BUSINESSES SET TO BE UNDER PRESSURE

While Australia has so far avoided a recession, there have been signs of looming economic decline on the back of the surge in inflation which resulted in the Reserve Bank lifting official interest rates 11 times over the past year.

The impact of those rate rises can take months to affect the economy and slow down activity. Some forecasters are predicting tough times ahead, particularly for businesses.

A report by Jones Partners Insolvency and Restructuring, analysing data from the Australian Financial Security Authority, said while there has been a decline in personal insolvencies in recent years, that could change over the next six months.

Jones Partners highlighted the recent collapse of Australia’s largest frozen food distributor, Scott’s Refrigerated Logistics, as an example of the adverse impact the combination of high inflation, increased costs and labour shortages has on businesses. Among other problems for Scott’s Logistics was the failure of an expensive IT system upgrade which caused an extensive loss of clients and huge costs.

“The business was unable to pass on these increasing costs to consumers and was additionally struggling with tight profit margins from inherited, unprofitable fixed contracts,” Jones Partners said.

“The company entered voluntary administration in late February, and shortly after decided to liquidate.”

Jones Partners noted how the COVID-19 pandemic marked a period of heavy fiscal spending and tax relief from government.

“Businesses with questionable balance sheets were able to persevere, in what was more than two years of suspended economic reality,” Jones Partners said.

“As commercial reality begins to take its course, we must now allow market conditions to dictate the future of Australian businesses once more.”

Jones Partners predicts insolvencies will mount up over the next six months, with businesses most vulnerable being those only able to survive through the pandemic due to stimulus and tax relief and others whose dealings are severely impacted by harsh market conditions due to inflation, supply chain issues and labour shortages.

We hope they are wrong. But if your business is under pressure please reach out to Bell Partners for help. Don’t wait until it’s too late.

THIS PROPERTY PROVIDES THE PERFECT RURAL ESCAPE WITH ALL THE EXTRA LUXURIES OF PARADISE YOU COULD ASK FOR.

Some of the great features this property has to offer: 2 Large open plan living areas with timber look tiles, Modern stone top kitchen with shark nose design soft close doors, stainless steel appliances, large storage and walk in pantry, 1 fire place in the formal lounge and rumpus/games room, 1 fireplace in the open plan kitchen and family area. 4 zoned ducted air, 5 large bedrooms with new carpets, master with en-suite and walk in robe, all with fitted cupboards.

The outdoors is the real show-stopper here with an outdoor entertainment area featuring down lights, fans, access to the garage with toilet and shower, overlooking your inground salt water pool, tennis and combined basketball court, 2.14 hectares of cleared, NOT Flood affected fully fenced land, multiple commercial sized sheds that can hold farming equipment with 3 phase power, separate alarms to the main house, the driveway runs all the way through to the sheds at the rear of the property which is suited to hold truck weight, an 8-car under cover parking space, double remote garage, 3 stables, 6 separate paddocks with water and shelter access. A large dam and bore water irrigation through the entire property, town water, a large solar power system and enviro cycle tank and so much more…

OPEN HOMES & RENTAL PROPERTY GUIDE

Open Homes