Western Sydney is bearing the brunt of weak consumer spending, with local businesses closing at the highest percentage of the country.
Despite the bright rhetoric of the Albanese Labour Government regarding Australia’s recent economic performance, the figure tells the story of Bleeker.
Creditor closure rates are currently “above the pre-Covid level.”
In group data, the default for invoice payments rose 42% in March 2025 compared to a year ago.
The abolition of businesses that were temporarily soaked at the end of 2024 increased by 17% in March from the previous year.
Analysts say defaults are often the first sign before major financial pain.
Creditors’ latest business risk indexes confirm that intrusion and import costs pressures continue to erode business sectors, particularly those relying on discretionary spending by consumers.
Almost 10% of restaurants have been closed
The data draws a harsh picture of sectors that rely on household expenditures.
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Six of the seven industries with the highest default rates are based on discretion. The toppings on the list are hospitality, with food and beverage services closing rates of 9.4% until March this year, almost twice the average of 5.3%.
Management support services were followed by closure rates of 6.4%, followed by arts and recreation (6.3%), retail (5.8%), construction (5.7%), and accommodation (5.4%).
Everything is currently operating at or above pre-Covid fault levels.
Rent rises, wages, interest rates, and rising premiums are ejecting balance sheets faster than most people can handle.
Small and medium-sized businesses narrowed the hardest
It is below the peak levels seen between 2002 and 2012, but is trending beyond pre-pandemic benchmarks.
However, small businesses, many of which lack deep cash reserves, have proven particularly vulnerable.
Luke Achterstraat, CEO of the Australian Council (COSBOA), is urging the government to cut the tax rate for companies below $20 million to 25-20%.
“Small businesses are the engine room of the Australian economy and part of our social fabric,” he told the Epoch Times, calling the latest federal budget “overwhelming” and “missed opportunities” to support the sector.
Political battlefields in western Sydney are suffering most
CreditorWatch’s March Business Risk Index also flagged the fast-growing Sydney region, where business closures are the highest.
Six of the top 10 high-risk zones are located in areas that include the Bringelly-Green Valley area.
The area covers Hoxton Park, Lepington and Cecil Hills, and is now being held by workers Ann Stanley.
In contrast, the Norwood-Paynaham-Stopeters area of central Adelaide has the lowest predictive risk at 4.5%.
Other low-risk zones are scattered across Victoria and North Queensland.
Among the capital CBD, Adelaide is leading by the lowest predicted failure rate (5.2%), while Sydney CBD continues to perform at its worst at 6.3%.
Meanwhile, CPA Australia is urging businesses to check their financial health, reduce costs, raise prices wherever possible, switch suppliers and rethink their product offerings.
Group Gavan Ord said companies need to focus on survival rather than growth.
“Through operational efficiency and market diversification, we can minimize risk and seize opportunities,” Ord added.
Political fight for small business voting
With federal elections looming, both major parties have provided some relief to small business voters.
Labour has pledged a $150 energy rebate since 2022 and has promoted a total of $800 relief.
It also plans to invest $900 million through the National Productivity Fund to find ways to cut business regulations and modernize an additional $207 million business register.
Meanwhile, the coalition lends banks to tax cuts and investments in skills.
Opposition leader Peter Dutton has pledged to increase the amortization of instant assets from $1,000 to $30,000, making it permanent.
He also wants to revive the $20,000 deduction on entertainment costs. They want to allow small business owners to charge meal tax credits and interesting guests.
To tackle the skill shortage, the coalition aims to build 400,000 apprentice and trainee jobs, providing $12,000 in support for each employment in a critical industry.
Energy is another focus of conversations with opposition banks about energy plans to lower electricity prices.
