May Insolvency Statistics
ASIC have just released their insolvency statistics to the month of May 2011.
Total insolvency appointments at 817 were about the same as April 2011 (812) which continues the recent trend – post GFC the insolvency numbers rose to record highs then dropped back in 2010 but in 2011 the numbers have risen again. Several months of 2011 have been the highest recorded. May 2011 is not a record month but it remains high.
There is a lot of talk in the media about the two speed economy and many pundits site that as the reason for the rise in corporate insolvencies. Not me. At Dissolve we receive a lot of enquiries on our free advisory line so they are direct from from “the coal face”. The main driver is definitely the ATO. The ATO, at the Government’s request, was very accommodating to small business in 2009 and through much of 2010 but that has turned around. The ATO is now much stricter in granting extra time for companies to meet their tax commitments and the ATO is working its way through a large number of companies that have long outstanding tax debts.
Looking at the data state by state it has been relatively steady for most states, but WA is a standout. The number of insolvencies for the 12 months to May 2011 for Western Australia has jumped 20% when compared to the 12 months to May 2010.