(6 January 2025 – Australia) Escalating cost pressures and assertive Tax Office collection activities is driving small businesses into insolvency according to the latest ScotPac SME Growth Index Report.
ScotPac released the latest version of its ScotPac SME Growth Index Report based on direct interviews with 726 SMEs with revenues of A$1-20 million conducted by East & Partners indicating that thousands of Australian SMEs were facing a ‘survival test’ as rising costs and ATO collections accelerate insolvencies.
One in four Australian SMEs could be tipped into insolvency risk if they suddenly lost just one key client or supplier while one in two SMEs would suffer severe cash flow problems or face negative financial impacts that would last three months or more.
“Despite the current economic indicators raising concern, businesses that sought professional guidance when dealing with cost escalations and ATO debt are best placed to recover. In the current high-cost environment, SMEs are understandably nervous about disruptions to their cash flow and supply chains, particularly those operating on thin margins” stated ScotPac CEO Jon Sutton.