1307.8 - Australian Capital Territory in Focus, 2007  
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Contents >> Business and Industry >> Bankruptcies

BANKRUPTCIES

Business bankruptcies

Insolvency and Trustee Service Australia (ITSA) refer to business bankruptcy as where an individual's bankruptcy is directly related to their ownership of a business. For 2005-06 data, ITSA used the state of residence to classify bankruptcies for the first time, so these data are not comparable to previously published figures. The reason for bankruptcy is that which is reported by the bankrupt business owner.


As was the case nationally, the most frequently reported cause of business bankruptcies in the ACT during 2005-06 was Economic conditions (accounting for 42% of all ACT business bankruptcies, and 33% nationally), Lack of business ability (12% of business bankruptcies in the ACT and nationally) and Excessive drawings (12% of ACT business bankruptcies and 10% nationally).


Ten percent of ACT business bankruptcies 2005-06 were attributed to Seasonal conditions, in contrast to 1% nationally.

11.2 Reported causes of business bankruptcies, ACT and Australia - 2005-06

ACT
Aust.
no.
%
no.
%

Economic conditions
17
42
1 399
33
Lack of capital
2
5
393
9
Lack of business ability
5
12
537
12
Excessive drawings
5
12
428
10
Inability to collect debts
-
-
142
3
Excessive interest
2
5
213
5
Failure to keep proper books
3
7
195
5
Seasonal conditions
4
10
50
1
Gambling or speculation
1
2
49
1
Other reasons (incl. not stated)
1
2
347
8
Personal reasons (incl. ill health)
1
2
545
13
Total
41
100
4 298
100

- nil or rounded to zero (including null cells)
Insolvency and Trustee Service Australia, Annual Report by the Inspector-General in Bankruptcy on the Operation of the Bankruptcy Act, 2005-2006.



Non-business bankruptcies

ITSA refer to non-business bankruptcies as bankruptcies where an individual's occupation and cause of bankruptcy are not related to any ownership of a business.


There were 222 non-business bankruptcies in the ACT during 2005-06. The three most commonly reported causes of non-business bankruptcies in the ACT were the same as those reported nationally, namely Unemployment (40% of ACT non-business bankruptcies, and 33% nationally), Excessive use of credit (20% of ACT non-business bankruptcies and 26% nationally) and Domestic discord (14% of ACT non-business bankruptcies and 13% nationally).

11.3 Reported causes of non-business bankruptcies, ACT and Australia - 2005-06

ACT
Aust.
no.
%
no.
%

Unemployment
89
40
6 074
33
Excessive use of credit
45
20
4 702
26
Domestic discord
30
14
2 274
13
Ill health
16
7
2 057
11
Adverse litigation
14
6
855
5
Gambling or spectulation
7
3
673
4
Liabilities on guarantees
6
3
380
2
Other causes or not stated
15
7
1 198
7
Total
222
100
18 213
100

Insolvency and Trustee Service Australia, Annual Report by the Inspector-General in Bankruptcy on the Operation of the Bankruptcy Act, 2005-2006.


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