Economic conditions is the most common business related cause of personal insolvencies
In 2016–17, where a debtor cited a specific cause, the most common business related causes of debtors entering personal insolvencies were:
- economic conditions (1,779 debtors)
- personal reasons including ill health (471 debtors)
- excessive drawings (310 debtors).
Economic conditions was the most common cause cited by debtors for entering a business related personal insolvency in every year from 2007–08 to 2016–17.
Business related causes of personal insolvencies, 2016–17
Economic conditions is the most common business related cause of all types of personal insolvency
Where a cause could be identified, economic conditions was the most common business related cause of debtors entering a:
- business related bankruptcy or personal insolvency agreement in every financial year since 2007–08, and
- debt agreement in most years since 2009–10.
The most common business related causes of personal insolvencies are similar for all states and territories
In 2016–17, the most common cause cited by debtors entering business related personal insolvencies in all states and territories was economic conditions, where a cause was cited. In all states and territories but one, the second most common cause cited was personal reasons including ill health. The exception was the Australian Capital Territory, where the second most common cause was excessive drawings (comprising just four debtors).
Most common business related causes* by state and territory, 2016–17
|State or territory||Most common business related cause||Number of new debtors||% total new debtors in a business related personal insolvency|
|New South Wales||Economic conditions||350||26.0%|
|Australian Capital Territory||Economic conditions||21||30.4%|
|South Australia||Economic conditions||98||31.3%|
|Northern Territory||Economic conditions||18||31.0%|
|Western Australia||Economic conditions||334||39.1%|
*Where we could identify a cause.
**Includes other and unknown state or territory.
Most debtors entering business related personal insolvencies are male
In 2016–17, more men than women cited all business related causes of personal insolvency. The causes with the highest sex ratio (that is, the ratio of men to women in the debtor population) were gambling or speculation (7.0) and inability to collect debts (6.6). In total, 2.5 times more men than women entered new business-related personal insolvencies.
Business related causes by sex, 2016–17*
|Main business related cause of personal insolvency||Number of male debtors||Number of female debtors|
|Personal reasons, including ill health||301||167|
|Lack of business ability||201||82|
|Lack of capital||109||46|
|Failure to keep proper books||92||21|
|Inability to collect debts||93||14|
|Gambling or speculation||49||7|
|Other business reason||1,524||613|
*Excludes records where debtors did not disclose their sex.
The median age of debtors entering business related personal insolvencies varies by cause
In 2016–17, those who cited the cause seasonal conditions had the highest median age (50 years) of debtors entering new business related personal insolvencies. Those who cited lack of business ability had the lowest median age of 41 years. The median age of all new debtors entering business related personal insolvencies was 45.
Median debtor age, business related causes, 2016–17
|Main business related cause of personal insolvency||Median age of new debtors*, 2016–17 (years)|
|Gambling or speculation||49|
|Failure to keep proper books||44|
|Inability to collect debts||44|
|Lack of capital||44|
|Personal reasons, including ill health||44|
|Lack of business ability||41|
*Where an age was recorded
For the full business related personal insolvency causes report see business causes time series.