The corporate watchdog will release its third review of the small business restructuring (SBR) regime next month, as insolvencies remain elevated across Australia, while rising in retail.
The upcoming report will examine how the SBR process has operated from its commencement in 2021 up to June 30, 2026. It will cover changes in the outcomes of SBR appointments over that period, and take a longer-term view of how companies that went through the process have survived. It follows ASIC’s two earlier reviews, REP 756 and REP 810.
Andrew Leigh, Assistant Minister for Productivity, Competition, Charities and Treasury, told Ragtrader the review could feed into changes to the regime.
“[It] will look at whether it needs to be changed, including whether the $1 million liability cap needs to be increased,” Leigh said.
The SBR process, introduced in 2021, gives eligible small businesses with liabilities under $1 million a faster and cheaper alternative to voluntary administration. Directors remain in control while a restructuring practitioner helps them put a plan to creditors.
Leigh said ASIC’s previous review found the process was delivering on its objectives, which were reducing insolvency costs and complexity, and supporting viable small businesses to survive.
That report analysed all 3,388 SBR appointments in its review period and 1,260 finalised plans. It found that 93 per cent of companies whose plan was fulfilled by March 31, 2025 remained registered at the end of April 2025.
The report also found the median value of admissible creditor claims between 2022 and 2024 was $359,082, and an average of $427,593.
The median number of creditors is two, with an average of 4.2.
“In 87 per cent of the finalised plans, unsecured creditors were owed between $0 and $800,000, which is well within the $1 million eligibility requirement,” the report added.
Less than 1 per cent of the small business restructures had claims above $1 million. Just 4 per cent of the insolvencies measured in the report were retail companies.
For larger fashion businesses, which sit well above the cap, voluntary administration remains the main path, ahead of safe harbour. Last month, Cue & Co, the business behind Cue and Veronika Maine, entered voluntary administration, with BDO’s Duncan Clubb and Shaun Mckinnon appointed as administrators and FTI Consulting’s Kate Warwick and Vaughan Strawbridge appointed as receivers and managers. Creditor meeting notes reported by the AFR showed Cue & Co owed about $55 million.
The biggest collapse in recent years was Mosaic Brands, owner of Rivers, Katies, Noni B and Millers, which fell in 2024, and has later been wound up. The brands and assets were sold off during the administration process.
There have also been smaller labels such as Proud Poppy Clothing, which appointed Hall Chadwick as administrators in August. Proud Poppy has since returned to operations following a creditor vote.
The latest ASIC data shows total first-time insolvencies peaking at 1,808 across all industries in August 2026. That is up 49.1 per cent on the previous month, and up 65.9 per cent on August 2025.
Retail trade is seeing first-time insolvencies trend up in recent years. In the September quarter this year, retail insolvencies hit 220, which is up by 8 on last year. This number is provisional given this ASIC data is run two weeks in arrears.
For all of FY26 to the end of June, first-time retail insolvencies hit 1,006, up by 135 on FY25, and nearly double the amount in FY23. When it comes to appointment type, creditors’ voluntary liquidation is the most used insolvency appointment.
Leigh said the overall insolvency rate remains below its long-term average, with retail trade accounting for about 7 per cent of insolvencies, behind construction and accommodation and food services.
He said the Productivity Commission’s business dynamism inquiry – set to be released next year – will also look at whether voluntary administration and DOCA processes can help viable businesses restructure earlier.
The inquiry has been tasked with evaluating whether the design, operation and integrity of corporate and personal insolvency frameworks are barriers to business dynamism.
“We haven’t had a good analysis of our insolvency regime … from the Productivity Commission in quite a while,” Leigh said.
“This is seeking to be that review and to look at whether the system can be made better, so it still has the appropriate protections for creditors, but gets us more economic productivity in the economy.”