(5 May 2026 – Australia) SMEs are heavily exposed to cash flow management stress ahead of incoming Payday Super reform from 1 July 2026.
Small businesses face rising costs risking insolvency and tighter liquidity conditions. Sectors with high payroll costs and thin margins, including construction, labour hire, hospitality and healthcare, are expected to face the greatest strain as payment obligations tighten.
ASIC data reveals construction accounts for 1 in 4 external administrations, while accommodation and food services represents over 1 in 10 insolvencies nationwide, highlighting underlying credit quality issues in key sectors.
“The gap between awareness and readiness points to a material liquidity risk. On the surface, it’s encouraging that most SMEs are aware of the changes,” Sutton said. “But when a majority have failed to make any financial preparations, it’s clear there is a risk that many businesses are underestimating the cash flow impact” commented ScotPac CEO Jon Sutton.
“Rising input costs and global uncertainty, including the flow-on effects of Middle East tensions, are compounding those pressures. Businesses must focus on cash flow planning ahead of the transition. From July, that flexibility disappears. For businesses already operating with tight margins, that could create real pressure if they’re not prepared.”
The ScotPac SME Growth Index suggests many businesses remain unprepared for the shift, despite high awareness. While 88 percent of SMEs report some understanding of the changes, 68 percent have made no cash flow preparations, with smaller firms particularly exposed as 78 percent of micro-SMEs have yet to act.
About the SME Growth Index
- Commencing in March 2014, ScotPac’s twice-yearly SME Growth Index is Australia’s longest-running research report on SME sentiment towards revenue growth prospects.
- The Round 24 research was in November 2025 and conducted by East & Partners who interviewed 728 SME enterprises with annual revenues of A$1-20 million.
- SMEs surveyed have operated continuously for an average of 16.3 years and manage, on average, 51 full-time equivalent employees.
- Sectors represented in the survey included Property & Business Services (14 percent), Wholesale (13 percent), Manufacturing (12 percent), Retail (10 percent), Transport & Storage (10 percent), Personal & Other Services (10 percent), Construction (10 percent) and other industries including Mining & Resources, Agriculture / Forestry / Fishing, Media & Telco, Accommodation, Cafes & Restaurants, Finance & Insurance (non-bank) and Electricity, Gas & Water.