Chief Executive’s review

It is my pleasure to present to you AFSA’s 2017–18 annual report. This marks my first full year as Chief Executive and Inspector-General in Bankruptcy.

This annual report demonstrates how we have delivered strongly against our goals and towards the achievement of our purpose. I will touch here on a few highlights, but the report itself tells the fuller story of our activities over the year.

AFSA has a broad reach, with diverse and yet complementary functions, from personal insolvency to personal property securities, proceeds of crime, and regulation and enforcement. As a whole, these functions contribute to stronger consumer protection and to the health of Australia’s economy. For this reason, I have decided to provide a review of our whole business, incorporating into one the two separate reviews from the Chief Executive and Inspector-General in Bankruptcy, and from the Registrar of Personal Property Securities, that we had provided in past annual reports. However, as in past years, the Registrar’s report on the operation of the Personal Property Securities Act 2009 (PPS Act) is incorporated here and elsewhere in this annual report.

The Personal Property Securities Register (PPSR) continues to be an important tool for managing financial risk and facilitating economic activity and we have continued our focus on developing additional tools and resources for the business sector – particularly for small to medium-sized enterprises (SMEs). We work closely with stakeholders and industry bodies as we develop resources, including case studies and industry-specific information on our website.

We know that SMEs are time poor and our approach has focused on partnering with trusted advisors who support small business – such as accountants and other organisations that provide guidance. We also collaborate with other government agencies to help share important information about the PPSR.

However, there is more to be done to build awareness of the PPSR and assist those who struggle with the complexity of the PPS Act, the terminology and the register.

One of the things that struck me early on is that the personal insolvency system is required to meet a number of objectives for a range of users and stakeholders. It has an economic imperative but it is also an expression of social justice. We must be sensitive to the needs and expectations of clients who are experiencing unmanageable debt, creditors who are owed money and registered practitioners who work with both. We must also be mindful of the community’s expectations that the system is fair and one in which they can have confidence.

One of the key challenges for AFSA is to do what we can to ensure that people in financial hardship have access to the right information, at the right time, so they can make an informed decision that is most appropriate for their circumstances. This includes information on the range of options that may be available and provided by trustworthy advisors, who put the client’s interests ahead of their own.

Research we’ve commissioned indicates that most debtors rely on online research when looking for information around their options. During the year, we adopted strategies such as greater use of Google search ads to give AFSA’s information products a higher presence when people look online for information to deal with unmanageable debt – and greater use of plain English to make our information easier to understand.

Last year’s annual report flagged that we would be introducing an online debt agreement process and I’m pleased to say that we launched this in January this year. The move to a fully digitised service provides benefits to our clients and also provides us with more sophisticated data to help us monitor compliance – ensuring debtors and creditors are managed fairly within this part of the personal insolvency system.

Debt agreements continue to be a popular option under the Bankruptcy Act, with a 9.1 per cent increase in 2017–18, compared to the previous year.

Our personal insolvency statistics continue to be valued and contribute to commentary on the state of our economy – in small regional communities and at the state/territory and national level. Our data is used by others to develop predictive statistical models that can inform policy and financial decision-making.

Our 2017–18 statistical release showed that personal insolvency has been on the rise for the third consecutive year.

Readers familiar with our business will know that AFSA has a risk-based, data-driven approach to regulation – and, in fact, to our business overall. We’re committed to minimising red tape and making it as easy as possible for users to comply with their obligations. For example, over the last 12 months, we’ve used data to help us identify emerging activities that have the potential to undermine confidence in the personal insolvency system and worked to disrupt these activities at a much earlier stage. You’ll find highlights of our work in this area in the annual performance statement in this report.

I take the view that compliance is a shared responsibility – AFSA has a defined role but so too do clients, debtors, creditors, practitioners and representative bodies. In fact, I would encourage any member of the public to report behaviour that seems fraudulent or inappropriate, to ensure that the system operates as intended and delivers benefits to the economy as a whole. We can’t act on information we’re not aware of.

Part of my role is to ensure we strike the right balance between the competing interests of everyone who uses and works within our systems.

While people who need to use our services might not necessarily think about compliance or what they need to do to comply, their compliance is important to the effective and efficient operation of the whole system.

If a client doesn’t comply – apart from those who deliberately seek to misuse the system for their own interests – it’s possible that the process we’ve asked them to follow has contributed to the noncompliance.

This is one of the reasons AFSA has been working on a client-centred approach to the design and redesign of services. The disruptive nature of this approach can be challenging, but the benefits to the users of our services are clear.

Our delivery of new online services and enhancements to existing services is aimed at improving the experience of clients when they interact with us, making our services more efficient and giving us greater capacity to identify and monitor trends in options such as debt agreement applications.

This is an approach that we’ve used successfully with the PPSR – using our established PPSR stakeholder forums with key users to help us co-design enhancements to the register, such as a refresh of the motor vehicle search function and making search functions more intuitive. We publish our enhancement schedule for the PPSR and our completed enhancements on our website.

Stakeholder engagement and involvement is also critical in our PPSR compliance model and we are working with industry to develop additional key resources for PPSR users and stakeholders. I expect to have more to say about this in the coming year.

We also work with our stakeholders to address shared industry issues of concern. For example, we are working with the Australian Restructuring Insolvency and Turnaround Association and the Australian Securities and Investments Commission on the issue of gender disparity in the industry.

As an organisation, we continue to operate in a commercially sound way, which is particularly important for a cost-recovered agency. Earlier this year, we reviewed our PPSR fees to ensure they’re appropriate to meet the cost of delivering our services. This review resulted in us introducing reduced fees, with support from our stakeholders and with the Attorney-General’s agreement.

Some might think that it’s unusual to be reducing fees; however, to me that demonstrates the very responsible approach we take to being cost-effective and efficient – and being transparent in the process.

In closing, I want to say that I’m very proud of our staff – they’re competent, capable and committed. We are well underway with implementation of our People Strategy 2020 and in the last 12 months we’ve focused on delivering a new approach to performance management, a health and wellbeing strategy, a more sophisticated approach to recruitment, and expanded learning and development opportunities across the board. We’re also putting a strong focus on workplace flexibility – enabling men and women to truly balance work and personal life in a more purposeful way.

We are currently finalising a gender equality strategy to assist women in AFSA to achieve success in both their personal and professional lives. This strategy is based on seeking views from women at all levels across AFSA to identify barriers they face at each stage of their career trajectories.

Hamish McCormick
Chief Executive and Inspector-General in Bankruptcy

The year at a glance


David Johnson, AFSA’s Chief Information Officer, spoke about delivering consumer-centricity while achieving cost savings through ICT at the Australian Digital Government Summit held in Sydney.

The Australian Digital Government Summit provides leading national and international case studies exploring best implementation practices for an organisation-wide digital strategy and accompanying framework.

August We welcomed Hamish McCormick as our new Chief Executive and Inspector-General in Bankruptcy.
September We commenced the second – and final – tranche of reforms introduced by the Insolvency Law Reform Act 2016. The reforms aim to increase efficiency, reduce administration costs and promote market competition in personal and corporate insolvency in Australia. These reforms support a greater level of consistency and standards across both systems.
October We launched our Reconciliation Action Plan 2017–2020 articulating our reconciliation vision, which revolves around creating conditions to ensure that Aboriginal and Torres Strait Islander people’s interactions and engagements within the personal insolvency and personal property securities fields are fair and fully effective.
November At the seventh Annual Workforce Planning for the Public Sector Summit, AFSA presented a case study on our three-tiered approach to implementing workforce planning and embedding an evidence-based workforce decision-making culture.
December We released our Personal Insolvency Practitioners Compliance Report 2016–17. The report details our achievements against our Insolvency Practitioner Compliance Program, and includes significant regulatory and enforcement outcomes accomplished in the public interest. In addition, the report outlines the performance of private practitioners during the year.
January Human Resources Director Australia magazine recognised our People and Capability team by awarding them a coveted place on its Innovative HR Teams 2018 list. The award recognises organisations with HR teams who are thinking outside the box, driving industry change and using innovative methods that deliver value and benefit to their workforce.
February We expanded our online service capabilities, with the release of debt agreements online. The new online portal allows registered debt agreement administrators and creditors to log on, fill out and lodge all of their debt agreement forms online. It creates a more effective debt agreement service, and reduces the overall time it takes our clients to complete these activities.
March We launched our partnership with CPA Australia and entry into their Recognised Employer Program. This initiative acknowledges organisations that are committed to providing their employees with the highest standard in professional development. Our relationship with CPA Australia has been key in developing and supporting our staff who are already certified practising accountants, as well as those who are currently studying or thinking about formal study in this field. Through this relationship, our staff have access to a simple method to demonstrate their continuing professional development, as well as access to a range of professional resources and networks.
April Members of our executive team visited our Perth and Adelaide sites to meet with local registered trustees, registered debt agreement administrators and financial counsellors. All stakeholders provided insights into a range of high-level AFSA functions, which we found immensely valuable. Issues raised during the meetings related to our regulatory work, risks to the personal insolvency industry, and implications of proposed law reforms.
May We hosted a stall and participated in the Financial Counselling Australia national conference. Representatives from various areas within AFSA engaged with financial counsellors, learning about their areas of concern, answering technical questions, and discussing different ways we can improve our services to them and their clients.
June We participated in the annual iAwards, facilitated and hosted by the Australian Information Industry Association. In their 25th year, the iAwards celebrate innovation within the ICT industry. AFSA was nominated as an ACT finalist in the hotly contested public sector category with an entry titled ‘Digitial@AFSA’. Digital@AFSA covered our service digitisation and business process efficiencies delivered via the debt agreements online project.

Outlook for 2018–19

In 2018–19, we will continue to work towards becoming a world-class government regulator and service provider. We will reflect on our approach to compliance to ensure we enhance our reputation as an effective regulator who is firm but fair. We will seek to maintain productive relationships with those in the sector, but we must also protect our independence and take a strong stance on those activities or behaviours we will not tolerate.

In the year ahead, we will seek further opportunities to make compliance easier and simpler for those who use and rely on the system. Our approach includes making access to our services simple and easier to comply with. We will then have more capacity to focus on those who are deliberately not complying, or who intend to use the system for their own interests.

Our Insolvency Compliance Program 2018–19 sets out our priority areas of regulatory focus for the coming year. We publish this annual compliance program to make very clear to everyone the obligations or requirements that we’re concerned about. This makes it easier for those who are doing the right thing and it should be a warning to those who are not.

In 2018–19, we will focus on practitioner remuneration, effective administration, compliance with law reforms, and ensuring that practitioners provide full, accurate and timely information to enable those experiencing unmanageable debt to make informed decisions. We will also be looking at compliance by debtors and creditors.

The coming year will see a continued focus on further improvements to our services, as we want them to be clear, simple and easy to use. We will be launching a special website to make it easier for users to provide feedback on our services and products. This will enable us to test ideas while we’re planning and designing new services and improvements.

We will continue to work with the Attorney-General’s Department on key reforms to the Bankruptcy Act 1966, including proposed changes to the default period of bankruptcy, contained in a Bill introduced to parliament in October 2017, and a raft of proposed reforms representing the most significant update to the debt agreement system since 2007.

These reforms will involve significant changes that will impact on AFSA, practitioners and key stakeholders in the personal insolvency system. We are well positioned to implement legislative changes and to assist others to do so.

We will continue our program of work to deliver information products on the Personal Property Securities Register (PPSR) to meet industry needs. Our end-to-end stakeholder engagement with PPSR users and representative bodies is integral to this work.

In 2018–19, we will also continue to focus on raising awareness activities and support for consumers and small to medium-sized enterprises to understand and use the PPSR.

We will shortly release our Corporate Plan 2018–19, which outlines our focus for the next four years – the strategies we will use to achieve our purpose and how we will measure our success.

The corporate plan lets consumers, business, the community and our people know of our medium-term direction and business approach and is central to planning our future work.

We’ve commenced a review of the statement of affairs form, which is an essential part of the bankruptcy process. Our aim is to provide an improved experience for those who need to complete the form and those who rely on the form’s contents to administer the bankruptcy estate.

We are confident that we can deliver a much-improved service by making the form easier to understand and complete, and reducing duplicated or unnecessary questions. We will be sharing a revised statement of affairs form for comment in August 2018.

We also know the importance of financial literacy, which requires a combination of knowledge, skills and action, supported by a range of stakeholders – including AFSA. Thus, in the coming year we will be looking to do even more in this field, including by developing approaches to get the right information to those who need it, at the right time, and in a format that is easy to understand and use.

We welcome the review of the Australian Public Service announced in May 2018, and we look forward to the opportunity this will provide to further reflect on how we work, to ensure we keep pace with public expectations.

In closing, we look forward to the coming year and to the challenges and opportunities it will bring to further deliver on our mission – facilitating improved and equitable financial outcomes for consumers, business and the community through excellence in service delivery.

Agency overview


The Australian Financial Security Authority is a dynamic organisation that facilitates improved and equitable financial outcomes for consumers, business and the community through excellence in service delivery.


AFSA is an executive agency in the Attorney-General’s portfolio. We manage the application of bankruptcy and personal property securities laws through the delivery of high-quality personal insolvency and trustee services, personal property securities services, and through regulation and enforcement.

By delivering these services, and by providing regulation and enforcement, we create an environment in which businesses and the community can assess financial risk and make informed financial decisions. We also assist the Australian economy by providing an orderly means to manage personal insolvency proceedings.

Insolvency and trustee services

We offer unique and specific expertise in personal insolvency and trustee services that the community, the business sector and government rely on.

Our strong industry experience in the administration of insolvent estates upholds the integrity of the personal insolvency system.

We deliver value to creditors by exercising our powers in a commercially sound way.

Our collaborative approach, depth of industry-specific knowledge and strong stakeholder relationships inform our trustee services.

Our expertise in personal insolvency and trustee services enables us to provide a range of comprehensive and integrated services. We:

  • act as trustee for personal insolvency administrations
  • act as trustee pursuant to court orders, particularly under the proceeds of crime legislation
  • act as special trustee for government
  • provide practical information about options to deal with unmanageable debt
  • preserve the security and integrity of a large volume of personal insolvency records through the operation of a national register.

Personal property securities

We use our expertise in combining industry knowledge, legal and financial acumen, technology and a client-centred approach to support the operation of the personal property securities system in Australia.

This expertise also enables us to deliver innovative solutions in response to the needs of our clients and stakeholders.

Our working knowledge of personal property securities law and experience in making informed administrative decisions fosters confidence in the personal property securities system and supports financial risk management and access to finance within the economy.

Our skills in working collaboratively with private-sector service providers facilitate the development of market-driven and industry-specific software that streamlines business and community access and promotes efficiency, effectiveness and a high level of register usability.

Our data management expertise supports this work and strengthens the integrity of our data holdings.

Through our specific expertise in personal property securities, we deliver a range of services. We:

  • make administrative decisions to resolve disputes between secured parties and grantors
  • exercise discretion in response to applications made under the Personal Property Securities Act 2009 (PPS Act)
  • operate a national register of security interests for personal property – the Personal Property Securities Register (PPSR)
  • provide sector-specific information to assist clients to effectively use the PPSR
  • preserve the security and integrity of a large volume of economically significant registration data.

Regulation and enforcement

We have significant expertise in regulation and enforcement of the personal insolvency and personal property securities systems, supported by our close, ongoing engagement with business and industry.

We are proactive in managing a wide variety of issues that have the potential to undermine public confidence in these systems.

By being proactive, we effectively respond to issues in a balanced manner and deliver our highly regarded risk-based practitioner inspection program.

We continue to review our regulatory practices and procedures in support of the government’s deregulation agenda and we have developed an AFSA Regulator Performance Framework.

In regulation and enforcement, our key roles are to:

  • regulate personal insolvency practitioners
  • investigate alleged Bankruptcy Act and PPS Act offences and, where appropriate, refer for prosecution.

This all combines to create an efficient and effective regulatory environment that preserves the integrity of the personal insolvency and personal property securities systems.


We are responsible for administering the following Acts, and associated regulations and rules, which provide a legislative framework for our functions and services:

  • the Bankruptcy Act 1966
  • the Bankruptcy (Estate Charges) Act 1997
  • the Personal Property Securities Act 2009.

We also administer property in accordance with orders made under the Proceeds of Crime Act 2002 and other Commonwealth legislation.

Administrations under the Bankruptcy Act are Part IV – bankruptcies, Part IX – debt agreements, Part X – personal insolvency agreements, and Part XI – deceased estates.


We fulfil each of the following roles created by the Bankruptcy Act:

  • Inspector-General in Bankruptcy – Our Chief Executive is also appointed as the Inspector-General in Bankruptcy. The Inspector-General is responsible for the general administration of the Bankruptcy Act and has powers to regulate bankruptcy trustees and debt agreement administrators, review decisions of trustees and investigate allegations of offences under the Bankruptcy Act.
  • Official Receiver – On behalf of the Official Receiver, we operate a public bankruptcy registry service with compliance and coercive powers to assist bankruptcy trustees to discharge their responsibilities.
  • Official Trustee in Bankruptcy – A body corporate created under the Bankruptcy Act, the Official Trustee in Bankruptcy administers bankruptcies and other personal insolvency arrangements when a private trustee or other administrator is not appointed. We provide personnel and resources to ensure that the Official Trustee can fulfil its responsibilities. The Official Trustee also has responsibilities under the Proceeds of Crime Act 2002, the Proceeds of Crime Act 1987, the Mutual Assistance in Criminal Matters Act 1987, the Crimes Act 1914 and the Customs Act 1901 to control and deal with property under court orders made under those statutes.

The PPS Act creates the role of:

  • Registrar of Personal Property Securities – The Registrar maintains the PPSR in compliance with the PPS Act and associated regulations. This includes responsibility for ensuring that the register is operational and accessible. The Registrar has various powers in relation to the PPSR, such as refusing access to the PPSR or suspending its operation in certain circumstances; removing or reinstating data on the PPSR; and conducting investigations into matters for the purpose of performing his or her functions.

Our clients

We have a broad range of clients, including:

  • people using our services, such as those who owe money and are considering, or currently using, one of the options provided by the Bankruptcy Act
  • organisations or people who are owed money and who are considering taking action against a debtor or who are currently involved in a bankruptcy case
  • people who transact on the PPSR, such as finance providers, businesses, consumers, legal practitioners, accountants, business advisers and government agencies
  • practitioners and industry professionals, such as registered trustees, registered debt agreement administrators, financial counsellors, accountants and legal practitioners.

Our stakeholders

Our service delivery is informed and supported by close engagement with our stakeholders, including other government agencies, professional associations and industry and peak bodies, and through our international relationships.

We consider better practice through close engagement with key service delivery partners and international associations.

Locally, we work with agencies including the Australian Securities and Investments Commission, law enforcement agencies, the Commonwealth Director of Public Prosecutions, the Federal Circuit Court and the Federal Court. The professional associations we work with include Financial Counselling Australia, the Australian Restructuring Insolvency and Turnaround Association, the Personal Insolvency Professionals Association and the Association of Independent Insolvency Practitioners.

We work closely with the New Zealand Ministry of Business, Innovation and Employment under a memorandum of understanding. By building this and other international relationships, we support regional development, inform better practice and facilitate cross-border enforcement.

Organisational structure

Our senior executive is led by the Chief Executive. The Chief Executive is directly assisted by:

  • the Deputy Chief Executive and Chief Operating Officer
  • the National Manager, Client Services
  • the Chief Information Officer
  • the Chief Finance Officer and National Manager, Finance, People and Capability
  • the National Manager, Insolvency and Trustee Services
  • the National Manager, Regulation and Enforcement
  • the General Counsel, Legal and Governance.

The areas of responsibility of our senior executive are shown in Figure 1 and discussed under ‘Groups and divisions’ on page 17.

Figure 1: Senior executive, at 30 June 2018

Groups and divisions

The Chief Operating Officer Group coordinates and delivers key business-enabling services, including executive support, communications, financial management, information and communications technology, human resource management, security, contract and property management, and client contact services. The group has three divisions:

  • The Client Services division provides a range of services including statistics, stakeholder communication and engagement, and frontline service delivery for insolvency and PPSR enquiries, information and transactions. It works to streamline services through process innovation, informed by the needs of our clients. The division also supports senior executive decision-making by driving strategic priorities through performance planning and reporting, overseeing risk management and building robust governance processes.
  • The ICT Services division delivers and supports business-enabling technology solutions and services for staff and clients. Insolvency services, proceeds of crime and the PPSR systems comprise our main technology solutions, along with a range of corporate applications, a business intelligence capability, and support services for the Client Services and Regulation and Enforcement divisions. The division’s other responsibilities include delivering and managing robust infrastructure platforms, providing help desk services and strategic technical advice, and delivering an enterprise architecture capability.
  • The Finance, People and Capability division ensures our current and future financial sustainability and manages our workforce through our strategic direction for human capital management, learning and development programs, recruitment processes and workplace relations. The management of AFSA’s property, security and corporate support is a further responsibility of this division.

The Insolvency and Trustee Services division provides information to debtors on options to deal with unmanageable debt, and assesses and registers bankruptcy, debt agreement and personal insolvency agreement applications from debtors and registered court-ordered insolvency administrations. It issues bankruptcy notices on the application of creditors, and exercises the statutory powers of the Official Receiver to obtain information and recover monies on the application of trustees administering insolvent estates.

The division also maintains the National Personal Insolvency Index, and handles pre-bankruptcy, most post-bankruptcy and general enquiries. In addition, it ensures that debt agreement proposals comply with the law and conducts the voting process with creditors in relation to debt agreements.

Insolvency and Trustee Services also conducts preliminary enquiries that identify matters to be investigated for recovery of assets and possible offences. As the Official Trustee, it acts as special trustee for government agencies pursuant to court orders and administers personal insolvencies where no registered trustee has been appointed.

The Regulation and Enforcement division operates independently of other functional roles, discharging the regulatory and review responsibilities of the Inspector-General in Bankruptcy under the Bankruptcy Act. The enforcement function is responsible for investigating all alleged offences under the Bankruptcy Act and preparing briefs for prosecution by the Commonwealth Director of Public Prosecutions.

The Legal and Governance division provides legal advice and support to all areas of our operations. In addition to providing specialist advice on bankruptcy, personal property securities and proceeds of crime legislation, the division advises on administrative law, contracts and other matters relevant to our corporate governance. The division also supports agency assurance through administration of the internal audit, corporate quality, information governance, and business continuity functions.

Outcome and program structure

Figure 2 shows our outcome and program structure for 2017–18.

Figure 2: Outcome and program structure, 2017–18