Anna Longley, Deputy Commissioner Frontline Risk & Strategy
Melbourne 5 September 2025
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Introduction
Good morning. I’d like to thank The Tax Institute for the occasion to speak to you all today. I haven’t spoken at the Tax Summit for a few years and I’m very grateful to have been invited back in this current role.
I’d like to begin by acknowledging the Traditional Owners of the land that we meet on, the Wurundjeri and Bunurong people here in Melbourne, as well as the Traditional Owners of the lands of those joining virtually. I would like to pay my respects to the elders past and present, and to extend my respect to any First Nations people here today.
The topic of payment and debt management may not be popular, but it is certainly an important one. Today, I will give you some insights into debt owed to the ATO, action we’re taking to encourage payment and an overview of the support we have available to taxpayers and agents.
Collectable debt by client experience
Let me start by giving you some numbers.
The ATO’s debt book typically grows in parallel to growth in the economy. However, over the last few years, debt has grown at a rate that we consider out of pattern.
This was largely due to the economic impact of natural disasters (floods and bushfires) and the COVID-19 global pandemic. Our more lenient approach to payment during the pandemic had an impact on payment culture within the community, where we continue to see some taxpayers de-prioritising payment of ATO debts.
We have seen a large increase in debt, which now includes a significant proportion of aged debt. The most notable increase was across small business taxpayers. Despite aged debt growing, I note that over 50% of the collectable debt balance is no older than 12 months old, and it’s in this period that we have the best opportunity to collect.
Collectable debt has grown from $26.5 billion as at 30 June 2019 to over $50 billion at 30 June 2025.
Collectable debt by products
Most of the unpaid tax debt owed by businesses relates to GST, pay as you go (PAYG) withholding and the superannuation guarantee charge.
Some businesses appear to be de-prioritising payment of tax and super when they should be provisioning for these bills like they would with any other business expenses.
As at 30 June 2025 approximately $34.7 billion of the collectable debt is unpaid activity statement debt.
Small business accounts for $35.9 billion or approximately 66.1% of total collectable debt:
- $24.7 billion of this is activity statement debt
- $1.9 billion is superannuation guarantee charge.
70% of this small business debt has been self-reported.
Strengthening our approach to payment
Our corporate plan for 2025–26 continues to focus on strengthening payment performance and debt collections.
Our role is to collect tax so that the government can deliver services to the Australian community and it is our job to ensure everyone pays the right amount, to the benefit of all Australians.
When we do that well, we’re working towards our vision, which Commissioner Rob Heferen shared with you yesterday: an Australia where every taxpayer meets their obligations because:
- complying is easy
- help is tailored
- deliberate non-compliance has consequences.
Our vision defines where we want to be, and our strategy and actions define how we get there.
I want to be clear; we still have a strong payment culture in Australia. Within the tax and super system, almost 90% of taxes are being paid on time, with decreasingly smaller amounts paid over time. This shows that the majority of taxpayers continue to meet their payment obligations. However, I would like to see this increase, particularly for the small business market, where payment on time is approximately 70%.
Through our community messaging, including through you, our partners in the tax system, and increased firmer actions, we’ve seen the growth of collectable debt slow over the last 12 months.
We continue to build on our Payment Strategy, to encourage on-time payment behaviour, with 4 key principles:
- being firm, consistent and clear on the principle that those who can pay, must pay on time
- supporting those who have capacity to pay, but are struggling to get back on track
- applying firmer actions for those who are choosing not to engage with us or are deliberately not paying their debts
- supporting those who do not have capacity to pay to exit the system.
Our preference is always to support taxpayers to pay. One of the support mechanisms we offer are payment plans, which remain available to those who cannot pay in full and on time. As at the end of June 2025 we had over 655,000 payment plans in relation to approximately $11.7 billion of debt. Interestingly, the number of payment plans has grown, although the amount of debt under these plans has remained relatively stable.
While the majority of tax is paid on time, in dollar terms there is a significant amount that isn’t.
As the Commissioner mentioned yesterday, only 1% of debtors are responsible for 20% of what is owed.
We will continue to send SMS or letter reminders in the first instance for self-assessed debt, however we are also moving more swiftly to firmer actions if the debt is raised as a result of audit.
We know that acting early helps to avoid debts becoming unmanageable, ensures a level playing field and can prevent future impacts on employees and other creditors. And, where we see that our nudges and light touch engagements have no effect, it’s our role to take the actions that will.
This is a key driver in shaping where we focus our debt collection efforts and prioritising areas that require firmer and faster action, which include the following:
- Businesses – big and small – who don’t engage with us or set up a payment plan, particularly for unpaid GST, PAYG withholding or employee super, can expect us to move more quickly to firmer actions such as director penalty notices (DPNs) and garnishees.
- Directors of multiple companies who allow amounts of GST, PAYG withholding and employee super to go unpaid, and do not engage with us, can expect us to look at their debts more holistically. These directors can expect to receive DPNs capturing the total value of these amounts across all related entities.
- For businesses with debts greater than $100,000, where there is no engagement under way, we may disclose the debt to credit reporting bureaus.
- Taxpayers unable to get back on track and demonstrating signs of insolvency through no capacity to pay, can expect further legal recovery or insolvency actions.
We recognise most taxpayers do the right thing and pay in full and on time, however not paying tax affects everyone. Where there is a deliberate de-prioritisation of meeting obligations, we must take action as the community rightly expects.
Firmer actions
While we have a range of tools to assist with debt recovery, the firmer actions we are focusing on taxpayers who are not engaging with us are DPNs, disclosure of business tax debts to credit reporting bureaus and garnishee notices, while legal actions include wind-up and bankruptcy applications.
In the 2024–25 financial year we issued:
- over 84,000 DPNs to individual directors in respect of around 64,000 companies
- over 28,000 businesses an intent to disclose notice. Of these, we disclosed around 24,000 debts to credit reporting bureaus.
- over 15,000 garnishee notices, both point in time and enduring.
Of course, as businesses review their options to pay, it will prompt them to assess whether in meeting their obligations, they can also continue operating.
There is little doubt that in taking this approach, we are prompting entities to take a realistic look at their financial position and viability, and some businesses are taking the steps to voluntarily enter into insolvency.
We do expect that more insolvencies are likely to arise for businesses that aren’t viable. Taking insolvency action earlier helps to protect other creditors and ensures a level playing field.
We encourage businesses that may have difficulty paying on time to reach out to us at the ATO or you, their registered tax professional, to discuss their options. Our preference remains centred around providing tailored support through engagement rather than enforcement.
To support and inform the choices we know businesses are making every day, we are working to be as transparent as possible about what to expect from the ATO when you don’t meet your tax obligations on time. I also strongly encourage you to educate your clients about the consequences of not paying their ATO debts.
Small Business Restructuring
Unpaid tax affects everyone – employees, other small businesses and the broader economy. Early action can prevent escalation and open up viable options like Small Business Restructuring (SBR).
SBR was introduced as an alternative to other insolvency actions in 2021. It is a formal restructuring mechanism available to small businesses in serious financial distress. These offer substantial benefits, including maintaining business operations, contributing to the economy and preserving jobs.
The ATO has observed a significant increase in the use of SBR, which is now the second most common form of corporate insolvency.
The number of SBR appointments has increased exponentially from the 2023 financial year onward – with restructuring increasing 6 ½ times through to the fourth quarter of the 2025 financial year, from 447 in 2023 to 2,918 in 2025. SBR appointments are expected to remain high in the 2026 financial year.
While ASIC regulates the program, the ATO is often the largest creditor in SBR plans and frequently holds the deciding vote. We support plans that are commercially sound, fair and demonstrate genuine efforts to comply.
The ATO voted on 2,668 restructuring plans during the 2024–25 financial year, supporting 2,103 plans – an overall support rate of around 80%.
Support for SBR proposals focus on a strong compliance history. All employee entitlements (including superannuation) must be paid or up to date. The ATO will not support plans that fail to meet these standards or offer less than liquidation would.
The ATO is open to providing feedback on the draft restructuring plan. This is an important opportunity for the company, as the terms of a submitted plan cannot be varied. If creditors do not accept the plan, there is no opportunity to appeal the decision and the company cannot make another restructuring plan for 7 years. It is therefore important that the company makes the best possible proposal.
We recognise and support businesses that meet their obligations. SBR is not a shortcut, it’s a structured alternative to insolvency for eligible businesses. Our decisions aim to protect the integrity of the system and ensure fairness.
Tax practitioners play a vital role in identifying the potential for SBR plans and should encourage clients to seek advice early from qualified restructuring practitioners. For those businesses who are eligible, professional guidance improves the quality of proposals and increases the likelihood of successful outcomes for all parties.
Support options and improvements
In his address yesterday, Commissioner Heferen acknowledged some important work we’re doing to improve our administration of the tax and super systems.
Firstly, Rob announced consultation on our review into interest and penalty remissions, lodgment and payment deferrals and payment plans.
The ATO receives hundreds of thousands of requests for remission of penalties and interest every year. For example, in the 2024–25 financial year, the ATO received over 125,000 requests from taxpayers and registered tax practitioners to remit general interest charge (GIC).
We’ve heard the feedback from the tax practitioner community, with the main input being around 3 core themes:
- timeliness of decisions on remission requests
- insufficient explanation/reasons for decisions not to remit
- inconsistency in decision making.
I am sure you will welcome the news that we are undertaking this review to ensure there is transparency in how we make our decisions, and that fairness and consistency can be maintained in how we deal with the requests.
Alongside the announcement of the review, Rob touched upon our new Vulnerability Framework and our work to include debts on hold in taxpayer accounts, both of which I will spend some time on. I will also highlight the supported lodgment program and the assistance it can provide you as tax practitioners.
Vulnerability Framework
The ATO has been working with a range of stakeholders to develop the ATO Vulnerability Framework (PDF, 242KB)This link will download a file and released this for public consultation. The Framework sets out our commitment to supporting people experiencing vulnerability, while fulfilling our core role of collecting tax to fund essential services across the country.
As we become increasingly firmer in our debt collection efforts, we recognise that not everyone experiences the tax system in the same way. Many individuals face significant challenges — challenges that can make engaging with the tax system more difficult.
The Vulnerability Framework is designed to enhance the way we support individuals facing these circumstances. It outlines our commitment to fostering more inclusive and consistent interactions with the community, ensuring that those in vulnerable situations receive the assistance they need when dealing with their tax matters.
We share a common goal with tax professionals: to increase transparency, provide clear guidance and facilitate constructive engagement with taxpayers.
Whilst the framework cannot change existing tax obligations, it guides our approach for how we listen, communicate and connect individuals to the right support. Where the law provides the Commissioner with discretion, we will be transparent about how circumstances will be considered.
I’d like to thank everyone who contributed to the public consultation. Your feedback will help ensure the Framework is inclusive, practical and meaningful in real-world situations when it is published next month.
Debts on hold
In addition to these changes, we have also been working to improve the transparency and treatment of debts that are placed on hold.
We may place debts on hold when we consider they are not currently economical to pursue through debt recovery actions. When debts are on hold, they remain subject to offsetting against any refunds or credits in the taxpayer’s account.
Since November 2023, when the ATO puts debts on hold, they remain in taxpayers’ account balances. However, debts placed on hold prior to this date have not been included – but this is changing.
We have commenced including debts on hold in taxpayers’ account balances, with the first letters going out to taxpayers, or their tax agents, last week. We are taking a progressive approach to ensure we can respond to the needs of specific cohorts. This is part of our continued efforts to improve the experience for taxpayers and help them to understand their full tax positions. The approach has been informed through extensive stakeholder consultation, including with the tax profession.
Including these debts in account balances does not mean they have been taken off hold, and while a debt is on hold the ATO will not actively pursue payment of the debt.
Improvements have also been made to how these debts appear in account balances, and it will now be easier for the majority of impacted taxpayers to recognise that they have a tax debt on hold and understand where it came from.
The ATO is remitting the GIC that has applied to debts on hold when they weren’t included in account balances. Taxpayers don’t need to do anything to request this remission, and it means taxpayers have not been charged GIC for this period.
Once a taxpayer’s debt on hold has been included in their account balance, the ATO will continue to remit GIC for an additional 6 months. After this, GIC will apply.
There are currently no changes for debts placed on hold prior to January 2017 that may be impacted by the proposed law change announced in the 2024–25 Federal Budget. This applies only to individuals, small businesses and not-for-profit entities. These remain excluded from offsetting and will not be included in account balances pending that law change.
We have updated our web content, which you can find through searching for ‘debts on hold’ and have provided more information about debts on hold and their inclusion in account balances.
Supported lodgment program
I would like to close out by highlighting the supported lodgment program.
I have recently been engaging with communities and tax practitioners in different regions impacted by natural disasters. We are continuing to consider how we best support taxpayers recovering from natural disasters. In the course of those conversations I was struck by just how impacted the tax practitioner population can be – being personally effected by the disaster and carrying on supporting their clients through equally difficult circumstances. It also became apparent that tax practitioners either don’t know how or when to contact us in relation to the practitioner support available.
A supported lodgment program can help tax practitioners whose whole practice has been affected by unforeseen circumstances such as a natural disaster, ill-health, serious illness or loss of a key staff member.
It's available to practices of all sizes when you need additional time to lodge a large proportion of your clients' obligations.
We have seen tax practitioners lodge bulk deferral requests for clients when a supported practice approach would have been more appropriate and would result in a more consistent outcome.
We will work with you to tailor solutions to help you get your lodgment program on track, while supporting you to keep your own tax affairs up to date and plan for the future. This may include applying lodgment deferrals, or in some instances suspending compliance action.
You can apply for a supported lodgment program by submitting a request through Practice mail in Online services for agents.
Images
Deputy Commissioner Anna Longley (JPG, 1.0MB)This link will download a file