Mr Gammon said triggers for insolvencies included the ATO ramping up debt collection, inflationary pressures, and jitters around the election.
In a recent poll of registered liquidators and bankruptcy trustee members, Insolvency Australia found that most believe there will be a rise in insolvency starting around tax time and then again later in the year after interest rate hikes and inflation have truly set in.
Insolvency Australia member Bob Jacobs, head of Auxilium Partners, said: “The first to fall are businesses which are no longer viable due to social changes post-COVID, or intrinsic financial instability deferred by COVID.
“Major reasons for that are: firstly, government support during COVID put many unviable companies into a holding pattern. And secondly, the special pandemic laws that prevented insolvency are no longer in force – meaning the ATO and creditors can collect outstanding debts.”
Nick Cooper, managing partner of Oracle Insolvency Services and another Insolvency Australia member, agreed that some industries were more likely than others to suffer as a result.
“The sectors most under pressure include hospitality, due to likely restrictions on consumer discretionary spending, and building and construction, due to labour shortages and an increase in costs on fixed-price contracts,” he said.