Border closures are the biggest concern for Australian business

The other major pressures, according to the survey, will be recruiting (34 per cent and supply chain issues (32 per cent).

 “While the turnaround and insolvency tsunami did not arrive as anticipated this year, concern around the impact of COVID-19 on Australian businesses has not abated, it has evolved,” said Maria O’Brien, president of the TMA Australia and head of the restructuring and insolvency practice at Baker McKenzie.
 
“Re-opening state and international borders is crucial to protecting businesses of all sizes.”

The survey also found traditional pressures causing distress, such as availability of cash and rising cost bases, appear to be secondary pressures.
 
“Access to cash is not presenting a challenge to Australian businesses right now. This is likely to be due to the success of government stimulus and availability of funding options which have been better over the last 12 months,” said Chris Martin, partner at KordaMentha.
 
The rate of insolvency that was expected in last year’s survey, did not occur at the rate predicted and despite the end of JobKeeper and ongoing lockdowns, monthly external administrations remained approximately 50 per cent lower than pre-COVID-19 levels in 2021.
 
“Most turnaround professionals credited government stimulus and financier support with holding back the wave of external administrations this year, with other factors identified being rent and other moratoria, ATO relief, low interest rates, a lack of creditor action, cyclical and structural changes to the restructuring market. However, they are anticipating a rise in demand for turnaround and insolvency services and advisory once vaccination targets are reached across the country,” Ms O’Brien said.
 
The KordaMentha - TMA Australia annual survey collects key insights and opinions from a diverse range of stakeholders in the Australian turnaround industry on the current economic and business environment in Australia, as well as the outlook ahead.
 
Questions in the survey are based on the topics of Australia’s turnaround environment, the impact of COVID-19 on businesses, government and financer support for businesses, and insolvency law reforms to support Australia’s economic recovery.