Whilst interest rates in Australia are at historic lows and we remain in relatively good financial shape when compared to other Western Economies, what lies beneath needs to be understood.
During the calendar years 2010, 2011 and 2012 we have seen corporate insolvency levels across Australia increase on average at almost 4.5% per annum. Further, many SMEs are also reported continued periods of reduced or static profits.
Interestingly, household debt levels also remain at near historical highs, despite some media commentary to the contrary. Will this lead to an increase in personal insolvencies in Australia? In Western Sydney, for example, Bankruptcy and other forms of personal insolvency including Part IX arrangements are at a record.
Many family owned businesses are finding their bankers increasingly difficult to deal with .Some business owners have reported that they have been asked to find another bank despite having a long term and successful relationship with their existing financial institution. Is this really the banks concern regarding the financial health of these businesses or simply an example of the banks focus on their own credit rating?
It is clear that some industries are facing particular challenges in the current environment. Accordingly at Jones Partners, we are commissioning a definitive report on the state of the Australian Economy from an insolvency perspective.The report will be the first of its kind and seek to set a new narrative amongst lenders and professional advisers and the business community generally in relation to insolvency trends and the economic outlook.
This report will address;
* Historical personal and corporate insolvency trends
* Reasons for major company liquidations, receiverships, and voluntary administrations
* Trends in Bankruptcies and Personal Insolvency Agreements
* Industries at risk
For more information, click here or visit www.jonespartners.net.au
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