Portrait of a Fool: Why So Many People Are Going Bankrupt In Australia
Is Australia finally collapsing under the weight of an incompetent and compromised government that has shown no economic skill or foresight?
Australia has just 24 million people yet the political–bureaucratic corporation expects them to carry the weight of 27 consumer-facing taxes while absorbing the spill-over of rising prices, rising interest rates and an increasingly predatory credit environment. Every pressure point is tightening at once. Families are being sued by private schools. Strata bodies are dragging residents into Federal Court. Non-bank lenders are bankrupting people over debts as small as AUD $10,000. At the same time, the cost of living keeps climbing and wage growth is flat. The system is supposed to protect citizens. But when, for example, Australian consumers are paying close to AUD $70 for a single packet of cigarettes (US $47 or GBP £35), what’s really happening is that it’s pushing Aussies to the edge and then blaming them when they fall.
As an ex‑pat watching from afar, seeing family, friends, acquaintances and former work colleagues slammed into the wall by mounting debts, relentless fees, and a system stacked against them is both disheartening and infuriating. Above all, it’s frustrating to feel powerless, unable to intervene or drive any meaningful change. That sense of helplessness gives this story a very personal weight because these aren’t abstract statistics; they’re the people I care about most.
The pressure isn’t coming from one direction. It’s coming from every government-connected institution that has learned it can extract a little more from ordinary people because the rules allow it and no one in power steps in to stop it.
Households already stretched by fees, levies, penalties and rising mortgage costs are being hit again by the very systems meant to regulate fairness. When private schools can bankrupt parents, when strata committees pursue residents through courts, and when lightly regulated lenders have the same enforcement power as the tax office, it becomes abundantly clear that Australians aren’t just paying the price of living. They’re paying for a structure built on compounding financial burdens.
At the centre of that structure sits a tax regime so crowded that the average Aussie can be touched by 27 separate consumer-facing taxes before they’ve even had the chance to catch their breath.
Federal
Income-based
1. Personal Income Tax – progressive tax on wages, salaries and other income.
2. Government Health Insurance Levy (Medicare Levy) – compulsory levy on taxable income to fund Medicare.
3. Capital Gains Tax (Individuals) – applied on capital gains when selling assets (included within income tax).
4. Prescribed Payments by Individuals Tax – tax on certain payments by individuals in special cases (classified tax).
Consumption
5. Goods and Services Tax (GST) – 10% tax on most goods and services (included in retail prices).
Excise and Related National Taxes
6. Alcohol Excise – tax on beer, spirits and other alcoholic beverages.
7. Tobacco Excise – heavy tax on cigarettes and tobacco products.
8. Fuel/Petroleum Excise – tax on petrol, diesel and other fuel products.
9. Wine Equalisation Tax (WET) – tax on wine at wholesale level; passed to retail prices.
10. Luxury Car Tax (LCT) – extra tax on luxury vehicles above a price threshold.
11. Customs Duty (Import Duty) – duties on imported goods that often increase retail prices.
Superannuation-Related (401(k) equivalent)
12. Superannuation Fund Tax (Concessional/Super Tax on Earnings) – tax on earnings in super funds, which affects net super.
13. Superannuation Guarantee Charge (Employer Contribution Penalty) – charge where employers fail to meet compulsory super contributions (affects take-home wage and cost of employment).
14. Self-Managed Super Fund (SMSF) Levy – annual levy on SMSFs.
Other Federal Taxes
15. Fringe Benefits Tax (FBT) – tax on non-cash benefits provided by employers; often passed to employees indirectly.
State and Territory
Property and Transactions
16. Stamp Duty / Duty on Conveyances – tax on buying property, vehicles and some other goods/documents.
17. Land Tax – annual tax on land holdings.
Payroll / Employment Related
18. Payroll Tax (State) – tax on wages paid by employers.
Motor & Transport Taxes
19. Motor Vehicle Registration Fees – compulsory annual tax/fee for vehicle registration.
20. Stamp Duty on Vehicle Transfer / License Duty – state tax on vehicle sales/transfers.
Insurance & Levies
21. Insurance Duty – tax on insurance premiums.
22. Emergency Services Levies (where adopted) – property-based levies for emergency services (in some states).
Gambling & Betting
23. Gambling Taxes – levy on betting, casinos, electronic gaming and racing activities.
Other State Taxes
24. Mental Health and Wellbeing Levy (example in Victoria) – state-specific income or payroll-linked levy.
25. Other Miscellaneous State Taxes/Levies – various smaller state levies that are compulsory (e.g., short stay accommodation levies).
Local Government (Council/Municipal)
26. Council Rates – annual property tax on land/property values, paid to local councils.
27. Water/Stormwater Levies – some local government taxes may be compulsory water or drainage levies.
It’s not only taxes doing the damage, and it’s not just the Australian consumer bearing the brunt. Small businesses are being crushed too, and the scale is staggering: Australia lost 443,395 small businesses this year alone (2024), an exodus that shows the system is not merely stressed but actively bleeding out.
Rising input costs, relentless interest rate pressure and an unforgiving regulatory and credit environment have combined to wipe out firms that once formed the backbone of local economies. For every new venture trying to open its doors, another is being pushed out by overheads it simply cannot absorb and compliance demands it cannot meet. This is not market “correction”. It is a warning sign that the Australian economic framework is failing the very people expected to power it.
And the fallout doesn’t stop at businesses.
Aussies are being dragged into bankruptcy over debts that would have been considered minor just a few years ago. Legal costs, penalty interest, and aggressive creditor action are dismantling households and livelihoods with ruthless efficiency. The system rewards enforcement over fairness, and the most vulnerable are the first to pay the price. Families, sole traders, unemployed white collar, and small business owners are all caught in the crossfire, and nowhere is the human cost more visible than in sectors where safeguards are weakest.
This creeping crisis now extends into areas Australians once trusted to operate responsibly. Other bodies are stepping into the breach, using the courts to pursue Aussie families with the same intensity that banks or the tax office once reserved for only the largest debts. The legal machinery that should protect Australians is instead being wielded to extract payment, and the consequences are devastating.
Despite the Australian Taxation Office being the major driver of bankruptcies (how ironic), private schools and strata bodies are now central players in a bankruptcy surge that is pulling hundreds of Australians into financial ruin. People are being pushed to the wall over debts as small as AUD $10,000. Bankruptcy actions have tripled since 2019, rising sharply after temporary plandemic-era protections were removed. This shift collided with a spike in inflation and the steepest interest rate increases in more than a decade, creating conditions where households and small business owners were already running on fumes. Creditors acted aggressively. Between 2021–22 and 2024–25, there were 6700 attempts to force people into bankruptcy. Actions fell briefly after the pandemic, then snapped back in 2024 with over 2,000 filings, and more than 40% of those actions ended with someone officially declared bankrupt.
Private schools alone accounted for two per cent of all bankruptcies, suing parents who could not keep up with rising fees. Since 2021, schools launched 128 bankruptcy actions, with 45 last financial year alone. Unsurprisingly, the top offenders were all in the state of Victoria. These institutions are turning to the courts with increasing speed, making it clear that the burden is no longer limited to lenders or the tax office. It has now spread to the very organisations families once trusted.
What has become of a society where the places meant to educate and protect our children are actively driving parents into ruin? Where the systems designed to support stability instead weaponise their power against the people?
It’s a moral collapse disguised as bureaucracy, a betrayal so profound it leaves ordinary Australians asking how they’re supposed to survive when the very foundations they relied upon have turned hostile.
And let’s not pretend the inept and careless Australian government hasn’t been busy with its own brand of financial brilliance while the country collapses around ordinary Aussies. The woke Albanese government can lecture about economic resilience all it likes, but actions speak louder than spin. Communications Minister Anika Wells clocked up nearly AUD $100,000 in taxpayer‑funded flights alone, with trips to New York, Paris and a family ski jaunt that looks less like statesmanship and more like an expenses‑account holiday at the public’s cost. Another opportunist feeding off the public purse. And the prime minister’s office signed it all off without blinking.
Meanwhile, the Australian Bureau of Meteorology unveiled a brand‑new website that ended up costing taxpayers $96.5 million — twenty times more than the figure first touted and now widely derided as a colossal waste on a product the public didn’t even want.
And this is the fiscal guidance Australians are meant to trust: grandiose spending in Canberra corridors while families, businesses and the vulnerable are left to shoulder every rising bill, every legal threat, every crushing debt. The contrast isn’t just stark, it’s unforgivable.
This article is an opinion piece informed by publicly available data, official government statistics, and reporting from major Australian media outlets. It reflects the author’s analysis and interpretation of that material and is written in the public interest. While every effort has been made to ensure accuracy, the views expressed are those of the author and should be read as investigative commentary rather than formal legal or financial advice.
References
Australian Bureau of Statistics (ABS), Business Entries and Exits, Australia
Australian Financial Security Authority (AFSA), Personal Insolvency Statistics
Financial Counselling Australia (FCA), Creditor-Initiated Bankruptcies Research and Policy Work
Australian Taxation Office (ATO), Debt Collection and Insolvency Actions
Reserve Bank of Australia (RBA), Monetary Policy Statements and Cash Rate Decisions
Australian Bureau of Meteorology, Corporate and ICT Expenditure Reporting
Australian National Audit Office (ANAO), Government ICT and Digital Transformation Reviews
The Australian Financial Review, Business Closures, Insolvencies and Credit Conditions
The Sydney Morning Herald / The Age, Reporting on Bankruptcies, Strata Debt and Private School Fee Enforcement
I appreciate your article. I am pissed off that this transnational cartel has the will AND ability. They're incentivized to extract virtually anything they can to beat down humanity. Notice any patterns here?