The Australian Financial Security Authority presented further evidence of the resilience of the Australian economy during the first year of COVID yesterday, reporting that personal insolvencies in the year to June were at their lowest level for more than 10 years.
AFSA said there were 10,621 new personal insolvencies in 2020/21, a fall of 49.6 per cent from 2019/20.
Insolvencies were made up of 6792 bankruptcies (down 46.7 per cent from the previous year) and 3731 debt agreements (down 54.2 per cent).
Insolvencies continued to fall in the June quarter, compared with the June quarter in 2020, despite the winding up of JobKeeper, lenders’ deferral arrangements and other COVID support measures.
In the June quarter, 35.3 per cent of new bankruptcies were business related, compared with 38.1 per cent in the June quarter last year.
The impact of buy now pay later contracts is starting to show up in the AFSA data.
BNPL debt accounted from 1.5 per cent of all finance debts in cases of business related personal insolvencies in the September quarter last year, up from 0.96 per cent in the September quarter 2019.