The Australian Financial Security Authority today released the personal insolvency activity statistics for 2017–18 and the June quarter 2018.
Total personal insolvency activity in Australia: % change compared to the previous year
Personal insolvencies in 2017–18
There were 31,859 new personal insolvencies in Australia in 2017–18. This was an increase of 5.6% compared to 2016–17. Total personal insolvencies have risen for three consecutive years but remain below the record level of 36,539 set in 2009–10.
Debt agreements increased to an annual record of 14,834 in 2017–18, which was a 9.1% increase compared to 2016–17. They have now reached record levels for six consecutive years. There were record levels of debt agreement in all states and territories except Tasmania.
Bankruptcies increased by 3.0% to 16,811 in 2017–18. Despite this increase, they remained below the record level of 27,520 set in 2008–09. Bankruptcies reached a record high of 158 in Northern Territory in 2017–18.
Annual levels of personal insolvency agreements are small compared to the other types of personal insolvency. There were 214 personal insolvency agreements in 2017–18 after an annual fall of 12.3%.
Spotlight on the June quarter 2018
There were 8,177 total personal insolvencies in Australia in the June quarter 2018. This was a rise of 7.4% compared to the June quarter 2017. By type of personal insolvency:
- bankruptcies increased by 13.1%
- debt agreements increased by 1.5%
- personal insolvency agreements decreased by 5.2%.
Total personal insolvencies rose in all states and territories except Victoria, where they fell by 1.0%. They reached record highs in Northern Territory (95 personal insolvencies) and Western Australia (1,046 personal insolvencies).
In the June quarter 2018, 17.6% of new debtors entered a business related personal insolvency. Where we could identify a specific cause:
- economic conditions (363 debtors) was the most common business related cause
- excessive use of credit (2,407 debtors) was the most common non-business related cause.
