Business insolvencies rising as interest rates bite

The number of Australian companies that became insolvent or appointed administrators fell sharply during the COVID-19 pandemic, due to factors such as government financial support and relaxed insolvency laws.

However, Australian Chamber of Commerce & Industry CEO Andrew McKellar warns that more businesses are likely to collapse in the next six months or so, amid rising interest rates for business loans and increased cost pressures due to inflation.

He adds that the Australian Tax Office is also starting to focus more on outstanding debts after providing some relief during the pandemic.

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