From the desk of Hamish McCormick – Celebrating our 2019 achievements

As the year draws to a close, I thought I would take this opportunity to reflect on 2019 and talk a bit about the focus for AFSA in 2020.

A firm and fair regulator and a world class government service provider

During 2019 I have spoken about our vision for AFSA to be a firm and fair regulator and a world class government service provider. This shapes the things we do.

We deliver a range of services—and during 2019 we have continued to make more of our services available in an online format. This work has been informed by user feedback. I have been very encouraged by the willingness of users to support us to make our services better, particularly via the AFSAsandpit—our dedicated website helping us to better understand the needs and views of different user groups.

We know that users expect services to be fast, simple and easy to use. One of the key benefits of improving user experience, is that it makes it easier for people to comply with their obligations. With that in mind, our focus during 2020 will be on continuing to redesign our services, as we invest in further digitisation.

From the very beginning of 2020, I am pleased that we will be offering a more streamlined bankruptcy application process as an online service. Getting to that point has involved close engagement with users and stakeholders. Thank you to everyone who has given their time so generously in helping us get to this point.

As a regulator we obviously have a wide remit. I will touch on a couple of areas we have been focusing on: culture and practitioner remuneration. These are two areas of public interest.

Those of you who followed the banking Royal Commission will know that one of the key messages in the report is the relationship between culture and outcomes. For any profession it is good business to have a culture that is respectful, accountable and inclusive—one that builds a high level of trust and confidence in practices and behaviour. It is for that reason we have started to do some specific work in this area to identify key attributes of good culture in relation to the sectors we regulate. We look forward to sharing our findings on that more broadly during the first half of 2020.

Practitioner remuneration is something we monitor closely and it’s a matter that’s often raised with us. As part of our regulatory role, we identify and investigate instances of over-charging and over-servicing, and complete ‘own initiative’ reviews where we consider them appropriate.

Making sure the right balance is struck between the rights of the debtor, the creditor’s interest in getting a return, and the practitioner’s right to be fairly paid for the work they do, is important. Where these competing interests are not in balance, it will inevitably undermine trust and confidence in the system. 

In addition to guidance material we issue on remuneration, we have recently been doing some work to pull together a cross section of information and data that we hold, into a report to inform best practice. We recently sought your views on the draft report via the AFSAsandpit and we look forward to formally launching the report early next year after we have considered your feedback.

Another continued area of focus for us in 2020 will be on improving the tools and information we have to support the small business sector and consumers in relation to the Personal Property Securities Register (PPSR) and the personal insolvency system. We made good progress in this area during 2019, delivering a range of tools for small business, including a revised version of the PPSR business guide. But we recognise there is always more that needs to be done, so we are undertaking market research to provide insights into how we can further improve our services in 2020. We will be looking to hold a further small business roundtable in relation to the PPSR in the first half of next year, to report on outcomes delivered following the last roundtable in December 2018 and to discuss proposed further initiatives.

The changing nature of the personal insolvency system

One of the areas I have been considering over the course of 2019 is the role of the Official Trustee, including what work it takes on and what might be better left to others to administer. This interest is designed to ensure the Official Trustee focuses on matters that serve the public interest, including its role supporting compliance in the broader personal insolvency system.

This has been an important conversation within AFSA. The potential overlap between what the Official Trustee and Registered Trustees manage, should arguably be kept to a minimum. Where there is commercially viable work that AFSA would otherwise take fees to do (under our cost recovery funding model), we have formed the view that subject to creditor approval, that work is best undertaken by the private sector. By doing this we can then ensure that we are able to direct more of our available resources and capability into matters that require close scrutiny through active administration, but that might not otherwise return any fees. Such an approach recognises the unique role of the Official Trustee in preserving confidence in the system as a whole, by ensuring all necessary inquiries are completed over the course of a person’s bankruptcy.

As we look to redirect more work during 2020, I am acutely aware of the importance of doing this in a way that balances the interests of creditors, debtors and practitioners. For that reason we will be working closely with stakeholders to ensure we do this in a way that maintains ongoing confidence in the system.

One of the implications of the above, is that doing less of the commercially viable work will not significantly reduce the overall number of matters the Official Trustee will need to manage. However it will—along with other changes in the personal insolvency system—have revenue implications for AFSA, making us more dependent on the realisation charge. It is therefore timely that we will be reviewing our fees and charges during 2020. We expect to be in a position to consult on the outcome of that review with interested stakeholders in the second half of next year.

I would like to finish by thanking all our stakeholders once again for your commitment in supporting the integrity of both the personal insolvency and personal property securities systems over 2019. I look forward to working with you all as we continue to build confidence in these important systems in 2020.