A Parliamentary dust-up over small business insolvencies is set to enter its third day, as Shadow Small Business Minister Tim Wilson challenges government counterpart Anne Aly over her claim that “dodgy” businesses are among those facing collapse.
Insolvency rates first came to the fore on Friday when Wilson asked the House of Representatives to consider if government spending is causing higher interest rates and putting extra strain on small business borrowers.
Wilson claimed business conditions have materially worsened under the Albanese government, leading to nearly 42,000 businesses “going bust” since the 2022 federal election.
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“Maybe they were dodgy,” Aly replied.
Wilson said Aly’s “dodgy” comment was a “disgrace” and “nothing short of contempt” for small business owners.
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Insolvencies in focus
Not all insolvencies are the result of improper behaviour.
Rising borrowing costs, inflation, global trade tensions, and changing consumer habits can all force principled owners to call time on their business.
However, court-ordered wind-ups — which occur when directors breach obligations to secured creditors or fall foul of the tax office — are on the rise.
The Australian Securities & Investments Commission states there were 1,753 court-ordered appointments in the financial year to January 18, compared to 1,470 in the prior corresponding period.
Aly defends government record
In the Lower House, Aly responded to Wilson by suggesting the Opposition was not championing small business causes in good faith.
“They don’t care about small business,” said Aly.
“They want to pretend that they care. They want to stand here and confect outrage, and they want to bang on the table and talk about small business.”
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Wilson was “correct” to say corporate insolvencies have increased over the past 12 months, Aly said.
But she argued the number of collapses as a proportion of total companies is currently lower than the long-term average, suggesting resilience in the business sector.
“And if [Wilson] doesn’t know how to read statistics, there’s a ‘Statistics 101’ course that he can take,” added Aly.
The Minister said she would take steps to correct the record, but the “dodgy” comment remains on the official Parliamentary record at time of writing.
Wilson’s push for apology
The fracas continued on Monday, when Wilson proposed a parliamentary motion that would cause Aly to apologise to the “thousands of small business owners and their staff whom she slandered.”
“To say to people who have saved and sacrificed to get themselves into a position to support themselves — who have done the hard work and are making sure they can employ millions of Australians — ‘maybe they’re dodgy’ shows a shocking level of contempt from this government and this minister in response to the importance of small business,” said Wilson.
Liberal MP Leon Rebello jumped to his defence, declaring the growing number of business collapses is “not because of their own doings”.
“I don’t believe it’s because small businesses are dodgy,” he said.
“I believe it’s because we’ve got a government that is not creating the economic conditions to allow its citizens to thrive, to take risks, to back their judgment and to support growth.”
Labor MP Matt Gregg defended the Albanese government’s record, pointing to competition reforms and red-tape reduction pledges designed to benefit small businesses.
Not all businesses that enter administration fail, Gregg added, noting the surging uptake of the small business restructuring scheme.
Time to debate Wilson’s apology motion expired on Monday afternoon, with the item now listed on Tuesday’s notice paper.
Aly voiced her empathy for small businesses doing it tough in a statement provided to SmartCompany on Tuesday.
“As someone who has both owned and operated small businesses, I understand how rewarding it can be to run your own business – but I also know how hard it can be,” she said.
More than 26,000 small businesses have been established each month since the Albanese government was elected, she added, in a “clear sign of ambition, resilience, and belief in the future.”
