Corporate insolvencies in the Northern Territory have been declining, but firms may still face uncertainty in the months ahead as the government winds down most, if not all, of its relief measures designed to help businesses in dire financial conditions brought on by the COVID-19 pandemic.

Since the pandemic started, fewer companies filed for any form of insolvency administration in the Northern Territory, in keeping with trends across the rest of Australia.

Dissolve, an insolvency specialist firm, saw a 49 per cent decrease in corporate insolvencies in Australia in the 12 months to May 2021 compared to a year earlier.

The Northern Territory had a 68 per cent reduction in insolvencies, the biggest among all states, until May 2021 and compared to the average over the last five years, it said.

More than 30 companies are in administration, liquidation, or have already received a notice for winding up from June to December this year. Twenty firms are currently in liquidation, including some in the service industry, while eight are under administration, mostly mining companies. Three have filed winding up applications, including the Gold Valley Group, a Perth-based mining and energy company.

The Federal Government had put in place 80 temporary regulatory measures from March through December last year designed to prevent companies from going under, including an increase in debt threshold through which creditors could initiate insolvency proceedings to wind up companies, among other measures.

This year, the government reformed its insolvency laws, which simplifies the restructuring and liquidation process for small companies to prevent them from going to the wall during a crisis such as a global pandemic.

Such government relief measures, including the $90 billion JobKeeper wage subsidy, resulted in 40 per cent lower insolvencies than pre covid levels, based on government figures.

In March 2020, the Gunner Government announced a $65 million rescue package to keep jobs and help stimulate the economy.

This winding down of relief measures could impact companies heavily reliant on them, leading to a possible spike in insolvencies as these firms would no longer have aid to depend on.

Across Australia, the reported number of defaults have already spiked by 53 per cent in November, indicating a not so comfortable post lockdown for small to medium-sized businesses, according to credit reporting agency Credit watch.

Meanwhile, Credit Watch puts the Northern Territory’s default risk rating at 5.6 per cent.

The survival rate of companies in the Territory has also been declining from 77.8 per cent in June 2019 to 64.8 per cent in the same period this year, based on Australian Bureau of Statistics data.

Atradius, a trade credit insurer, is expecting global insolvencies to increase by the end of 2022 when the companies supported by the government Covid-measures would no longer have access to them.

Just over 90 per cent of Australians are double vaccinated. Once the government begins to scale back its emergency funding program, individual states and territories would have to shoulder the cost of the lockdowns they impose, the feds have stated.