Personal insolvencies fell to their lowest level since 1996 in the December 2019 quarter, with a total of 5198 people entering bankruptcy or a debt agreement.
Insolvencies were down in all categories - bankruptcies, part IX agreement and part X agreements.
According to the latest Australian Financial Security Authority data, the biggest fall was in Tasmania where personal insolvencies were down by 31 per cent, compared with the December quarter in 2018.
There were falls in all states and territories. Numbers were down 28.5 per cent in Queensland, down 24.6 per cent in South Australia, down 22.1 per cent in New South Wales and down 18.8 per cent in Victoria.
There were 3385 bankruptcies overall, with 24.9 per cent of them business related, and this number is also falling.
AFSA said there were 862 business related bankruptcies in the December quarter, down from 1022 in the June quarter and 862 in the September quarter.
Users of AFSA insolvency are on notice that from the March 2020 quarter there will be a new definition for a business related personal insolvency.
A personal insolvency will be business related if the debtor has operated a business in the last five years, or two years for a debt agreement.
A business is defined as:
- operated as sole trader, including as a contractor, subcontractor or similar;
- been involved in a partnership;
- been a director/secretary in a company;
- held a management role in a company.
AFSA will publish technical notes to explain the changes with statistics for the March quarter.