There is not much to report from the latest personal insolvency figures, save for continued small increases over time. It seems unlikely that personal insolvencies will quite reach the predicted 12,250 for the 2023-24 year, let alone the long-term average of 23,100.
Whether the numbers are ‘soaring’ or ‘surging’ is a matter of interpretation.
The detail
That is, the January-March 2024 quarter saw 2,981 new personal insolvencies, up by 487 from 2,494 in March 2023, and 2,215 in March 2022.
While AFSA reports that just over a quarter (758) of these were business-related, up from 573 in the March 2023 quarter, given that debt agreements have limited application in a business context (61 business related of 1,074, ie 5%), the better analysis is that 37% of bankruptcies (680 of 1,814) were business related, and 50% of Part X agreements (15 of 30). Personal insolvencies up in March quarter 2024 | Australian Financial Security Authority (afsa.gov.au)
Debtors from the construction and health care industries continue to predominate.
The April 2024 total of 1,046 compares with March 2024’s 980 and April 2023’s 769.
Context
Whether these numbers are ‘soaring’ or ‘surging’ is a matter of interpretation.
As AFSA has earlier reported, personal insolvency volumes remained at historically low levels in the last financial year (9,930 in 2022–23). Despite these 2024 increases, they compare favourably with ‘pre-COVID’, say the March 2019 quarter, when the figure was 6,496, and ten years ago, March 2014, 7,871.
AFSA says it expects these numbers to rise by 23% in 2023-24 to around 12,250. With the year to date total of July 2023-April 2024 being 9,743, it is unlikely that the last two months will exceed 2,507 to meet that prediction but it will be close.
AFSA also predicts a further rise of 20% in 2024-25 to around 14,750, but still well below the long-term average of 23,100.
