Mackay and North Queensland have been hit particularly hard as a result of mining operations being scaled back, and the drop of commodity prices in coal and iron ore. According to the latest unemployment rates, the Mackay region unemployment rate sits at 9.1% for April 2015, higher than Queensland’s overall unemployment rate of 6.6%. The north and central state’s worst fears are being realised as hundreds of jobs are lost and once profitable operations are closed down. This has caused many people to relocate from Mackay to other regions, leaving hundreds of business and residential properties vacant, driving the property market downwards and eroding equity. Many mining service operators who invested in rapid expansion during the boom have been left with crippling debts and high rents.
There are also other financial pressures at play:
- The ATO is stepping up recovery action against directors and individuals who are defaulting on taxes and failing to lodge returns. Last week alone, there were 143 winding up applications filed in the Federal Court by the ATO Australia-wide. This combined with simple debt recovery action, garnishees and director penalty notices is putting the squeeze on struggling business in the region.
- Recovery action by the liquidators of Timbercorp and Bendigo Bank (Great Southern) is also causing hardship with many investors seeking the refuge of bankruptcy or Part X because of an inability to repay those debts.
In an effort to encourage economic growth and employment, the Queensland Government is seeking global interest in exploration for gas and petroleum resources, with 11,000 square kilometres being released for expressions of interest. The release of land for exploration will hopefully result in long term development projects and reduce Queensland’s unemployment and personal insolvency rates.
AFSA have recently issued its national March quarter 2015 results, with the Northern Queensland region in particular recording a high number of personal insolvencies for this period. Mackay recorded 77 bankruptcies for the March 15 quarter, number 3 on the list behind Townsville (98) and a section of South East Qld stretching from Movie World to the Yatala Brewery (86).
Tough times indeed!
If you would like more advice on how SV Partners can assist your clients with ATO, Great Southern or Timbercorp claims in the central and north Qld region, please call Frank O’Neill on 07 4953 4060, or alternatively, call one of our experts on 1800 246 801.