Regions fare better for insolvency

Headshot of Mitchell Woodcock
Mitchell WoodcockSouth Western Times
People in regional WA faring better than those in the greater metropolitan area.
Camera IconPeople in regional WA faring better than those in the greater metropolitan area. Credit: Graphic / South Western Times

Despite making up 20 per cent of Western Australia’s personal insolvency figures, people in regional WA are faring much better than those in the greater metropolitan area, according to the latest statistics.

Statistics for the June quarter from the Australian Financial Security Authority showed that 19 per cent of personal insolvencies in regional areas over the period were business related.

But just 53 people per 100,000 adults in the regional areas have been overwhelmed by mounting debts and forced into insolvencies, compared to 57 per 100,000 in the metro area.

Those struggling have risen across the board in regional WA from the March quarter to the end of the financial year, with Albany the worst hit, as the city’s debtors have risen by two thirds to 25.

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The north of the Wheatbelt was also hit hard, with 61 debtors in the region for every 100,000 people.

It is not all bad news though, with Bunbury dropping from 57 to 42, the Kimberley going from 17 to 14 and the Goldfields almost halving their debtors from 19 to just nine in the past three months.

Debtors are individuals who have entered personal insolvency under the Bankruptcy Act 1966, but this excludes corporate insolvencies, which are administered under separate legislation.

According to the Chamber of Commerce and Industries chief economist Rick Newnham, WA consumers are under considerable financial stress from cost of living pressures, with one in three consumers spending more than they earn and one in five unable to pay off their credit card debt in full at the end of the month.

“Consumers in the metropolitan region are feeling the pinch, with a greater proportion of metropolitan consumers exceeding their monthly income compared to regional consumers,” he said.

“WA businesses must be supported to invest and create new jobs in WA, which will lead to higher wages.

“Australia’s company tax rate for larger businesses is no longer globally competitive so we are risking missing out on international investment.

“For WA businesses to be competitive on the global stage they must have a competitive corporate tax rate.

“This means extending the company tax rate reduction for larger businesses so we can attract new investment to WA and create new jobs to ease cost of living pressures locally.”

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