Business Financial Distress Nears COVID Levels as Sole Trader Numbers Rise

The proportion of new employer businesses in the workforce hit a record low in 2025, and more are now at risk of failing than during the pandemic period.

Australian dollar coins and banknotes in Melbourne, Australia on April 4, 2024. AAP Image/Joel Carrett

The volume of businesses struggling to pay their debts in Australia is on track to exceed the heights set during the COVID-19 pandemic, according to two reports on the nation’s economic health.

Up to 13 percent of working-age Australians and 47 percent of secondary school students want to work for themselves or start a business, but that’s not translating into a pipeline of new enterprises, according to the Committee for the Economic Development of Australia (CEDA).