We think the 'flip-flopping' has come to an end.
Last month the Australian Financial Security Authority (AFSA) released the September quarter personal insolvency activity statistics.
An analysis of these statistics for the Sept 2015 quarter compared to the June 2015 quarter shows:
- Total personal insolvency activity increased by 8.1%.
- Bankruptcy increased by 4.1%.
- Debt agreements increased by 15%.
- Personal insolvency agreements decreased by 15.4%.
An analysis of the statistics for the Sept 2015 quarter compared to the Sept 2014 quarter shows:
- Total personal insolvency activity increased by 0.6%.
- All states except for ACT, TAS, NSW, and SA experienced an increase in total personal insolvency activity.
- Bankruptcies decreased by 0.1%.
- Personal insolvency agreements decreased by 33.3%.
- Debt agreements increased by 2.4%.
The following table represents a quarterly analysis for the past two years when comparing to the prior quarter.
To summarise, when comparing the Sept quarter to the June quarter, total personal insolvency, bankruptcies and debt agreements all increased while personal insolvency agreements decreased.
Readers of our quarterly statistics will realise that again this is a flip-flop of the numbers when compared to the previous quarter.
|
| Bankruptcy | Debt Agreements | PIA's | Total |
| Quarter | % change | % change | %change | % change |
| Jun-13 | 7.9 | -1.3 | 12.5 | 4.9 |
| Sep-13 | -3.6 | 4.9 | -23.6 | -1.1 |
| Dec-13 | -2.5 | 5.3 | 9.1 | 0.1 |
| Mar-14 | 1.8 | 3.4 | -25.0 | 2.2 |
| Jun-14 | -21.8 | 11.2 | 6.7 | -10.1 |
| Sep-14 | 13.8 | 1.0 | 37.5 | 8.5 |
| Dec-14 | -4.8 | -11.8 | -18.2 | -7.7 |
| Mar-15 | 4.8 | -3.3 | -22.2 | 1.5 |
| Jun- 15 | -3.7 | 4.3 | 23.8 | -0.6 |
| Sept-15 | 8.1 | 15 | 8.3 | 8.1 |
To recap, in March 2015 we had an increase in total personal insolvency activity and bankruptcy, with a decrease in debt agreements and personal insolvency agreements. Yet in June 2015 we had exactly the opposite— total personal insolvency activity and bankruptcy decreased and debt agreements and personal insolvency agreements increased. And now the September quarter shows an increase in personal insolvency activity and bankruptcy numbers and a decrease in personal insolvency agreements. That is, three quarters where those numbers have reversed themselves! The difference in this quarter is that debt agreements continued to rise to record levels.
This supports our comments in our July 'On The Pulse' whereby we stated there was a lot of uncertainty out there. We also made the comment that we expected that personal insolvency activity and bankruptcy numbers would increase during the September 2015 quarter, which they did. So, we finally got one right!
So what's our forecast for the next quarter?
We are of the view that the 'flip flopping' has come to an end. We think the total personal insolvency activity, bankruptcy, debt agreements and personal insolvency numbers will all increase over the next quarter. In the last four to six weeks, we have noticed an increase in enquiries and we think the next quarter's statistics will support this.
For the detailed breakdown of AFSA’s statistics and accompanying commentary, visit AFSA's website: https://www.afsa.gov.au/resources/media-kit/media-archive/media-release-personal-insolvencies-rise-0.6-in-the-september-quarter
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