ASIC’s latest annual statistics of reports lodged by registered liquidators about Australian corporate insolvency, released today, has highlighted the lag of the impact of the COVID-19 pandemic on small business.

For the period 1 July 2022 to 30 June 2023, small to medium size corporate insolvencies continued to dominate external administrators’ reports. Of the reports lodged, 83% had assets of $100,000 or less, 82% had fewer than 20 employees, 32% had liabilities of less than $250,000 and 68% had liabilities of less than $1 million. In this group of creditors, 96% received between 0–11 cents in the dollar, reflecting the asset/liability profile of small to medium size corporate insolvencies.

The highest number of reports were received for insolvencies in the construction industry (28%), followed by the accommodation and food services industry (15%).

Registered liquidators reported on average three to four causes of failures for a company in each report. The most common reported causes were inadequate cash flow or high cash use (52% of reports), followed by ‘other’ (50% of reports) and trading losses (49% of reports). ASIC’s further analysis of the ‘other’ causes showed 19% of reports identified the COVID-19 pandemic as a contributing cause.

Most reports were received for insolvencies in New South Wales (41%), followed by Victoria (27%) and Queensland (18%).

Registered liquidators continue to improve the timeliness in lodging their reports, with 77% now lodged less than six months after appointment, reflecting a longer-term trend.

For more information, refer to the Series 3 statistics published today and ASIC Information Sheet 80 How to interpret ASIC’s corporate insolvency statistics (INFO 80).