New data compiled by CommSec shows that personal insolvencies have perversely experienced record falls, despite the sharpest economic contraction since the Great Depression:
The total number of personal insolvencies hit 24½-year lows of 4,239 in the June quarter (lowest since the December quarter 2005). In fact, insolvencies fell by 35.1 per cent in June from a year ago – the sharpest annual contraction since records began in the September quarter 1987. On a rolling annual basis, insolvencies totalled 20,762 in June, down 23.3 per cent over the year – also the biggest annual decline on record. And it’s a similar story for personal bankruptcies which hit record lows of 2,205, down 30.4 per cent in the June quarter to be down 42.4 per cent when compared with a year ago…
Australia is experiencing its biggest economic contraction since the Great Depression with the jobless rate hitting two-decade highs of 7.4 per cent in June. The contraction is due to government restrictions and business shutdowns to contain the spread of the coronavirus. So one would expect personal bankruptcies and insolvencies to be increasing wouldn’t they? Not so. In fact, data released yesterday and over the past week from the Australian Financial Security Authority (AFSA) shows that the total number of personal insolvencies hit 24½-year lows at 4,239 in June. In fact, insolvencies fell by 35.1 per cent in June from a year ago – the sharpest annual contraction since records began in the September quarter 1987…
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
