• Collecting debt

    Collectable debt increased by 6.5% in 2012–13 despite improvements in the efficiency and effectiveness of our debt collection. This increase reflects in part the level of collectable debt inflow, which was 12.9% higher than in 2011–12.

    Table 2.10 Debt holdings, 2011–12 to 2012–13

     

    2011–12
    $b

    2012–13
    $b

    Change (a)
    %

    Activity statement debt

    9.1

    10.0

    9.9

    Income tax debt

    7.1

    7.3

    1.5

    Superannuation guarantee charge debt

    0.3

    0.4

    18.6

    Collectable debt total (b)

    16.6

    17.7

    6.5

    Debt subject to objection or appeal

    8.9

    10.1

    14.2

    Insolvency debt

    6.2

    5.4

    –13.0

    TOTAL

    31.7

    33.2

    4.8

    There was a gradual increase in the ratio of collectable debt to net tax collections, which was 5.7% at 30 June 2013, up from 5.5% at 30 June 2012. The rolling 12 month average of the ratio gradually increased throughout 2012–13 but remained within a narrow band (4.9% to 5.2%).

    Figure 2.2 Rolling twelve-month average of the ratio of collectable debt to net tax collections, 2012–13

    Rolling twelve-month average of the ratio of collectable debt to net tax collections, 2012–13

    View table of Figure 2.2

    Figure 2.2 Rolling twelve-month average of the ratio of collectable debt to net tax collections, 2012–13
      Rolling 12-month average of ratio of collectable debt to ATO collections

    Jul-12

    4.86

    Aug-12

    4.90

    Sep-12

    4.93

    Oct-12

    4.94

    Nov-12

    4.97

    Dec-12

    4.99

    Jan-13

    5.02

    Feb-13

    5.07

    Mar-13

    5.12

    Apr-13

    5.13

    May-13

    5.15

    Jun-13

    5.17

    Both total debt collections and the efficiency of our debt collection work improved, with increases across two measures – collections attributable to our debt collection actions and debt collections per full-time equivalent (FTE) employee member – up 15.4% and 9.3% respectively on 2011–12.

    Our management of debt holdings improved, with increases in both debt inventory turnover and the percentage of debt resolved in the year of intake, compared to 2011–12. However, there were decreases in payment arrangement kept rates.

    As part of our debt management, we determined debts worth $4.6 billion to be either irrecoverable at law or uneconomical to pursue in accordance with the relevant legislation. While this is an increase of $2.0 billion compared to 2011–12, the proportion attributable to debts irrecoverable at law (as a result or bankruptcy or company wind-up) is $1.8 billion (89.1%).

    Notwithstanding the improvements in our management of debt holdings, the proportion of total collectable debt aged two years or more increased to 17.8% at 30 June 2013, from 16.1% at 30 June 2012.

      Last modified: 16 Oct 2014QC 42662