The number of bankruptcies among Australian companies in the 2025 fiscal year (July 2024 to June 2025) has surged by about 50% compared to the previous year. High operating costs, rising living expenses, and crackdowns on unpaid taxes by the Australian Taxation Office (ATO) are cited as reasons for the bankruptcies.
On the 20th, the Australian daily The Australian reported, citing data from the Australian Securities and Investments Commission (ASIC), that the number of bankruptcy filings from July to December last year totaled 7,483 cases, a 47.1% increase compared to 5,088 cases during the same period the previous year.
If this trend continues, the total number of bankruptcies for the entire fiscal year is expected to reach up to 16,000 cases, significantly surpassing the record 11,053 cases in the 2023 fiscal year.
In particular, the food service industry has been severely impacted due to cost burdens such as wage increases, energy costs, food ingredient prices, and liquor tax hikes, along with a decrease in consumer spending.
From July to December last year, bankruptcies in the food service industry reached 1,312 cases, a 70.2% increase compared to 771 cases in the same period the previous year. Additionally, bankruptcies have increased across various sectors including other service industries (up 70.1%) and retail (up 14.2%).
Food Service Industry Crisis and Cost Burdens
Stephen Ferguson, CEO of the Australian Hotels Association (AHA), lamented that the food service industry is struggling as operating costs rise but it is difficult to pass all of these costs onto consumer prices. He said, “You can’t keep raising the price of fried chicken. People might just choose to cook at home instead,” describing the tough environment for the industry.
Ferguson also expressed concern about the potential impact of the recent wildfires in Los Angeles, USA, on the global insurance market, noting that rising insurance premiums could further pressure the food service industry. He stated, “When a major disaster occurs in the global insurance market, it can lead to domestic insurance premium hikes. This would be an additional burden on an already struggling food service industry.”
Construction and Professional Services Also in Crisis
The construction industry remains the sector with the highest number of bankruptcies, with a 29.6% increase in bankruptcies in the second half of last year. Professional services such as legal and medical fields have also shown signs of crisis, with bankruptcies surging by 90%.
Bankruptcy management expert Jarvis Archer pointed out, “The number of bankruptcies in the 2025 fiscal year could reach twice the pre-pandemic average of about 8,000 cases annually,” adding, “Especially since the ATO is largely rejecting requests for interest relief on tax debts, the burden on small and medium-sized enterprises is increasing.” He identified the ATO’s strict tax collection policies as one of the main causes of the rise in bankruptcies.
Major Corporations Including Airlines Also Filing for Bankruptcy
It is also unusual that major corporations have been filing for bankruptcy one after another in this fiscal year. Notable cases include the voluntary administration of regional airline Rex, the liquidation of South Australian dairy producer Beston Global Food Company, and the collapse of Melbourne-based apartment construction company Bensons Property Group.
Experts predict that the upward trend in bankruptcies is likely to continue until mid-2025, when the Reserve Bank of Australia (RBA) is expected to lower the benchmark interest rate.
Jung Dong-chul, Hanho Times Reporter
※This article was written using content provided by Hanho Times (www.hanhotimes.com).
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