SENATOR DEAN SMITH
SHADOW ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY
SENATOR FOR WESTERN AUSTRALIA
MEDIA RELEASE
9 August 2024
OVER 1,000 BUSINESSES INSOLVENT IN WA’S LAST FINANCIAL YEAR
The latest figures produced by The Australian Securities and Investments Commission (ASIC) reveal that more than 1,000 businesses in WA were insolvent by the end of June 2024.
According to Senator Dean Smith, the ASIC data shows that 1,079 companies during the last financial year entered insolvency: nearly double the figures two years ago.
“The cumulative impact of thirteen-interest rate rises over the past two years is now having a devastating impact on many businesses throughout Western Australia as underlined by these shocking figures.”
“During the June quarter alone, there were 308 companies entering insolvency or one every seven hours.”
“The ASIC figures show that during this quarter two sectors accounted for around one in three of all insolvencies in WA – Construction (20%) and Accommodation & Food (14%).”
Senator Smith added that small businesses, in particular, were being hit hard by the triple whammy of rising costs due to inflation, whilst also having to service higher interest rate payments, while at the same time consumers were becoming more fragile because of the cost-of-living crisis.
“Small businesses account for 97% of all businesses in Western Australia with many families operating on small margins.”
“They are very sensitive to even a small cut back in consumer spending.”
“The impact of the cost-of-living crisis on consumers is underlined by the collapse in household savings with the latest official figures showing the ratio of household savings is now the lowest in 16 years at just 0.9%.”
“Unfortunately, many small businesses in WA are teetering on the edge of financial oblivion due to the growing cost of living crisis.”
“They are at the coal face of this cost-of-living crisis and unless the crisis ends soon the number of business insolvencies in WA could explode over the coming year,” he said.
“Labor’s inflation debacle has now caused a cost-of-doing-business crisis in WA.”
“Anthony Albanese has failed to tackle inflation and now small-medium sized businesses are being forced to close their doors and lay off staff.”
ENDS