Fresh data from the Australian Securities and Investments Commission has revealed that corporate insolvencies have surged by 200 per cent since the Albanese government assumed office in 2022, delivering another blow to the government’s economic credentials.
Insolvency trends since COVID-19
The ASIC data shows that the number of businesses entering insolvency for the first time has climbed from 7,362 in the 2019-20 financial year to 14,722 in 2024-25. During the pandemic, insolvencies dipped sharply to about 4,200 in 2020-21 and 4,912 in 2021-22, but have since rebounded dramatically.
As of April in the 2021-22 financial year, only 3,812 businesses had gone insolvent. By the same point in the 2025-26 financial year, that figure had risen to 11,715—a 207 per cent increase. Over the entire period of the Albanese government, more than 45,000 businesses have entered insolvency for the first time.
Industry breakdown
The construction industry has been the hardest hit, with insolvencies rising from 1,639 in 2021-22 to 4,888 in 2024-25. For four consecutive years, roughly one quarter of all corporate insolvencies have occurred in the construction sector.
The hospitality industry has also suffered severely, experiencing a 280 per cent increase from 850 insolvencies in 2021-22 to 3,257 in 2024-25. The transport sector saw a 285 per cent jump, from 268 to 1,032 over the same period.
Political reaction
Shadow small business minister Jacinta Nampijinpa Price described the figures as “yet another sign” of the Albanese government’s economic mismanagement. “Small businesses have been hit by rising costs, higher interest rates, weaker consumer demand and growing pressure from tax debt recovery,” she told SkyNews.com.au.
“Many operators who survived COVID are now struggling through a prolonged cost-of-living and cost-of-doing-business crisis that shows no sign of easing.” Price emphasised that a small business represents not just a balance sheet but a family and a livelihood, and called for policies that restore confidence, encourage investment and reward aspiration.
Expert analysis
CreditorWatch Chief Economist Ivan Colhoun pointed to interest rates and energy prices as the two biggest drivers of rising insolvencies since COVID. “From 2015 to 2020 interest rates and energy prices came down, growth was pretty good,” he said. “Then you had COVID, and obviously there was huge government support, interest rates went to zero and the ATO was very lenient.”
After the pandemic, these trends reversed: the ATO resumed debt recovery and interest rates rose significantly. However, Colhoun noted that the increase is “not as dramatic” as the raw numbers suggest, given the rapid growth in the number of registered companies. Between December 2013 and December 2019, registered companies rose by 700,000 to 2.74 million. From December 2019 to May 2026, nearly one million new businesses were registered, bringing the total to 3.74 million.
Colhoun also observed that many insolvencies involve sole traders or businesses with fewer than five employees, rather than larger firms. The construction industry continues to grapple with fixed-price contracts and raw material availability, while the surge in new business registrations has diluted the insolvency rate somewhat.
