The Australian Financial Security Authority (AFSA) publishes annual reports on bankruptcy and insolvency in Australia. Each financial year, the report is released detailing the number of bankruptcies and insolvencies for that year.
The AFSA takes data collection very seriously, and provisional personal insolvency statistics are sourced from debtors and creditors, added to the database once forms have been lodged.
Provisional personal insolvency statistics come from both state and territory levels, before finally being added to the national database.
Let’s take a look at a few of the highlights from the 2015 report, followed by some deeper analysis of each area.
Main Highlights from the 2015 Report
It would be interesting to note that in 2015, the total number of personal insolvencies dropped 4.2%, in relation to its numbers from the year before.
For example, this is contributed to:
- A 1.9% increase in debt agreements
- A drop of 7.7% for bankruptcies; and,
- An increase of 2.9% for personal insolvency agreements
Equally as important is the number of bankruptcies across Australia, which reached a 10+ year low. In South Australia, they recorded their record lowest level of bankruptcies, with all states (apart from NSW, VIC and Tasmania) setting records for their highest number of debt agreements in 2015.
What the Statistics Say About Personal Insolvencies
There was a record low 28,288 personal insolvencies in 2015, which is largely due to a significant drop in states such as:
- New South Wales (-9.0%)
- Queensland (-3.7%)
- Victoria (-3.6%); and,
- Tasmania (-6.4%)
This decrease in personal insolvencies can be attributed to a rising number in states/territories including South Australia (1.5%), ACT (4.0%), Western Australia (6.3%) and Northern Territory with a whopping 26.1% increase in personal insolvencies in 2015.
Since 2015, the total number of personal insolvencies in Australia has fallen each year compared to the previous.
What the Statistics Say About Bankruptcies
In 2015, there were 17,163 bankruptcies across Australia. This is in contrast to 2014, when there were 18,601 – a drop of 7.7%.
Importantly, 2015 had the lowest number of bankruptcies in all of Australia since 1995. There were decreases in bankruptcies in NSW, Queensland, Victoria, Tasmania, South Australia and the ACT; however increases in bankruptcies hit Western Australia (3.5%) and the Northern Territory (19.3%).
Like personal insolvencies, bankruptcies have already decreased, with a record fall each year since 2011.
What the Statistics Say About Debt Agreements
Debt agreements have increased nationally since 2012. And in 2015, this was no different, with the following states and territories recording debt agreement rises:
- Queensland (1.7%)
- South Australia (6.6%)
- ACT (8.5%)
- Victoria (4.6%)
- Western Australia (10.8%); and,
- Northern Territory (31.8%)
What we can gather from this data is that although the number of bankruptcies are falling at record speeds, debt agreements are increasing highlighting the importance and emphasis of financial education and debt management.
As both businesses and consumers continue taking out loans, getting credit cards and building their businesses, the following years will be instrumental in determining whether or not they can continue to afford the repayments.
For more information on personal insolvency, check out our personal insolvency page here.