original article by Sezen Bakan
The New Daily – Page: Online : 31-Jul-24

Rex Airlines has advised that EY has been appointed as voluntary administrators of the Regional Express listed entity and a number of subsidiaries. Rex also announced that its fleet of Boeing 737s have been grounded and all flights on capital city routes have been cancelled; however, flights to regional destinations will continue to be serviced by its fleet of Saab 340s. Professor Pierre Benckendorff from the University of Queensland says airfares on capital city routes are unlikely to be affected if Rex is liquidated; he adds that airfares on regional routes could rise sharply due to lack of competition, and some routes may be discontinued.

CORPORATES
REX AIRLINES PTY LTD, REGIONAL EXPRESS HOLDINGS LIMITED – ASX REX, ERNST AND YOUNG, UNIVERSITY OF QUEENSLAND

Construction insolvencies on track to set record yearly high

roymorgansocial Leave a comment

Original article by Chris Herde
The Australian – Page: 17 : 23-Jul-24

About 400 licensed building companies were declared insolvent in each of the 2018 and 2019 calendar years. Data from Alares shows that there were a similar number of insolvencies during the first half of 2024, and the firm’s suggestions suggest that the full-year total will be around 700. Alares director Patrick Schweizer emphasises that its data excludes unlicensed building companies, which comprise the bulk of the construction sector.

CORPORATES
ALARES SYSTEMS PTY LTD

Bonza joins the scrapheap of airline failures

roymorgansocial Leave a comment

Original article by Robyn Ironside
The Australian – Page: 15 : 3-Jul-24

Creditors of failed budget airline Bonza have voted 35-6 in favour of liquidating the carrier. Administrator Hall Chadwick has advised that they had received no offers for Bonza or its assets, despite an extensive sales campaign. The formal vote to liquidate the company will allow Bonza’s employees to access the federal government’s fair entitlements guarantee scheme. Unions note that the decision to liquidate will provide Bonza’s employees with much-needed certainty, given that they have not been paid since March.

CORPORATES
BONZA AVIATION PTY LTD, HALL CHADWICK AUSTRALIA PTY LTD