The Australian Financial Security Authority (AFSA) has released its Regulatory Action Statement for 2026–27, focusing on the highest risk harms to strengthen trust in Australia’s insolvency system.
Results from AFSA’s 2025–26 Regulatory Action Statement highlight the need for more rigorous oversight of personal insolvency proposals by registered trustees and a continued crackdown on unaffordable debt agreements, and a focus on ensuring the integrity of the Personal Property Securities Register (PPSR).
AFSA’s 2026–27 priorities target:
- manipulation of personal insolvency proposals
- harmful debt agreements
- misuse of the Personal Property Securities Register (PPSR).
AFSA Chief Executive and Inspector-General in Bankruptcy Tim Beresford said: “It is critical the system operates fairly, transparently and free from conduct that exploits vulnerability or distorts outcomes.
“Too often, we have seen individuals, or advisers or industry insiders, seek to manipulate the system to gain an unfair advantage over everyday Australians. Our 2025–26 outcomes highlight the extent of this misuse. We will continue to focus on the conduct that causes the greatest harm to individuals, creditors and the overall integrity of the system.”
Key outcomes from the 2025–26 Regulatory Action Statement included:
- Stronger oversight of personal insolvency proposals:
- Of 278 proposals reviewed, 17 per cent (46) were escalated, with 10 requiring statutory intervention and a number under consideration for disciplinary action.
- Trustee performance was a concern, with 24 proposals requiring supplementary reports to enable creditors to make informed choices.
- Show cause notices have been issued to a number of registered trustees regarding concerns about potential non-compliance with statutory and professional obligations.
- High-profile cases, including Beau Hartnett and Jon Adgemis, revealed manipulation of creditor processes and returns as low as 0.15 cents in the dollar.
- Decisive enforcement action to disrupt misconduct and strengthen accountability:
- AFSA identified shortcomings in trust account management including multiple discrepancies in financial reporting.
- AFSA responded with stronger enforcement, including court action against Paul Leroy and Gavin King, and increased audit scrutiny.
- Better protection for vulnerable Australians with debt agreements:
- AFSA identified risks in the debt agreement system, reviewing over 6,000 proposals with 13 per cent requiring closer scrutiny.
- With debtors often placed into unaffordable agreements, AFSA has increased referrals to ASIC, strengthened collaboration, and taken enforcement action, including the investigation leading to the three-year jailing of John Voitin for fraud.
- Improved access to credit focused on a large-scale clean-up of the PPSR:
- The PPSR has a potential value of $480 billion, or around 17 per cent of Australia’s GDP.
- Over 200,000 outdated registrations have been removed, a significant increase on the previous years.
- This large-scale clean-up, delivered in partnership with over 120 secured parties and a targeted communications campaign - represents more than 80 per cent of indefinite registrations.
- This ongoing program of work is improving data accuracy, reducing barriers for consumers and businesses and enabling faster, more efficient transactions.
In setting out the Inspector-General in Bankruptcy’s expectations for system participants, Mr Beresford said: “Our 2025-26 Regulatory Action Statement has delivered strong enforcement outcomes, including bankruptcies, prosecutions and court action, as well as data-driven insights that reveal systemic misconduct.
“These findings confirm that practitioner behaviour is a key risk driver in parts of the system. Manipulative conduct in insolvency processes undermines confidence and leads to poor outcomes for creditors and honest participants. In response we are sharpening our focus on targeted, high-impact regulation, increasing education, lifting scrutiny of professional conduct and combining enforcement with stronger collaboration to address harm and protect system integrity.
“Consumers must be provided with clear, accurate information to make informed choices. Conduct that steers vulnerable people into inappropriate arrangements will not be tolerated. Markets and systems only deliver when people trust them, and all players in the ecosystem impact whether the system operates fairly and effectively”.
AFSA’s 2026–27 Regulatory Action Statement and a detailed summary of 2025–26 outcomes are available on our website.
