Huge drop in insolvency
For about 12 or 13 years now there have been seemingly endless reports that a record number of households are on the brink of ruin.
It's rarely backed up by the hard data, though.
AFSA reported that bankruptices fell to the lowest level since March 1995 in the September quarter, with Victoria faring especially well.
That's despite the population increasing from 18 million to 25½ million over that time.
That's despite the population increasing from 18 million to 25½ million over that time.
25 per cent of bankruptcies are business related, according to AFSA.
Personal insolvencies also continued to improve, with a significant 19 per cent decline from a year earlier.
There were notable improvements in Queensland, Western Australia, and Victoria.
There were notable improvements in Queensland, Western Australia, and Victoria.
Indeed, if you look at the personal insolvency rate per 1,000 of the incumbent population, all jurisdictions have shown a significant improvement of late.
Good to see, though not everyone is happy about it.
Some suggest that an unintended consequence of lower interest rates is an undermining of the capital allocation mechanism.
That is, a short-circuiting of the bankruptcy process through sustaining zombie companies, resulting in weak productivity and wages growth.
I don't buy that myself - I think a decline in bankruptcies is a good thing - but it's a counter-point.
