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Chief Executive's review

Hamish McCormick, AFSA Chief Executive
It’s my pleasure to present the Australian Financial Security Authority’s (AFSA’s) 2019–20 annual report. I present this report at a time when we are facing many unique and difficult challenges in response to the COVID-19 pandemic and devastating bushfires.

With COVID-19 rapidly changing our world, the direction and strategy we have set over the past few years is as important as ever. To fulfil our vision of being a world-class government service provider and a firm and fair regulator, we focused on building well-designed services using fit-for-purpose technologies, and an agile, capable and professional workforce. We made good progress in a number of areas, including quickly adopting digital technologies to enable our people to work remotely and ensure our services remained available.

Future AFSA

During the year, we consolidated our strategies into a single program of work—‘Future AFSA’. This program links together our different activities to make sure we direct our efforts where they deliver the greatest benefit to our service users and stakeholders, in a manner consistent with broader reforms to the Australian Public Service. We have built the program around four areas: improving our services; building our broader governance arrangements to ensure our information is secure, reliable, accurate and accessible; upgrading our technology; and ensuring we collect, store and use data for its greatest impact.

In previous years, I’ve highlighted our focus on building services suited to Australia’s diverse community. Our goal is to make our services simple to use by making it easier for people to interact with us. During the year, we continued to transform our legacy systems to meet evolving user needs and expectations in a digital age.

The success of our strategies to provide a more contemporary experience for our service users depends on our ability to upgrade technology. Like many organisations, COVID-19 caused us to reprioritise our technology investment plans to accelerate a number of digital activities as we transitioned to a home-based workforce. We were able to transition to remote work arrangements with no disruption to our public-facing services.

We continued to streamline how we work to ensure that we are as agile as possible, which helps us respond to new and emerging challenges. We examined our organisational culture—including innovation and inclusive decision-making—and how culture can impact compliance among those we regulate. During 2019–20, I launched our innovation strategy, Innovate@AFSA, which focuses on building a diverse and collaborative culture that confidently engages with risk and has the right capabilities to meet our service users’ needs.

I’m grateful for the ongoing participation of the many representative groups that attended our personal insolvency and personal property securities forums, as well as those stakeholders who attended the other regular meetings and forums we held during the year, including small business roundtables. These forums provide important insights into our operating environment and enable us to get early feedback and test ideas for improving how we regulate and deliver services.

Data is central to everything we do. It enables us to make timely and accurate decisions under the legislation we administer, provides us with insights into the people we serve, and allows us to make informed choices about where we should direct our time and effort to support compliant behaviour by those who use and rely on our services.

The COVID-19 pandemic has highlighted the contribution our data makes in building a comprehensive picture of the Australian economy. It’s for that reason, since March 2020—in response to COVID-19—we have publicly released a number of our datasets fortnightly, instead of quarterly.

Recognising the fundamental importance and value of our data, we redirected resources towards a dedicated data and digital design capability. This will enhance our ability to:

  • identify emerging harms early
  • have greater visibility of the unique needs of vulnerable user groups
  • create efficiencies in our transactional decision-making that enable us to provide more direct, tailored services to those who need them
  • identify those who seek to misuse the systems we administer.


The disruptive impact of COVID-19 on the Australian economy means that our role in balancing the rights and responsibilities of creditors and the people who access our insolvency services has never been more important. We continued to adapt to the changing conditions in the personal insolvency system to ensure the division of work between the Official Trustee and registered practitioners is allocated in a way that supports our regulatory role. This will remain an area of focus as we adapt to changing demand in a dynamic operating environment.

During the year, we released two new online personal insolvency services. In January 2020, we released Bankruptcy Online, which allows people to lodge bankruptcy applications online using a form redesigned in consultation with key stakeholders and service users. We’ll continue to test new service designs to digitise and simplify the application process to support and protect vulnerable user groups.

In March 2020, we released a fully digitised temporary debt protection application process. This release was in response to temporary changes to the Bankruptcy Act 1966 as part of the Australian Government’s economic response to COVID-19. The changes extend the period of protection for people in financial difficulty against enforcement action by unsecured creditors from 21 days to 6 months. By digitising the process, we’ve ensured that prompt and timely relief can be delivered in response to any increased demand for the service.

In our regulatory role, we published guidance for insolvency practitioners on issues raised by the COVID-19 pandemic, and reinforced our expectations about how they would assist people struggling with their finances during this time. We also engaged widely with stakeholders, including professional accounting bodies, about the:

  • temporary changes to personal insolvency legislation to protect people in financial distress
  • heightened risk of poor or illegal advice provided by untrustworthy advisers
  • importance of the Personal Property Securities Register, particularly if insolvency numbers increase due to the pandemic.

To address concerns raised about insolvency practitioner remuneration, we undertook a number of initiatives, including research to gain a deeper understanding of the practices used by trustees to set and charge fees. You can read more about the research and its findings in The year at a glance and our performance results for Goal 1: foster confidence.

A lack of insolvency practitioner independence, whether real or perceived, and the associated influence of untrustworthy advisers, can have a detrimental impact on the community’s confidence in the system. During the year, we continued to remind practitioners about their responsibilities to remain independent and to avoid associations with untrustworthy advisers. In instances where trustees and debt agreement administrators were found to have failed in their responsibilities, we took appropriate disciplinary actions.

Personal Property Securities Register

We continued to enhance the Personal Property Securities Register (PPSR)—which is fully digitised—and develop new information products. Concerns remain about low levels of community awareness of the PPSR. Through our work with partners, such as the Australian Small Business and Family Enterprise Ombudsman, we know that a number of barriers prevent occasional and first-time users from being able to effectively use the PPSR.

During 2019–20, we worked with the Behavioural Economics Team of the Australian Government to identify ways to redesign the PPSR registration process. We also released an updated version of the PPSR business guide, along with new guides and brochures to support small business to more effectively manage their registrations. All of these products were developed in close collaboration with user groups.

We recognise that the ongoing value of the PPSR as a financial risk management and consumer protection tool depends on flexible underlying technology. We remain committed to exploring opportunities to continue to support the PPSR with fit-for-purpose technologies. We had planned to finalise our strategy for future investment in the PPSR during 2019–20, but decided to defer final decisions until 2020–21 while we work to assess the longer-term impacts that COVID-19 may have on activity.

Legislative reform

Aligned with the legislative measures put in place on temporary debt protection, we implemented legislative amendments that extend the period before creditors can initiate enforcement action after a bankruptcy notice is issued. We also continued to implement some aspects of debt agreement reform, and worked with the Attorney-General’s Department as it prepares a response to the review of the Personal Property Securities Act 2009.

The year ahead

It’s difficult to predict how 2020–21 will unfold. To successfully navigate an increasingly dynamic environment, we’ll need to be adaptable and agile in fulfilling our mandate. I have every confidence that our strategy over the last few years—now consolidated in the Future AFSA program—has put us on the right path to delivering world-class government services and regulating firmly and fairly.

In 2020–21, our technology strategy will focus on further digitising our services. We’ll work towards modernising and streamlining our technology to ensure that it’s able to support the digital services that our users expect.

In closing, I want to thank our stakeholders for their ongoing willingness to engage with us in a variety of ways, helping us to shape and deliver a number of initiatives over the past year. We aim to further strengthen those relationships in the year ahead. I’d also like to thank our staff for their ongoing dedication, professionalism and flexibility, which enable us to continue delivering high-quality services.


Hamish McCormick
Chief Executive
Inspector-General in Bankruptcy
Registrar of Personal Property Securities

17 September 2020