The NSW Coalition has pointed to insolvency data to argue businesses are struggling under Labor, but the same figures show the number of NSW companies collapsing actually fell last year, and the state’s share of the national total has been shrinking for two years running.
The NSW Opposition have claimed more than 5,300 businesses went under in NSW last financial year, accounting for almost 40 per cent of all insolvencies in Australia, and used the figures to renew its push for payroll tax cuts.
Data from the Australian Securities and Investments Commission (ASIC) shows 5,311 NSW companies entered external administration or had a controller appointed for the first time in 2025-26, or 37.9 per cent of the 14,011 recorded nationally. Victoria recorded 4,060 insolvencies and Queensland 2,685.
The statement does not mention that the NSW total was down from 5,692 the year before, a fall of almost 7 per cent, and that NSW’s share of national insolvencies has declined for two years running, from 41.9 per cent in 2023-24. NSW normally has more business insolvencies simply by virtue of being the largest state.
Leader of the NSW Nationals and Shadow Minister for Small Business Gurmesh Singh said businesses must be a priority.
“We cannot stand by and watch thousands of businesses close their doors,” Mr Singh said.
“When businesses succeed, they create more jobs, strengthen communities, and the economy grows.”
“The Liberals and Nationals have a plan to back businesses, help them succeed and return NSW to the top of the pack.”
If elected in March, the Coalition is pledging to create “the most competitive payroll tax regime in Australia”, raising the payroll tax threshold from $1.2 million to $1.5 million, reducing the payroll tax rate from 5.45 per cent to 4.75 per cent for businesses with a total Australian payroll below $10 million, and introducing CPI indexation of payroll tax thresholds to eliminate bracket creep.
Shadow Treasurer Scott Farlow said a Liberals and Nationals government would prioritise policies that back business.
“Under Labor more than 14 businesses a day are having to shut their doors because of higher costs, rising energy bills and taxes,” Mr Farlow said.
“The fact NSW is leading the country in insolvencies is why the Liberals and Nationals plan to cut payroll tax is so critical.”
However, the simplified figures used by Nationals leader Gurmesh Singh and Shadow Treasurer Scott Farlow understate the scale of the problem. The ASIC figures also do not capture unincorporated businesses such as sole traders and partnerships. Business-related personal insolvencies, which include sole traders, rose in the March quarter according to the Australian Financial Security Authority.
Nationally, retail and hospitality appear hardest hit as businesses fall like dominos. Hospitality businesses are closing at a record rate of 9.3 per cent over the past 12 months, with about one in 11 shutting down, according to CreditorWatch’s Business Risk Index. More than 70 per cent of hospitality operators report declining profit margins, with rising costs, staffing shortages and shrinking margins making it one of the highest-risk sectors in the country.
And the majority of these businesses – including most of the companies included in the ASIC data – never pay payroll tax.
Federal Treasurer Jim Chalmers also hit back at the claims, saying more businesses were starting than closing.
“There’ve been 30 times the number of businesses starting up than closing down each day on average under Labor, and insolvency rates are almost half what they were under the Howard Government,” Mr Chalmers said.
“More new businesses were created in June, after the Budget, than in any other month on record.”
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