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Monday, 16 September 1985
Page: 575

Senator MAGUIRE(5.28) —I wish to address some remarks to the annual report for 1983-84 on the operation of the Bankruptcy Act. It is pleasing to note that in the 1983-84 financial year we saw another significant fall in bankruptcies under the present Government. In 1982-83, the last year in which the Fraser Government was in power, there were 5,151 bankruptcies in Australia. That was reduced to 4,909 in the first year of the Hawke Government, and I believe that the figures for 1984-85, which will be available soon, show an even more dramatic reduction in the level of bankruptcy in Australia. However, the decrease in 1983-84 of 4.7 per cent was a very welcome reduction in the bankruptcy level, and that figure reflects the improved national economy, because bankruptcies are a lagged response to economic activity.

Most Australian States recorded reductions in bankruptcies in 1983-84 and, as I say, that reflected the national economic trend. In my own State of South Australia, under the Bannon Government, there was a 17.7 per cent reduction in bankruptcies-a rapid reduction as a result of the policies in South Australia of the Bannon and Hawke governments. In Victoria there was a 15.8 per cent reduction in bankruptcies. There was also a fall in Western Australia, where bankruptcies fell by 3.4 per cent in 1983-84.

Regrettably, bankruptcies in Queensland are rocketing. In the three bankruptcy districts in Queensland there was a 23 per cent increase in the number of bankruptcies-from 703 in 1982-83, to 865 in 1983-84. Clearly, judging by the number of bankruptcies there, the Queensland economy is out of step with the national economy. Certainly, I believe that the bankruptcy level indicates that in yet another area the Queensland economy is holding back national economic recovery. Queensland is going in the opposite direction to the rest of Australia, economically as well as socially. Unfortunately, there is an error on page 22 of the report, which understates the rise in the level of bankruptcies in the southern Queensland district. It states that the number of bankruptcies in that area rose from 592 to 746-a 20 per cent increase. In fact, there has been a 26 per cent increase. A 20 per cent increase would have been bad enough; a 26 per cent increase is disastrous. When one looks at page 53 of the report it is possible to ascertain the reasons for the high level of bankruptcies which have occurred in Queensland in the last couple of financial years. For instance, it is indicated that, nationally, 410 businesses which failed gave economic conditions as the problem. Of those 410 businesses, 130 were in Queensland. The figure recorded in Queensland was much higher than in any other State. Clearly, this indicates yet again the very parlous economic conditions in Queensland.

Taking a national view of the bankruptcy figures, once again they indicate two very high risk areas in the economy. One of those areas is building and construction, the other is transport and storage. Together those two sectors account for a very large proportion of Australian bankruptcies. In 1983-84, in the building and construction industry there were 463 business bankruptcies and 128 non-business bankruptcies-a very large figure. A large proportion of those bankruptcies occurred in Queensland. In the transport and storage sector, which is another high risk area, there were 376 business bankruptcies and 193 non-business bankruptcies-a large share of the total figure. Again, Queensland contributed significantly. Clearly, there are high failure rates in the building and construction sector and the transport and storage sector. New entrants into those sectors of the economy-persons proposing to establish new firms-should take a great deal of care in considering their prospects because very great risks of insolvency are involved.

As I have indicated, it is now possible to calculate some of the figures for the 1984-85 financial year. They show that a further large reduction in bankruptcies has occurred under the present Government, even lower than the improved figures for 1983-84. A further large fall was recorded in my own State, I am pleased to say, from around 700 to 600.

The DEPUTY PRESIDENT —Order! The honourable senator's time has expired.