Address by AFSA Chief Executive Tim Beresford to the Committee for Economic Development, Thursday 2 July 2026.
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Acknowledgement of Country
I acknowledge the Traditional Custodians of the land on which we meet today, the Gadigal people of the Eora Nation, and pay my respects to Elders past and present.
My thanks to CEDA and Colin Biggers & Paisley for hosting us, and to everyone joining today.
I want to do three things: outline AFSA’s regulatory priorities for 2026–27, report on our performance against last year’s priorities, and explain the broader regulatory approach that sits behind them.
We are setting these priorities in an environment of moderately rising personal insolvencies.
Personal insolvencies increased by around 10 per cent in the financial year just ended, to about 13,500. We expect a further 13 per cent increase this financial year, to around 15,250.
That remains well below the 37,000 recorded in 2009 following the Global Financial Crisis. Nonetheless the trend is clear: personal insolvencies are rising. Back to the long-term average.
We are also seeing declining financial resilience among debtors in our system. Many have very low asset-to-liability ratios. Many are turning to payday lenders and Buy Now, Pay Later providers to make ends meet. And many are vulnerable to unscrupulous advisers who have little or no social licence.
The wider picture: trust and growth
The flow of credit in any economy depends on trust.
Trust that transactions will be fair. Trust that obligations will be honoured. Trust that, when things go wrong, the system will deal with all parties fairly.
The Global Financial Crisis demonstrated what can happen when trust breaks down.
And in the current climate, none of us should assume that trust in professional services is assured.
My responsibility as a regulator is to maintain trust and confidence in the systems AFSA oversees.
At the same time, the government’s productivity agenda asks regulators to regulate with a growth mindset.
That means tackling misuse without impeding honest participants.
Regulators cannot cover the field. Trying to mitigate every risk is costly, unwieldy and unrealistic. It can also impose unnecessary friction on people and businesses doing the right thing.
AFSA’s regulatory approach is to focus on regulation that is proportionate, purposeful and directed to tangible outcomes.
Our Regulatory Action Statement, which I am releasing today, focuses on the key harms that pose the greatest risk to the integrity of the systems we regulate.
Performance against 2025–26 priorities
Before turning to this year’s priorities, I want to report on the outcomes of last year’s Regulatory Action Statement, which targeted four harms.
The first harm was the manipulation of personal insolvency proposals and creditor meetings to protect wealth.
These include personal insolvency agreements and section 73 composition proposals to creditors to end bankruptcy early. Both have a legitimate place in the system.
They are also a small part of the system. AFSA received fewer than 400 draft proposals last financial year.
But we continue to see concerning behaviour — by debtors and, in some cases, by the registered trustees overseeing the process.
Red flags include very low or unreasonable returns to genuine creditors, the creation of friendly or false creditors, and the manipulation of creditor meetings.
Former Gold Coast lawyer Beau Hartnett offered creditors $16,000 on debts of $4.5 million, a return of just 0.35 cents in the dollar.
Failed publican Jon Adgemis, whose $1.8 billion bankruptcy is the largest since Alan Bond’s, offered even less, 0.15 cents in the dollar.
Following AFSA’s intervention, both men were placed into bankruptcy.
These are not isolated cases.
In 2025–26, we reviewed 278 proposals and escalated 48 for further investigation.
Our findings indicate that registered trustees need to be much more rigorous in managing these processes.
Ten proposals required me to use my statutory powers as Inspector-General, including directing trustees to provide further information to creditors.
In 24 proposals — half of those escalated — we instructed trustees to issue supplementary reports so creditors could make informed decisions.
We are also considering disciplinary action, with show cause notices issued to a number of registered trustees concerning potential non-compliance with statutory and professional obligations.
The message is clear: some individuals are seeking to game the system by manipulating personal insolvency proposals.
In some cases, they are being assisted — either wittingly or unwittingly — by the registered trustee they appointed to manage the process.
Trustees, as officers of the court, are gatekeepers of the system. They must be alert to attempts to undermine it.
Where they fail to step up, AFSA will step in.
The second harm was unauthorised access to trust funds for personal gain.
We had previously seen instances where practitioners paid themselves fees from trust accounts without creditor approval, mixed trust and business accounts to cover business expenses, and siphoned funds held on trust into personal accounts.
Last financial year, we audited the trust accounts of six registered trustees and five registered debt agreement administrators to verify the accuracy of account reconciliations.
In the registered trustee audit, we escalated 24 administrations — 42 per cent of those reviewed — for further investigation.
We found multiple discrepancies. Relevant financial documentation was missing in five administrations. In eight matters, the information disclosed in trustees’ end-of-year reports to AFSA did not match the underlying financial records. In one case, a closing balance was transferred to an unidentified bank account without clear justification.
In the audit of registered debt agreement administrators, all required further information to determine whether their accounting records presented a complete account of the reconciliations undertaken.
Properly managing trust accounts is one of a practitioner’s foremost fiduciary duties.
While many of the issues identified were administrative, they point to the need for stronger processes and greater financial discipline in practitioner reporting.
During the year, we also initiated Federal Court proceedings against former registered trustee Paul Leroy and registered trustee Gavin King.
The third harm was harmful insolvency advice and debt agreements.
The main concern with debt agreements is administrators placing debtors into arrangements they cannot afford.
Last financial year, AFSA assessed more than 6,000 debt agreement proposals. Almost 800 — or 13 per cent — required deeper analysis, including direct engagement with administrators or further assessment of the proposal’s viability.
Separately, we referred one administrator to ASIC for false and misleading advertising.
We also strengthened regulatory collaboration with ASIC, ARITA and major creditors, and deepened our engagement with vulnerable communities and small business.
In a key enforcement outcome, lawyer John Voitin was sentenced to three years’ imprisonment after a joint investigation with the Australian Federal Police into an elaborate scam targeting financially distressed business owners.
The fourth harm was the failure to remove registrations on the Personal Property Securities Register.
The PPSR is a 24/7 national online database of security interests in personal property, including cars, boats, tools, machinery, company assets and intellectual property.
It is a critical part of Australia’s credit infrastructure, with a potential value of around $480 billion — or about 17 per cent of Australia’s GDP.
To maintain the integrity of the PPSR, it must accurately reflect current security interests.
Yet secured parties are often slow to remove inactive or outdated registrations. That can prevent consumers from accessing credit and delay business transactions.
Over the past year, we engaged directly with credit providers to clean up the register.
We contacted more than 120 secured parties, representing over 80 per cent of registrations with no specified end date.
The response has been positive. An additional 200,000 outdated registrations were removed — a significant increase on the previous financial year.
2026–27 regulatory action statement
Our 2025–26 Regulatory Action Statement delivered tangible outcomes. It strengthened the integrity of both the personal insolvency and personal property securities systems.
It also gave us clear, evidence-based insights into where further work is needed.
This year’s Statement focuses on three priority areas:
First, manipulation of personal insolvency proposals.
Second, harmful debt agreements.
Third, strengthening the integrity of the PPSR.
Our review of personal insolvency proposals shows systemic misuse of the process.
Of particular concern is the scale of practitioner complacency and/or neglect in overseeing proposals in a way that is fair to both creditors and debtors.
In some cases, that neglect borders on negligence. Where it does, we will take action.
AFSA will continue to actively monitor practitioner behaviour and intervene where trustees fail to investigate a debtor’s true financial position or provide inadequate reporting to creditors.
We will also call out non-compliant or inappropriate behaviour in creditor meetings, so all parties can engage in good faith.
And I urge the creditor community to engage actively in these processes: ask questions, seek clarity, and raise concerns with AFSA where something does not look right.
Our analysis of debt agreements also points to practitioner standards.
We will scrutinise unaffordable debt agreements and administrators who charge excessive or poorly structured fees.
We expect practitioners to clearly explain the consequences of debt agreements, and to outline available alternatives, including access to free financial counselling.
Debt agreements must not become a conveyor belt into arrangements that debtors cannot sustain.
Outdated registrations will also remain a priority as we continue to strengthen the integrity of the PPSR.
But this year we will broaden our focus to include registrations that are fraudulent, harmful, offensive, poorly structured or contrary to the public interest.
In addition to those three focus areas, we are introducing three enduring priorities.
These are persistent harms that pose serious risks to the integrity of the systems we regulate.
They will remain an ongoing focus for AFSA.
They are:
- Misappropriation of trust funds for personal gain.
- Inappropriate fee practices and unjustified prolonged estate administration.
- And concealment or disposal of assets with the intent to defraud creditors.
These enduring harms will remain an ongoing focus as we work to ensure fair and balanced outcomes across the system.
Conclusion
I often liken my role to that of a referee — a timely analogy during the World Cup.
A referee who constantly blows the whistle slows the game down. Players become frustrated. The flow of the match is lost.
But when the settings are right, most participants experience lighter-touch oversight. The match can move. Honest participants can get on with it.
And those who deliberately seek to game the system face firm action — including, where necessary, a red card.
Many of you know I advocate for collective stewardship.
The systems AFSA oversees work best when all participants play their part: regulators, practitioners, creditors, debtors, financial counsellors, advisers and government.
We welcome your insights on where we can make those systems stronger.
We also expect the entities we regulate to uphold the highest standards of professional conduct and culture.
We look forward to working with you to address the key harms I have outlined today.
Because the system works best when we all work together.
