The Australian bankruptcy trustee and regulator AFSA has started to release fortnightly statistics on personal insolvencies in Australia[1] to assist in monitoring the economic and social impact of COVID-19, and the recent bankruptcy law changes made in response to the crisis.
This is a commendable and prompt contribution which will inform any needed law and policy changes as the situation develops.
I suggest that all jurisdictions might usefully gather and monitor and publish relevant, and if possible, comparable statistics.
These are the initial general figures provided, as I read them.
- Between 24 February and 8 March 2020, 830 people entered into a new personal insolvency in Australia. These included 206 people in business.
- In the following fortnight, 9 to 22 March, this increased to 887 people. Those in business[2] increased to 230, mostly in construction.
- Where it could be identified, the most common industry of the whole group was health care and social assistance.
- These early fortnightly numbers of 830 and 887 compare with an average of 844 people entering into a new personal insolvency per fortnight between 1 July 2019 and 22 March 2020.
While these statistics have necessarily just commenced, and are too early for extraction of any trends, AFSA says they will develop further.
Importantly, in relation to the temporary changes to bankruptcy law introduced in Australia on 25 March 2020 by its ‘Omnibus Act 2020’, AFSA says it will expand its statistics to include a breakdown of voluntary bankruptcies by debtor’s petition and ‘involuntary’ court sequestration orders, and of the temporary debt protection procedures, each impacted by that Omnibus Act.
AFSA says it will continue to review its statistics releases to provide as up-to-date information as possible and it welcomes input. It will also continue to issue its regular statistical releases.
AFSA’s full explanation of its work and its statistics contact details are here.
Internationally
There has already been extensive international communication and exchange of information on how various jurisdictions are attempting to address the impact of the crisis on their local insolvencies. See in particular the work of Professor Aurelio Gurrea-Martínez of Singapore Management University in his Working Paper 2/2020, Insolvency Law in Times of COVID-19. AFSA’s efforts may provide a prompt for all jurisdictions to gather and monitor and publish relevant, and if possible, comparable statistics.
[1] Bankruptcies, debt agreements and personal insolvency agreements.
[2] AFSA says its business-related personal insolvency statistics include people who have traded as a sole trader, including as a contractor, sub-contractor or similar, or been involved in a partnership, and/or been a director/secretary or held a management role in a company.
