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Rise in administrators called for traders

Steven Deare
·1-min read

The number of administrators being called to save battling businesses rose by more than 23 per cent in December, ahead of special pandemic protections lapsing.

There were 376 instances of administrators being called, which included creditors and courts winding up businesses, and others entering receivership, according to ASIC data.

The federal government relieved directors of personal liability for trading while insolvent and raised thresholds for creditor demands for six months to December 31 last year.

It said it wanted to reduce the chance of these threats unnecessarily forcing businesses to wind up.

CreditorWatch chief executive Patrick Coghlan said most of the businesses having administrators called were in retail, hospitality, tourism and education.

He said there would be a steady increase in administrators being called.

"We expect the number to grow as more directors get back from holidays to their desk and say `we have to do this now'," Mr Coghlan said.

"There will be more creditor-initiated windups and administrators being called going forward."

The removal of government support programs such as JobKeeper could add to stress for business.

Yet Mr Coghlan said the figures were much lower than industry expectations early in the pandemic.