By Stephen Johnson, Economics Reporter For Daily Mail Australia
Published: 04:40 GMT, 6 January 2021 | Updated: 04:41 GMT, 6 January 2021
Insolvency rates have plunged despite the steepest economic downturn since the 1930s Great Depression sparking fears JobKeeper is keeping struggling firms on life support.
In November 2020 just 306 firms went into external administration compared with 748 in November 2019 before the first case of Covid came to Australia.Insurance Loans Mortgage Attorney Credit Lawyer
The national tally of insolvencies plunged by 59 per cent during a year that saw the economy sink into a recession for the first time in 29 years.
This occurred as coronavirus business closures caused a record seven plummet in gross domestic product in just three months during the June quarter.
Insolvency rates have plunged despite the steepest economic downturn since the 1930s Great Depression sparking fears JobKeeper is keeping badly-run firms on life support
The Australian Securities and Investments Commission data on insolvencies showed a consistent pattern in the face of economic turmoil.
Veteran accountant Ben Johnston, the director of accounting, taxation and business advisory group Johnston Advisory, said the end of JobKeeper on March 28 would see insolvencies spike again.
'You're getting this artificial money coming through,' he told Daily Mail Australia.
'People have been holding off liquidating because they are entitled to JobKeeper and I think you'll find when their JobKeeper eligibility ends, you'll have this huge spike in insolvency numbers again.'
The Australian Taxation Office has also been more lenient on struggling small