AFSA Chief Executive speech at the 2026 Equifax webinar

Acknowledgement of Country

I wish to acknowledge the traditional custodians of the lands on which we meet today. I'm speaking to you from Sydney, so I acknowledge the Gadigal people of the Eora Nation, and pay my respect to elders past and present.

Thank you for the opportunity to speak to you about the work we're doing at AFSA to ensure a strong credit system for the Australian community.

Equifax – and, of course, your clients – play an important role in that system. Your combined work supports the flow of credit and contributes to a dynamic economy.

Today I want to touch on what we're seeing in the personal insolvency space and the structural shifts occurring in Australia's credit system.

I'll also look at regulation as a productivity lever and some of the things we're doing – particularly with the Personal Property Securities Register – to support business and productivity growth.

I'm keen to take any questions you have at the end of my presentation.

Personal insolvency trends

This slide gives you an overview of personal insolvency trends over the past 50 years.

As you can see, insolvencies rose steadily from 1974 to a peak of 37,000 in 2009–10 after the GFC.

They've mostly been falling since then.

The biggest drop has occurred in the past 9 years, thanks to 3 key drivers.

First of all, creditors changed their behaviour in the wake of the Hayne Royal Commission in 2017.

The Royal Commission was a wake-up call for the finance industry to change the way it engaged with customers. That call was heeded.

Now, creditors are much more likely to work with debtors when they experience financial difficulty – to seek solutions, offer hardship provisions, and reach a workable compromise.

Next, debtor behaviour changed in the wake of the pandemic. People in financial difficulty are now much more likely to raise these issues with their creditors.

So, we now have much clearer – and more proactive – lines of communication between debtors and creditors.

And, finally, unemployment is lower. Ten years ago, unemployment was between 5% and 6% – but in recent years, it's had a 3 or a 4 in front of it. The latest number is 4.1%.

As a result of these drivers, personal insolvencies have fallen to levels we haven't seen since the late 1980s.

But there are some modest headwinds.

While there has been economic improvement, geopolitical tensions cause much uncertainty and volatility in the world.

Financial resilience is declining. One in 5 debtors has an asset-to-liability ratio below 10%. There's growing vulnerability among people with limited buffers to absorb financial shocks.

And creditor dynamics are shifting, which I'll speak more about shortly.

As a result of these headwinds, we expect personal insolvency volumes to rise moderately this financial year, from 12,250 to over 13,000, driven by stabilising credit conditions and persistent cost-of-living pressures.

But, as you can see, this remains well below historic levels.

Insights into the personal insolvency system

I want to share 4 key insights we're seeing across the Australian personal insolvency and credit systems.

1. The first key shift is a substantial contraction of the unsecured credit market, as large creditors make commercial decisions to reduce their unsecured exposure.

In 2008, personal credit – of which approximately 80% is unsecured – was 14% of GDP. Now it's around 6%.

Now, instead of taking out a personal loan to buy a second car, people turn to secured credit – their redraw facility or offset account. It's a smart choice, a lower cost of finance.

This has allowed product innovation in the unsecured credit market, and new players to enter the market.

Buy now, pay later has become more prominent in the credit system.

A decade ago, about 2% of new debtors entering personal insolvency had a BNPL debt. Now, it's almost half. Among debtors under 29, it's 65%.

While BNPL – with its low transaction values – still makes up just 1% of the personal insolvency system, its contribution is growing.

Other products gaining traction include payday loans and cryptocurrency.

This all adds up to higher risk coming into the system, in two ways – through products with higher risk profiles and operators with only a modest commitment to a social licence to operate.

It poses increased risk to vulnerable debtors, such as the ones we see at AFSA.

2. The second key insight is that the personal insolvency system is not representative of the broader economy.

People entering our system often don't have an established asset base to fall back on when times get tough. They don't own a home or have a mortgage.

In fact, renters make up around 90% of new personal insolvencies. This is at odds with an economy where 31% of Australians rent.

People entering personal insolvency also have relatively little debt.

Forty-five per cent have debts of less than $50,000, compared to the average Australian household debt of more than $300,000.

Fifty thousand dollars. That's the equivalent of a couple of credit cards, a personal loan and a handful of buy now pay later agreements.

In other words, personal insolvencies are largely skewed towards renters with unsecured debts and a low savings or asset base.

These debtors are less able to fortify their finances against external shocks such as the cost-of-living pressures or geopolitical uncertainty.

3. The third observation regards the historic link between corporate and personal insolvencies.

Historically, personal insolvencies have followed trends in corporate insolvencies 9 to 12 months later.

But we're not seeing that link so strongly in the current environment.

ASIC data shows corporate insolvencies grew by 33% in 2024–25, well above the 5% increase in personal insolvencies reported for the same period.

ASIC's numbers need to be seen in the context that as a share of registered companies, corporate insolvencies are at the low end of normal compared with the early 2000s.

Just 0.41% of registered companies entered external administration in 2024–25, compared to a peak of 0.56% in 2011–12.

In other words, corporate insolvencies may be rising, but so are the number of incorporated businesses.

But while corporate insolvencies exceed the pre-COVID-19 average and are indeed at record levels, personal insolvencies have still not trended back to those levels.

As I mentioned before, this highlights the value of a low unemployment rate. The current unemployment rate of 4.1% is well below the historical average of 5.5% pre-COVID.

When people have sufficient work, they're far better equipped to meet their personal financial obligations.

4. My final insight concerns the role of business-related insolvencies in our system.

Personal insolvencies include business-related personal insolvencies involving sole traders and partnerships, which account for about 37% of Australian businesses.

Incorporated businesses go through the ASIC insolvency channel, unincorporated businesses come through ours.

Business-related insolvencies make up almost 29% of overall personal insolvencies – about 3,500 a year.

That proportion has been rising in recent years and is now at its highest point since 2013-14.

In the wake of the COVID-19 economic response, business-related personal insolvencies fell below 25% of the total.

While relatively low in volume, business-related personal insolvencies are high in value, making up almost 80% of our $19.3 billion system liabilities – so just over $15 billion.

This highlights the disproportionate impact of distress among sole traders and small business operators in our system.

Construction has consistently been the most affected industry, accounting for almost a quarter of all business-related personal insolvencies.

This prevalence is perhaps due to the structure of the sector, with subcontractors, small firms and sole traders providing services to larger businesses before full payment is made.

How AFSA is responding

The 4 insights I've just outlined give us a clear understanding of the changing dynamics in our ecosystem.

They enable us to continuously adapt our practices to meet the evolving needs of the Australian economy and community.

By sharing our insights, sharing them with you, we help foster collaboration and, ultimately, better financial regulation.

We believe the system works best when we all work together. When there is collective stewardship of the system.

In speaking engagements like these, no matter the audience, I have one clear message.

I convey it to insolvency practitioners, creditors, financial counsellors, and now to you as financial industry professionals.

You are part of that collective stewardship. You may see things we don't. So, we want to hear from you:

• Where you think the system can be improved.
• Where you're seeing emerging risks in the credit system.
• Where you see system misuse.

I need your eyes and ears. If you see something, say something.

You can speak to me or your preferred AFSA contact, while our website provides further contact details, as well as an online tip-off form.

There are big advantages to collective stewardship across the credit spectrum.

If everyone swims between the flags, if you will, it builds confidence in the system. And there can be lighter touch regulation.

Regulating with a growth mindset

Following the Treasurer's Economic Roundtable in August, the government has put regulation at the centre of its productivity agenda, with a clear challenge to agencies like AFSA to regulate with a growth mindset.

What does that mean exactly? And what role does personal insolvency play in business and economic growth?

In a dynamic economy, businesses enter, expand and exit with relative ease.

A smooth exit process allows capital to shift from weaker uses to stronger ones.

Risk taking is encouraged because failure, when it occurs, is resolved efficiently and fairly.

But when the exit process is slow or overly complex, resources get stuck, confidence falls and dynamism declines.

In that respect, a modern insolvency framework is not just a safety net for failure. It's a productivity enabler, supporting liquidity, investment and entrepreneurial activity.

International evidence bears this out. Economies with efficient insolvency regimes have consistently higher rates of entrepreneurship and more dynamic small business sectors.

Proportionate, purposeful, outcomes-focused regulation

AFSA regulates with a growth mindset through rules that are proportionate, purposeful and outcomes-focused. Rules that target system misuse and let honest participants get on with the job.

Our Regulatory Action Statement outlines 4 key harms to the systems AFSA regulates.

Harm 1 is: Manipulating personal insolvency proposals and creditor meetings to protect wealth.

Personal insolvency agreements, or PIAs, represent just 1.7% of personal insolvencies – but it's where we see some of the greatest system misuse.

You might remember the recent case involving failed publican Jon Adgemis, whose business collapsed with debts of $1.8 billion, the largest bankruptcy since Alan Bond. His PIA offered creditors just 0.15 cents in the dollar. Zero point one five.

A typical PIA returns creditors 8 cents in the dollar – over 50 times more than Mr Adgemis put on the table.

Even unsecured creditors in the average bankruptcy can expect to see 2 cents in the dollar.

We raised concerns about the fairness of the PIA and the Federal Court has since placed Mr Adgemis into bankruptcy.

The second harm is: Unauthorised access to trust funds, one of the most serious breaches of a practitioner's fiduciary responsibility.

Recently, we commenced Federal Court action against former registered trustee Paul Leroy, alleging the misappropriation of more than $4 million across at least 5 estates.

The third harm is: Harmful insolvency advice and debt agreements.

In September, pre-insolvency advisor John Voitin was sentenced to three years' imprisonment, following a joint AFSA-AFP investigation into an elaborate scam targeting financially vulnerable business owners.

The final system harm relates to: Not removing registrations on the PPSR. These are sometimes referred to as expired or dead registrations.

As you know, the PPSR is a 24/7 national online database for searching and registering security interests in personal property, such as cars, boats, tools, machinery or company assets.

It's a critical part of Australia's credit infrastructure, with a potential value of around $450 billion – or around 16% of Australia's GDP.

Consumers use the PPSR to check if a used car or asset they're buying has money owing on it.

For businesses, it's a vital risk management tool where they can register security interests and ensure they are paid or can retrieve goods if a debtor becomes insolvent.

Last financial year, there were over 13.1 million searches and 2.2 million new registrations recorded on the PPSR.

This audience makes up the bulk of that usage.

For example, Equifax and its EDX platform is responsible for 4.5 million searches a year – or 35% of search volume. And almost 20% of registrations.

You are all therefore in a unique position to give insights about the PPSR and influence the behaviours of those who use it.

We particularly appreciate the work you do as credit specialists to educate customers on the benefits of registering assets on the PPSR.

As business-related personal insolvencies rise, we want to stress to small businesses the value of the PPSR as a risk management tool.

Keep reminding your small business clients to do a $2 PPSR search when they buy second-hand equipment – not just a vehicle – to make sure they're getting clear title.

And if they're a business that creates security interests by selling on consignment or leasing out equipment, for example, they should register their interest on the PPSR.

To maintain the quality and integrity of the PPSR, it must accurately reflect outstanding security interests at any one time. 

Yet, consumers and business tell us secured parties are slow to remove registrations, even though they're obliged under legislation to do so 'in a timely manner'. 

Inactive or outdated registrations prevent consumers from accessing credit and delay business transactions.

We've been focusing on engaging with credit providers to clean up the register – and we've had strong cooperation.

One major motor vehicle financier proactively identified and discharged 39,000 outdated registrations – a tangible contribution to better system accuracy and credit flow.

The financier has also implemented governance and control improvements to ensure registrations remain accurate on an ongoing basis.

A major financial institution identified gaps in its internal oversight framework and initiated broader internal clean‑up activities, resulting in the removal of 26,000 registrations, with more expected.

We're also working to raise awareness about registering intangible assets on the PPSR, like trademarks, copyright and intellectual property.

Intangible property accounts for just 1% of PPSR registrations but has grown by 37% over the past 10 years and will grow further with continued advances in technology and AI.

We're communicating with the small business community – both directly and through their natural business processes – on how to protect their intangible assets and looking to provide clearer guidance to register them.

Conclusion

Australia's personal insolvency and credit systems are constantly evolving.

Our job is to maintain public trust in these systems as they evolve, so people can use them with confidence.

We are also mindful of our role as a regulator to facilitate economic and productivity growth. To ensure the rules protect system integrity while allowing honest participants to get on with the job.

Our response is proportionate regulation that focuses on key system harms. And collective stewardship, where all participants have a role to play in calling out poor behaviour.

We all benefit from a strong credit system that ensures access to finance.

If you see something, say something.

That's how businesses grow, productivity grows, and the economy grows.