Friday 5 February 2016

Debt Collection !

The state premiers are keen to hike the GST from ten percent to fifteen percent to fill a gaping gap in their finances but it seems that there is a bonanza waiting to be collected by the State Debt Recovery office.   In New South Wales alone, outstanding debt owed to the Treasury amounts to $ 1.2 billion.

This debt covers a multitude of law breaches.  As to be expected, there are a plethora of unpaid traffic fines and many firms are delinquent in paying payroll tax.  Many wealthy properties owe the government for land tax - and then there are the fines for things like riding a train without buying a ticket - or the punishment fines that magistrates impose on offenders appearing in their courts.

The state Debt Recovery Office has written off $ 200 million on these fines as "uncollectable "!  Some people simply drop out of sight because they constantly change their address and then there are the "homeless ".  That old expression that you can not "get blood out of a stone "applies. In fact it is a waste of money serving notices and dragging them to court - for yet another demand for money they do not have.

This week this "uncollectable " situation was highlighted when a seventy-seven year old man failed to appear to answer charges of driving while disqualified - for his twenty-ninth offence.   His driving license has been cancelled until 2092 - and the magistrate issued an order for his arrest because of the "no show "!

No doubt he will eventually be dragged before a court and the magistrate will consider his or her options.  The chances are high that any new fine will go unpaid, and we have such an overcrowding problem in our prisons that we are now cramming three into cells designed for a single occupant - and it costs a small fortune to incarcerate each prisoner.   It is also obvious that this man has no intention of obeying the law and that further driving offences seem inevitable.

One of the options to force people to pay fines now implemented is the cancellation of both driving licenses and vehicle registration, but that simply imposes a new risk on a law abiding public. Driving an unlicensed and uninsured car negates the green slip protection for those injured in an accident. The need for a car as transport is considered so essential that many continue to drive despite license and registration cancellation.

The law allows money to be recovered by "garnishing " wages.  It is a lengthy legal process and a notice is served on an employer that requires a small percentage of the weekly wage to be set aside and paid to the Debt Recovery office - until the debt is extinguished.  In many cases, if that employee is on a casual basis his boss may consider this "garnishee "an imposition and let employment cease - or the employee simply walks away and finds another job.   Often, it costs more to implement than results in recovery.

Recovering money owed to the government seems to fall most heavily on "honest "taxpayers.  Those with a secure job and living at a fixed address are right in the sights of the Debt Recovery office and many become enrolled in "payment plans ".    The government is quite happy to recover money owed on the same basis as the commercial world.  Perhaps the debt is beyond the debtor's reach to satisfy as a lump sum, but it can be reduced steadily on the basis of small weekly or monthly payments.  These are negotiated between the Debt Recovery office and the debtor - and the terms are believed to be very "generous "!

Sadly, most of the money that could fix our roads and improve the quality of schools will remain an uncollected debt on the books of the Debt Recovery office.   Since the days of the Roman Empire getting the public to pay what they owe has been forever out of reach for whatever type of government holds office !

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