Insolvent: Big-name brewer, popular cafe among 180 hard hit businesses

More than 180 Queensland businesses have been declared insolvent since December, including some big names. FULL LIST

Tighter Christmas spending by consumers has further exposed hospitality and retail businesses to tough times just as the taxman takes a tougher stance on tax debts.

Revive Financial partner Jarvis Archer said December was the first month since the start of the pandemic that insolvencies exceeded pre-Covid numbers.

“It seems that consumers haven’t spent as much on their Christmas holidays,” Mr Archer said. “Hospitality and retail businesses may be left without the buffer they need to get through the next few quiet months.”

ASIC data shows 38 companies in Queensland appointed either administrators or liquidators last month, down from 39 in January 2022.

Award-winning independent craft beer brewer Ballistic Beer Company went into voluntary administration last month, a victim of the Covid pandemic and a product recall last year while Piranha Fish Caf at New Farm appointed liquidators after severe staff shortages meant it was not feasible for the eatery to continue operating.

December was a horror month for insolvencies, with 144 Queensland companies hitting the wall, up 157 per cent on the 56 in December 2021.

Revive Financial Partner Jarvis Archer

“There’s a general sense that March to May will prove a very difficult time for business operators,” said Mr Archer. “The best thing business owners can do to weather the storm is manage expenses and cash tightly.”

The Australian Taxation Office’s collectable tax debt has ballooned to almost $45 billion, nearly doubling during the pandemic, prompting it to issue 80,000 warning letters and 18,500 director penalty notices last year.

“The ATO appears to now be returning to more serious action, with an increasing number of court winding up applications being filed,” Mr Archer said.

WCT Advisory managing partner Andrew Weatherley said ASIC statistics for January show new appointments were similar to the same month 12 months ago but well down on December 2022.

“I still expect there will be a steady increase in insolvency appointment numbers in 2023 as the impact of increased interest rates, inflation and energy prices along with staff shortages and increased wages continue to have an impact,” Mr Weatherley said.

“I don’t see those external impacts on businesses disappearing. I noticed creditor filed winding up applications are strong and were still strong in January, which might lead to an increase in appointment numbers in February and March.

“In my experience, the industries representing the highest level of insolvencies will continue to be construction, accommodation and food services and retail trade. They’re the industries where consumer spending and confidence impacts the most and they are where, particularly in small business, a lack of staff and difficulties with supply can have a huge impact on viability.”