House of Assembly Fifty-Second Parliament, Second Session (52-2) 52 2 Parliament of South Australia House of Assembly published Question Time Insolvency Data INSOLVENCY DATA The Hon. I.F. EVANS House of Assembly Davenport INSOLVENCY DATA The Hon. I.F. EVANS (Davenport) (14:41): My question is to the Minister for Small Business. If the economic fundamentals are as strong as the government claims, why were there 118 per cent more insolvencies in South Australia in the March quarter when the national figure for insolvencies actually dropped? The Hon. J.W. WEATHERILL House of Assembly Cheltenham Premier Minister for State Development Minister for the Public Sector Minister for the Arts INSOLVENCY DATA The Hon. J.W. WEATHERILL (Cheltenham—Premier, Treasurer, Minister for State Development, Minister for the Public Sector, Minister for the Arts) (14:42): I am glad that this question came out because it allows us to clear up some appalling misinformation that has been put out there in the public sphere by the Leader of the Opposition. What the Leader of the Opposition put about the other day was that he cited business insolvency meetings for the March quarter from a recent ASIC report— Mr PISONI House of Assembly Mr PISONI: Point of order, Mr Speaker. Just from the introduction, the Premier said he was going to be debating the figures that were put out earlier. The Speaker House of Assembly The SPEAKER: No, actually he didn't say that. He was going to offer us information which might incidentally clear up what he regarded as a conjectural matter. Treasurer. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Thank you, Mr Speaker. It is my great pleasure to be able to answer this question, because this information does need to be put into the public sphere because what has been out there is inaccurate. The conclusion that you can draw from all of this is that South Australia is not taking a disproportionate amount of the nation's insolvencies; in fact, it is below national averages. So it is completely inconsistent from the message that was sought to be put around, and I will take you through why the information put out there was wrong. The ASIC report—of course, the Leader of the Opposition used Series 2 data from the report instead of Series 1 data. The importance of that for the ASIC is this: the ASIC report says they prefer to use Series 1 data when explaining trends in insolvency because it is a more accurate measure of corporate insolvency in comparison, given that it avoids the double counting reflected in the Series 2 statistics. So he uses— Mr Marshall interjecting: The Speaker House of Assembly The SPEAKER: The leader is warned for the first time. The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: He uses a piece of data that the very report warns against using. The second thing is that the Series 2 data includes different types of insolvency appointments that are arranged for the same business. This means that obviously there are duplications in the Series 2 data. The other piece of misinformation is that in the data, 264 is the number of appointments made, not the number of businesses seeking insolvency meetings, so as ASIC state in their report and in reference to the Series 2 data, the number of insolvency appointments will always be greater than the number of companies going into external administration for the first time. Even after all of this, it would be widely accepted that not all businesses making insolvency appointments end up being insolvent. Spring Gully is a case that leaps to mind. That is why conclusions should be made on the figures by analysing trends. Series 1 data shows that 128 (not 264) businesses required an insolvency meeting, which is up from 84 in the December quarter. More importantly, the December quarter recorded a drop to 84 from 111 in the September quarter. So, the trend data seems to suggest that insolvency rates are remaining steady in South Australia. The other— Members interjecting: The Hon. J.W. WEATHERILL House of Assembly The Hon. J.W. WEATHERILL: Well, why didn't the Leader of the Opposition come out in the September quarter and talk about the fact that the number of insolvency appointments had dropped? Probably the most significant element of the whole analysis, though, is that the low base that South Australia starts at compared with other states also warrants caution when divulging these statistics. It is important to look at what our share of the national insolvency meetings is. The March quarter suggests that our share sits at 5.11 per cent, when compared with the most recently available ABS data regarding national population share, which sits at 7.3 per cent, as well as our share of national operating businesses, which sits at 6.9 per cent. So, it can be clearly seen that South Australia is not taking a disproportionate amount of the nation's insolvencies. The very point that those opposite have been trucking around the media outlets around this state is simply wrong—caught out talking down South Australia, trash talking South Australia for your own base political ends.