iscover 
More than 6,000 assistance cases were delivered by the helpline in the 12 months to 31 December 2025, representing a 21 per cent increase on the previous year and highlighting the sustained strain facing the SME sector.
Across its lifetime, the helpline has supported 18,500 cases, with debt to the Australian Tax Office (ATO) accounting for 64 per cent – the most common debt type.
“We assisted clients with an excess of $429 million in debts to ATO and the median ATO debt size was $70k,” said Helen Davis, general manager of the Small Business Debt Helpline.
“We are hearing from small-business owners who are under enormous pressure and often carrying that burden alone.”
ATO data analysed by financial analysis company CreditorWatch shows business tax defaults began spiking in October 2023, with more than 30,000 defaults in effect as of January 2026.
Of those, more than 17,000 were sole traders, and more than 10,000 were proprietary companies.
Matt Erwin, finance specialist and director of Cashman Consulting, said he has observed a clear shift in the ATO’s approach, with enforcement activity intensifying after a period of leniency throughout the pandemic.
“We’re in a regime where it was very soft for a long time and even before COVID the collections were slow and inconsistent,” Erwin said and spoke on a recent podcast on Broker Daily sister brand The Adviser.
“And now we’re in a phase with the government whereby collections are quite hard. Compliance is very important, lodging on time. So that puts a lot of pressure on directors and financial controllers and chief financial officers to put things in, get it to their accountant and get it lodged. There’s a lot more director penalty notices coming out.
“It’s fair enough, people have to pay their taxes, but it’s ramped up quite considerably in the last couple of years and we’re seeing that in the insolvency results, in regard to the number of small business restructurings, with voluntary administrations and even, unfortunately, liquidations or the closing of businesses as well.”
Annual insolvencies are also now running higher than at any point in the past decade, according to Australian Securities and Investments Commission (ASIC) data analysed by CreditorWatch.
Almost 0.8 per cent of businesses entered insolvency in January 2026, compared to around 0.3 per cent in March 2021 and 0.5 per cent in June 2018.
Tackling pressure
Erwin said that while many business owners initially seek help for a single pressing issue, often an ATO debt or enforcement action, a deeper review of their financials frequently reveals more entrenched structural weaknesses.
“Often the catalyst is very specific,” he said and explained that a statutory demand or tax debt notice is usually just the trigger that forces action.
“But when you look at their business holistically, you can see why they are where they are.”
He noted that many have layered multiple lending facilities over time, compounding pressure, and that addressing the immediate creditor demand is only part of the solution.
“Sometimes they need to take a step back and think, how do I repay these creditors? How do I manage my situation?” he said and added that sustainable recovery requires resolving both the acute stress point and the broader financial position of the business.
[Related: Over one-third of SME customers used a broker in the last 12 months]