Nearly 7000 businesses collapse as insolvencies surge, hitting food and construction hardest
A record wave of business collapses in NSW, with thousands of closures in just 11 months, has prompted urgent calls for government action. Scroll out interactive list.
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Exclusive: The number of businesses shutting their doors has reached a historic high, as almost 7000 businesses across NSW became insolvent in the past 11 months.
The latest ASIC insolvency data reveals 1000 businesses in the accommodation and food services sector – mostly cafes and restaurants – have shut their doors, while 1879 construction companies also collapsed between July 1, 2024 and May 25, 2025.
The data showed insolvencies in NSW increased by 26 per cent in the same time period from 5375 to 6789.
NSW also had the most insolvencies compared to other states, with Victoria recording 5168, Queensland (3264), Western Australia (1217) and South Australia (815).
In areas such as Crows Nest and St Leonards in Sydney’s lower North Shore, many popular cafes have been forced to shut-up shop in recent months including Mayflower and Organica, among several others.
Business NSW chief executive Daniel Hunter said: “Small business owners tell us they’re at breaking point.”
“They’re being squeezed by rising insurance and energy costs, endless red tape, soaring workers’ comp premiums, and persistent labour shortages,” he said.
“Passing the workers’ compensation reforms through NSW parliament next week is one step that will ease the pressure.”
Mr Hunter said: “The Emergency Services Levy adds about 24 per cent to your average business insurance premium. If the NSW Government were to accelerate that reform, it would undoubtedly rescue many businesses from insolvency.”
Charlie Kelly, owner of Bartiga in Double Bay, said state government incentives would be greatly welcomed by the hospitality industry
“My business is going well but it is a tough time at the moment for other businesses in the area as people are holding out on eating out due to the current state of the economy,” he said.
“Business owners are trying their best to offer incentives … I’ve just launched a Wine Wednesday, where there’s half price on wines by the glass.
“But it would be great to have good government incentives such as an entertainment rebate, where people could take business clients out and receive a rebate.”
Urban Taskforce chief executive Tom Forrest said the rapid rise in the cost of construction had sent many builders “to the wall” as they struggled to fit fixed price contracts into the changed working environment.
“Labour costs shot up due to shortages and Labor was far too slow to place construction workers on the list of critical workforce shortages,” he said.
Mr Forrest said the state government could immediately make the sector more profitable by easing the impact of infrastructure fees and affordable housing contributions.
“A rescue package is much needed to return profitability to the building and construction sector.”
A spokesman for Small Business Minister Janelle Saffin said many small businesses across Sydney were facing challenges, especially due to high input costs across the board.
“Small Businesses have had some relief as interest rates and inflation have come down, but small businesses right across NSW have had to work really hard for the last two years in the toughest inflationary environment we have seen since the 1980s,” he said.
“Before coming into government, we made a promise to establish the Service NSW Business Bureau to streamline government support and advice for small businesses – and we delivered it in 2023.”
But Opposition Small Business spokesman Tim James said the sharp rise in business closures across NSW was deeply concerning and a clear signal of distress.
“Insurance premiums have surged over 90 per cent of NSW small businesses reported increases last year, with one in four facing hikes of more than 30 per cent,” he said.
Mr James said: “The Minns Labor government continues to offer Band-Aid or no solutions while failing to address the structural cost pressures driving businesses to the wall.”
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Originally published as Nearly 7000 businesses collapse as insolvencies surge, hitting food and construction hardest
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