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More records set – September insolvency statistics released

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ASIC have recently released the insolvency statistics for September 2011. They reveal the number of corporate insolvencies in September 2011 is down slightly from August 2011 but it has still set a number of “highest ever” records for 2011. Liquidators in Tasmania and Western Australia are busy with further large increases in the number of appointments in those states.

The key statistics are:

  • The number of companies entering some form of insolvency administration in the month of September 2011 was 991. That figure is down slightly from August 2011 which was 1,049.  And here is an interesting comparison – the insolvency number for September 2007 (so pre-GFC) was 557.
  • The September insolvencies are the highest on record for a September and continues the trend for the calendar year with six of the nine months of 2011 being the highest ever for each of those months.
  • The rolling year to September 2011 has seen 10,228 insolvencies which is the highest yearly total since records have been kept.
  • Geographically, the bad news continues in Tasmania and WA this calendar year – Tasmanian insolvencies have increased 94% when compared to the average of the same period over the previous 5 years and WA insolvencies are up 71%.

We are still seeing fallout from the GFC in 2008.  The numbers reflect a high number of small insolvencies rather than the smaller number of big value insolvencies we saw in 2008 and 2009.

In particular, the ATO continues to work through its arrears book from that time.  The ATO agreed to over 600,000 repayment schemes post GFC.  At the end of June 2010 there were still 113,000 repayment schemes in place but that reduced to 41,000 as at June 2011.  Many repayment schemes had two year terms and so that grace period has come to an end.  Many of those companies simply cannot pay their tax debts and the ATO is working its way through them.

And where is it heading – more of the same I would expect.

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