Business insolvencies on the rise as economic conditions worsen
It was risky business for many in 2024, with a surging number of Tasmanian business insolvencies. See the 30+ names.
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The number of business insolvencies is on the rise in Tasmania with Australian Securities and Investments Commission figures showing a concerning trend.
There were 39 business which entered external administration or has a controller appointed in 2021/22, and 38 in 2022/23.
Those figures jumped to 94 in 2023/24 and there have been 61 insolvencies so far to December 9.
The 39 insolvencies in the September quarter is a recent record.
In its final Tasmanian Weekly Economic Brief for the year, Deloitte noted that business insolvencies have tripled nationally in recent years.
“At the state level they are occurring at over six times the rate we saw back in 2022,” it said
“It’s a small state and a naturally volatile series – we show different rolling averages to demonstrate this.
“But it’s hard not to conclude that Tasmanian canary in the coal mine might not have died of natural causes.”
Rising operating costs, labour shortages and customers spooked by the high cost of living has combined to make 2024 a difficult year for business.
Apex Advisory managing director Tim Booker said Covid-era measures had helped some businesses survive for long than they otherwise might have.
“I think there’s still a bit of pain to be felt in Tasmania yet,” he said.
“We don’t anticipate it’s going to back off any time soon.
“You have all of the underlying factors: construction is definitely taking a fair beating — there’s a few reasons for that.
“New housing starts have taken a hit, although there’s a couple of green shoots coming through now.
“Hospitality has probably dropped into second place, a lot of people start hospitality business with positive encouragement from the mum and a dream.
“You have low barriers to entry and some romantic ideas.”
He said the businesses which were able to demonstrate flexibility to adapt to changing conditions were those which were weathering current conditions the best.
The Tasmanian Chamber of Commerce and Industry’s latest Survey of Business Expectations revealed 80 per cent of Tasmanian business expected conditions to get worse
“Businesses are struggling to keep their heads above water with mounting costs, TCCI CEO Michael Bailey said.
Tasmanian small business casualties of 2024 included Launceston Nightclub Bakers Lane, Burnie accountants Gillett and Associates, tourism operator Wild Drake and Bagdad venue Zelda’s Bar and Bistro.
Popular pizza chain WiseGuise closed regional stores in Burnie and Devonport, saying business conditions were hard.
“Unfortunately due to incredibly tough economic conditions along with the rising costs of running a family business we have had to make this difficult decision,” management told customers on social media.
“Despite all our efforts, recent times have shown a constant decline and while the three original stores continue to perform well, the stores on the coast struggle to remain viable.
Large brands were not immune.
Canadian-based owner Saputo announced King Island Dairy would close by mid-2025 after failing to find a buyer.
And HS Fresh Food, a manufacturer of bagged salads and ready-made meals, entered voluntary administration and was subsequently sold to PMFresh.
Australian Bureau of Statistics figures released in August show Tasmania had 43,427 businesses operating at the beginning of the 2023/24 financial year and 44,033 at the end.
The growth rate of 1.4 per cent was the lowest in the nation and half the national average.
New businesses represented 14 per cent of the total, replacing the 12.1 per cent who stopped trading.
Tasmania’s four-year business survival rate however is 73 per cent although the number of new businesses that made the five year made was 54.6 per cent.
Both survival rates were the highest in the nation.
Tasmanian companies entering voluntary or court-ordered liquidation or having a receiver appointed in the September quarter included:
*FC Five Pty Limited
*Gillett & Associates Pty Ltd
*Gillett Enterprises Tas Pty Ltd
*Jamal Holdings Pty Ltd
*Paisley Park Enterprises Pty Ltd
*Stonehouse Building & Construction Pty Ltd
*Taurus Equity Pty Ltd
*Wild Drake Pty Ltd
*2 Hackett Street Pty Ltd
*All Carpentry (Tas) Pty Ltd
*Amplified Contractors Pty Ltd
*B&S Investments Australia Pty Ltd
*Bakers Lane Pty Ltd
*D’Abruzzo Investments Pty Ltd
*Drink Tasmania Tasting House Pty Ltd
*Elation Futures Pty Ltd
*Endless Encounters Pty Ltd
*Froggy & Terri’s Bar & Bistro Pty Ltd
*Good Food Tasmania Pty Ltd
*Jclars Pty Ltd
*Lancaster Bros Pty Ltd
*Makari Holdings Pty Ltd
*Parremore Pty Ltd
*Purpose Marketing Pty Ltd
*SM & SO Clifford Pty Ltd
*Swan Homes Tasmania Pty Ltd
*That Bath Bomb Shop Pty Ltd
*Tkam Building Pty Ltd
*Zelda’s Bar & Bistro Pty Ltd
*Guang Hui Group Pty Ltd
*Swansea Property Investments Tasmania Pty Ltd
*Anderson Heat Pumps & Electrical Pty Ltd
*Barratt Developments Nr 1 Pty Ltd
*Barratt Joinery Pty Ltd
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