Australia’s personal insolvency levels have fallen to their lowest point since the late 1980s, but a modest rise is anticipated in 2025–26, according to the Australian Financial Security Authority (AFSA). Chief executive Tim Beresford outlined the outlook in a national webinar hosted by the Australian Finance Industry Association (AFIA), noting any increase was likely to remain well below the decade average.
Beresford attributed the sustained lows to stronger creditor engagement in the wake of the Hayne Royal Commission, more proactive debtor behaviour through and after the pandemic, and a tight labour market that has kept unemployment down.
He also pointed to four shifts reshaping the credit landscape. The unsecured credit market has contracted significantly even as newer products such as buy now, pay later have expanded, adding to overall risk. Personal insolvency cases are increasingly concentrated among renters with fewer assets, leaving them more exposed to shocks. The traditional connection between corporate collapses and personal insolvencies has loosened amid strong employment conditions. And while business-related personal insolvencies account for a smaller share of cases, they carry most of the system’s liabilities.
Beresford said AFSA’s regulatory approach is centred on making processes simpler for users, supporting vulnerable people, and taking firm action against misuse. He cited recent court outcomes and trustee interventions as evidence of the agency’s willingness to enforce standards to protect the system’s integrity.
Issuing a call for shared vigilance across the sector, he urged credit providers and participants to act as stewards of the system: “If you see something, say something”. He said collaboration between regulators and industry was essential to preserve access to finance, underpin business formation and growth, and lift productivity.
AFSA has published details of the address on its website.
