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  • Debt

    At 30 June 2019, total GST debt was $5.7 billion, an increase of 2.5% compared to last year. GST collectable debt was $4.3 billion, an increase of 6.7% compared to last year.

    Small business continues to represent the largest proportion (71.1%) of GST collectable debt, a reduction of 3.2 percentage points compared to last financial year.

    Since 2013–14, the growth in GST collectable debt (19.3%) has been significantly lower than the growth in GST revenue (27.5%). This indicates that the ATO’s approach to payment and debt is effective.

    Our approach

    We prefer to help businesses meet their payment obligations on time and address any debts that arise as early as possible.

    We recognise that businesses may occasionally experience short-term cash flow issues that prevent them paying on time. To assist, we offer payment plans tailored to their individual circumstances.

    We also recognise that businesses can experience longer-term financial difficulties due to challenging economic conditions or unexpected events. We take an empathetic approach to working with these taxpayers to get them back on track.

    For the minority of businesses that don’t engage with us to address their tax debt, we take firmer or stronger action. This prevents them gaining an unfair financial advantage over the majority of businesses that pay on time, ensuring a level playing field for all businesses.

    In a small number of high risk cases, we issue a firmer action warning advising potential next steps in the event that they do not engage with the ATO.

    Drivers of GST collectable debt

    Drivers of GST collectable debt have remained constant and include:

    • natural growth in a voluntary compliance system – as the economy grows and GST collections increase, unpaid GST also increases
    • the compounding effect of the general interest charge on unpaid GST – at the current interest rate, debt doubles in approximately nine years
    • the tightening of commercial lending.

    Figure 11: Total debt and collectable debt 2015–19

    This graph shows total GST debt and collectable GST debt for the last five financial years.  2014–15: total GST debt $5.0b; collectable GST debt $3.5b. 2015–16: total GST debt $5.0b; collectable GST debt $3.4b. 2016–17: total GST debt $5.6b; collectable GST debt $3.8b. 2017–18: total GST debt $5.5b; collectable GST debt $4.0b. 2018–19: total GST debt $5.7b; collectable GST debt $4.3b.

    See also

    Figure 12: Debt as percentage of revenue

    This graph shows debt as a percentage of revenue for the last five financial years.  2014–15 6.4%, 2015–16 5.9%, 2016–17 6.4%, 2017–18 6.3%, 2018–19 6.5%.

    See also:

    Figure 13: Ageing of GST debt by number of cases

    This graph shows ageing of GST debt by number of cases for the last five financial years. 2014–15: 0–29 days 41,979; 30–59 days 72,535; 60–89 days 10,433; 90–365 days 92,584; >366 days 86,873. 2015–16: 0–29 days 45,808; 30–59 days 75,147; 60–89 days 10,140; 90–365 days 95,177; >366 days 81,192. 2016–17: 0–29 days 30,821; 30–59 days 72,899; 60–89 days 9,604; 90–365 days 93,557; >366 days 68,195. 2017–18: 0–29 days 33,296; 30–59 days 86,451; 60–89 days 9,901; 90–365 days 112,450; >366 days 69,329. 2018–19: 0–29 days 37,903; 30–59 days 86,655; 60–89 days 10,125; 90–365 days 122,678; >366 days 86,073.

    See also:

    Figure 14: Ageing of GST debt by value

    This graph shows ageing of GST debt by value in millions for the last five financial years. 2014–15: 0–29 days 462; 30–59 days 446; 60–89 days 106; 90–365 days 1,104; >366 days 1,355. 2015–16: 0–29 days 428; 30–59 days 462; 60–89 days 121; 90–365 days 1,103; >366 days 1,268. 2016–17: 0–29 days 409; 30–59 days 553; 60–89 days 163; 90–365 days 1,252; >366 days 1,461. 2017–18: 0–29 days 441; 30–59 days 559; 60–89 days 109; 90–365 days 1,406; >366 days 1,485. 2018–19: 0–29 days 426; 30–59 days 564; 60–89 days 129; 90–365 days 1,509; >366 days 1,638.

    See also:

    Support for business

    We have a well-established framework to support businesses facing challenges, including natural disasters. In 2018–19, we helped drought-affected businesses across regional, rural and metropolitan areas to manage their tax by:

    • allowing more time to pay
    • waiving penalties or interest charged when the business was affected by drought
    • offering payment plans with interest-free periods
    • adjusting pay as you go (PAYG) instalments to better suit business circumstances.
      Last modified: 01 Jul 2020QC 61031