One of Australia’s leading bankruptcy, restructuring and insolvency experts is warning that Perth, Western Australia, is looming as the new ‘ground zero’ for Australia’s financial crisis.
Taylor David is an Australian law firm specialising in financial services, serving SMEs, large corporations, and government entities. It is an internationally recognised leader in restructuring, bankruptcy annulments and insolvencies.
Partner Scott Taylor said the confluence of rising interest rates and inflation, cost of living pressures, a stuttering economy, lower dividends and the sell off of the share market had combined to create an ‘epicentre of anxiety’ in WA’s capital.
Perth is known for its cyclical economy, and the warning signs are there that market conditions have materially changed,” Mr Taylor said.
“Murmurs of impending financial distress are now being echoed along St Georges Terrace, quite openly. People are now openly discussing their dire financial situations, a departure from the typically discrete nature of such matters. Intimate details about personal financial affairs are being shared, as many find themselves in similar positions of struggle.”
According to ASIC, the following is a representation of the cyclical nature of economic boom and bust periods in WA. The figures show the number of companies entering external administration and controller appointments:
2000 to 2007 – From 302 to 548 at peak – Increased by 81%
2008 to 2014 – From 291 to 712 at peak – Increased by 245% – GFC
2014 to 2021 – From 676 to 1013 at peak – Increased by 50%
2022 to 2028 – Unknown but the signs are alarming
Mr Taylor said the sudden halt in the booming finance and broking sectors had left many professionals in a state of disbelief. These industries, once thriving, are in the slow lane, forcing individuals to face lifestyle changes they are not accustomed to. Compounding the issue, several tax debts from the previous prosperous period have only recently become due, intensifying the financial crunch.
“Company directors, particularly those in finance and capital markets in Perth, have been hit hard by hefty tax bills. It is crucial for individuals to proactively prepare themselves for the challenges ahead and seek guidance on how to navigate these treacherous waters.
“Perth experiences downturns in a significant way every five or six years. However, this impending crisis is projected to be deeper than previous ones. We have access to a wealth of data that underscores the severity of the situation.”
Recognising the pressing need for assistance, Taylor emphasised the importance of exploring available options and implementing subjective solutions tailored to each individual’s circumstances.
He added: “During these challenging times, we work closely with distressed debt financiers who possess the expertise to provide finance arrangements that can assist individuals in getting rid of legacy debt and freeing up breathing space. Contrary to popular belief, these arrangements don’t necessarily come with the high interest rates people often associate with such solutions.”
“Our practical experience in working with financiers enables us to offer hope and demonstrate how we have successfully transformed dire situations in the past. Based on that hope, we guide individuals toward a brighter financial future.”
“As the economic challenges continue to mount in Perth, it becomes crucial for individuals to take proactive measures to mitigate the impact. Seeking professional advice and exploring restructuring options can offer a lifeline during these tumultuous times.”