Australia's FY2026 corporate insolvency figures are in, and for the first time in years the headline moved the other way.
14,152 companies entered external administration for the first time in FY2026 — down about 3.9% on FY2025's 14,722. After several years of steep increases, that's the first annual fall. Modest, but a genuine turn in the numbers.
Before anyone calls the top, though, the total is hiding the more interesting shift underneath it.
The headline fall came almost entirely from one place: small business restructuring, down around 41% (2,918 to 1,714). But the more telling split is who's driving the appointments. The debtor-driven options directors reach for — restructuring and voluntary administration — both fell, while creditor-driven enforcement (court liquidations and controllerships) climbed. Here's the full split by appointment type:
Appointment type | FY2026 | FY2025 | Change |
--- | --: | --: | --: |
Creditors' voluntary liquidation | 6,386 | 6,164 | +3.6% |
Court appointments | 3,174 | 2,868 | +10.7% |
Small business restructuring | 1,714 | 2,918 | −41.3% |
Controller & receiver appointments | 1,443 | 1,231 | +17.2% |
Voluntary administration | 1,435 | 1,540 | −6.8% |
Scheme administrator | 0 | 1 | — |
Total | 14,152 | 14,722 | −3.9% |
So the story of FY26 isn't "fewer insolvencies." It's directors reaching for the restructuring path less often, while creditors — the ATO chief among them — push harder through the courts.
A word on SBRs. I remain a strong believer. For an eligible small business with a viable core, it's still one of the best tools we have: fast, low-cost, and it keeps the business trading with the director in control. The FY26 drop isn't a verdict on the tool — to my mind it's underutilisation, plain and simple. Too many viable businesses leave it too late, or never look at it at all. If you're an advisor with a client under pressure, it's a conversation worth having early, not at the end.
On the ATO: no sign of easing. The lift in court liquidations and creditor-driven action lines up with a tax office that has kept its foot firmly on enforcement and isn't relenting.
Where does it go from here? Honestly, the FY26 easing doesn't match what I'm seeing on the ground. Conditions feel tougher now than they did across the year just gone, with more uncertainty in the mix — and I'd expect that to push appointments back up through the year ahead. The slight dip looks to me more like a pause than a turn.