![]() ‘Credit managers are saying the average age of debts owed by customers are the lowest in living record. Scott Butler says government assistance, such as a moratorium on insolvent trading, increases to the minimum amount necessary to serve a company, and the time to comply, with a statutory demand, tenants protected from eviction by landlords, and JobKeeper, has left the majority of Australian businesses in a better position than they were pre-COVID. The predicted wave of insolvencies has not eventuated and the economy has held up, largely because of government assistance and the decision by the banks and the Australian Taxation Office ( ATO) to not pursue debt. Partners from our Turnaround & Corporate Renewal group – Scott Butler in Brisbane, Mark Petrucco in Sydney, David Dickens and Katherine Payne in Melbourne, and Hector West in Perth – all agree that the market is currently where they expected it to be, despite the tumultuous events of the past year. ![]() In Victoria, which was subjected to one of the longest and strictest lockdowns in the world, ASIC data showed that 970 companies registered in Victoria had liquidators or administrators appointed in the 2020-21 financial year, compared with 1405 for the previous financial year. However, they are tracking in line with COVID 2020 numbers (429 appointments in May 2020). KPMG Restructuring figures show that insolvency appointments continue to lag well below historic pre-COVID averages with 431 appointments in May 2021. While the health crisis continues to challenge, the economic crisis seems to have been averted, despite the continuing uncertainty of snap lockdowns and state border closures. ![]() For every café, restaurant or hotel that has been decimated, there has been a booming retail or transport business experiencing record profits. Its economic effects have been unequal, creating clear winners and losers. But, not for the first time, COVID-19 has shown us that history is no indicator of how pandemics will behave. Generally, the effects of financial shocks (such as the GFC) are spread evenly. It is a tale of two COVIDs, with stark differences between winners and losers.
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