SP Hay headlines list of monthly insolvencies in SA

SP Hay and a North Adelaide fitness club were among last month’s list of insolvencies in SA amid signs the ATO is beginning to chase companies for tax debts.

The collapse of exporter SP Hay headlined last month’s list of insolvencies in South Australia amid signs the ATO is about to ramp up its debt collection efforts after more than 18 months of leniency.

Statistics compiled by the corporate regulator, the Australian Securities and Investments Commission, show that 19 South Australian companies were wound up or fell into administration in November, up from 14 in October.

SP Hay was the largest, with farmers across South Australia among close to 70 creditors left chasing $10 million in unpaid debts.

Agriculture, hospitality and construction businesses dominated last month’s list, which also included bespoke joinery manufacturer Swiss Joinery and an F45 health club in North Adelaide.

Swiss Joinery supplied to the new Meat & Wine Co. restaurant in Adelaide. Picture: NCA NewsWire / Kelly Barnes

The small increase in the number of local insolvencies last month follows early signals that the ATO could be about to ramp up its debt collection activities.

The tax office paused its winding up and debt enforcement actions during the onset of Covid-19 in early 2020 to avoid penalising businesses dealing with temporary lockdowns and enforced trading restrictions.

But last month it circulated a statement confirming debt recovery activities would recommence in New South Wales, Victoria and ACT.

BCR Advisory director Stephen James, who’s overseeing the winding up of Glynde-based Swiss Joinery, said the move would eventually have a flow on effect in South Australia, but that wasn’t likely until well into next year.

“That’s definitely going to be the trigger for a change in our industry because there isn’t a lot of pressure from the ATO at the moment,” he said.

“I think we’re starting to see that they’re re-engaging with businesses to follow up outstanding debts but I think they’re still reasonably accommodating where the business is proactive in that engagement.

“Probably only when they really get to those big outstanding debts and start to really push harder on collection, and use some of their more forceful collection tools that are available to them, that we’ll see an uplift in insolvencies.”

F45 at North Adelaide was run by Bodie Milsom before liquidators were called in last month. Picture: Roy van Der Vegt / AAP

Swiss Joinery had operated for more than 40 years, recently supplying to major projects including the $44m Memorial Drive upgrade, and bars and restaurants including iTL and Sôl Bar at SkyCity, and the new Meat & Wine Co steakhouse on Currie St.

Meanwhile trade tensions with China were flagged as a reason for the demise of SP Hay - an explanation disputed by several farmers who say the company’s problems started before the Chinese government cracked down on Australian hay exporters.

The closure of the F45 health club at North Adelaide follows a challenging period for gyms and fitness centres, which have been forced to close during lockdowns, and when allowed to open, have been subject to a raft of restrictions.

SV Partners director Alan Scott, who’s managing the winding up of the gym, said its collapse came amid an increase in insolvency enquiries from businesses and creditors.

“We’ve noticed an upswing in the last three weeks I suppose - just in the level of enquiry and I know some of the other firms have noticed an upswing in the level of enquiry as well,” he said.

“I think the building industry’s got some problems, the wine industry we know has got big problems with China.

“In the building industry the lack of materials is one thing, a lack of tradies is another, but there’s a whole series of things that are probably an endemic issue in the industry at the moment.”