Queensland – Perfect One Day, the Bankruptcy Capital of Australia the Next
Queensland has officially become the bankruptcy capital of Australia on both a raw data and per capita basis on an analysis of data from the Australian Financial Security Authority (AFSA).
The Chamber of Commerce and Industry Queensland (CCIQ)’s analysis of the job creation figures for Queensland shows a private sector in decline over the past five years.
Industries largely representative of public sector employment have produced over 56% of total jobs ‘created’ in the state over the same period. Queensland continues to have the country’s second-highest jobless rate in the nation behind Tasmania.
The latest Suncorp-CCIQ Pulse survey for June quarter, 2019 shows the private sector outlook for the state in the absence of major projects and drought remains pessimistic.
In the last five years, Queensland has recorded more persons succumbing to financial hardship than the substantially more populous states of New South Wales and Victoria.
Breaking the headline Queensland numbers into regional statistics on all debtors who became bankrupt or entered a debt agreement or personal insolvency agreement, we can dig deeper into where financial hardship appears to be most critical across the state (the business and non-business insolvency statistics include personal insolvencies and not corporate insolvencies).
Since the statistics can be generally expected to be greater in the more populous regions of the state, it is useful to look at the statistics as a proportion of the respective population within the regions for relative comparison.
Accordingly, the per capita readings show the critical areas of the state under relatively higher levels of financial stress are those regional centres located in central and northern Queensland.
Focusing more particularly on business bankruptcy rates across the state, company insolvency statistics compiled by the Australian Securities and Investment Commission (ASIC) indicate that there has been a moderation in businesses entering into external administration since 2012.
The statistics further show that historically the leading industries that enter insolvency in Queensland are those located in Construction, Accommodation and Food Services, Retail Trade and Transport, and Postal and Warehousing.
Taking a further look into business survival rates published by the Australian Bureau of Statistics reinforces just how difficult it is to thrive in business in Queensland.
The statistics on business counts show that only 63% of businesses that were operating in 2014 survived the following 5 years to June 2018.
Moreover, the statistics were worse for start-ups over the five-year period, where only 53% survived until June 2018.
It should not be surprising then that Queensland survival rates also lag the comparative southern states.
Federal, state and local government in Queensland now confront businesses and industries dealing with a subdued economic condition, drought and a weakening global outlook.
Policymakers across all three years levels of government will need to assess targeted fiscal stimulus in the immediate term to address the decline of the private sector.