Thursday, 7 October 2021

Border closures are the biggest concern for Australian business 

Border closures, recruitment and supply chain delays are expected to be the most significant pressures for businesses nationwide in the year ahead, according to the Australian turnaround and restructuring community in the 2021 KordaMentha - TMA Australia Turnaround Survey.
46% of respondents believe border closures will be a significant factor putting pressure on businesses, while 34% expect recruiting will contribute and 32% say supply chain delays will add pressure.
“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. Reopening state and international borders is crucial to protecting businesses of all sizes,” said Maria O’Brien, President of the TMA Australia and head of the Restructuring & Insolvency practice at Baker McKenzie.
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.
Respondents in last year’s survey expected turnaround and insolvency activity to increase in 2021 as restrictions and government stimulus eased. Despite the end of JobKeeper and ongoing lockdowns, monthly external administrations remained approximately 50% 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,” 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.

Media contacts
TMA: Catherine Strong, 0406 759 268, [email protected]
KordaMentha: Renee Taylor, 0418 116 297, [email protected]