Appendix 6: Debt management
The following tables show statistics on debt holdings and debt not pursued.
Small businesses continue to account for the majority of collectable debt and are a key focus of our payment and debt strategies. We recognise that small businesses may experience cash flow issues for various reasons at any time, particularly those impacted by the dynamic economic environment as a result of the COVID-19 pandemic.
In response, we have taken a differentiated approach for impacted clients based on their personal circumstances, with consideration given to highly impacted locations and industries. During the year, we:
- provided additional time for 1.4 million small business lodgments and payments
- granted 400,000 small business payment plans tailored to individual circumstances and remitted interest and penalties where appropriate.
Activity | 2018–19 $b | 2019–20 $b | 2020–21 $b |
|---|---|---|---|
Individuals | |||
| 2.9 | 3.8 | 3.7 |
| 0.2 | 0.2 | 0.2 |
| 0.4 | 0.6 | 0.6 |
Small business | |||
| 16.5 | 21.4 | 24.3 |
| 1.4 | 1.2 | 1.3 |
| 3.9 | 4.8 | 4.3 |
Privately owned and wealthy groups | |||
| 5.6 | 7.0 | 8.4 |
| 3.4 | 4.0 | 4.2 |
| 2.8 | 2.8 | 3.0 |
Public and multinational businesses | |||
| 1.1 | 1.3 | 1.6 |
| 6.3 | 5.0 | 6.2 |
| 0.4 | 0.5 | 0.5 |
Not-for-profit organisations | |||
| 0.2 | 0.3 | 0.2 |
| 0.0 | 0.0 | 0.0 |
| 0.0 | 0.0 | 0.0 |
Self-managed superannuation funds | |||
| 0.2 | 0.3 | 0.3 |
| 0.0 | 0.0 | 0.0 |
| 0.0 | 0.0 | 0.0 |
Superannuation funds | |||
| 0.1 | 0.0 | 0.0 |
| 0.0 | 0.0 | 0.0 |
| 0.0 | 0.0 | 0.0 |
Note
(a) The sum of collectable debt, debt subject to objection, review or appeal under Part IVC of the Taxation Administration Act 1953 (TAA) and insolvency debt in this table will vary from the 'Value of debt holdings by main revenue type' table as only the main revenue types are included there.
The proportions of debt accounted for by activity statement debt, income tax debt and superannuation guarantee charge debt are reasonably consistent over time.
Activity | 2018–19 $b | 2019–20 $b | 2020–21 $b |
|---|---|---|---|
Activity statement | |||
| 14.3 | 19.9 | 22.6 |
| 0.9 | 0.5 | 0.6 |
| 4.2 | 4.8 | 4.8 |
Income tax | |||
| 10.8 | 12.5 | 13.5 |
| 10.0 | 9.4 | 11.0 |
| 2.3 | 2.7 | 2.4 |
Superannuation guarantee charge | |||
| 1.1 | 1.2 | 1.7 |
| 0.1 | 0.1 | 0.1 |
| 1.0 | 1.1 | 1.1 |
Note
(a) The sum of collectable debt, debt subject to objection, review or appeal under Part IVC of the TAA and insolvency debt in this table will vary from the 'Value of debt holdings by client experience' table as only the main revenue types are included here.
Determining some debts as either uneconomical to pursue or irrecoverable at law helps ensure we are focusing our collection activities on the right debts.
Activity | 2018–19 | 2019–20 | 2020–21 |
|---|---|---|---|
Value of debt: | |||
| $1.4b | $0.7b | $0.5b |
| $2.8b | $0.9b | $2.9b |
Ratio of debt uneconomical to pursue to ATO net cash collections | 0.3% | 0.2% | 0.1% |
Note
(a) If a decision is made to not pursue a debt on the basis that it is uneconomical to do so, the debt can be pursued at a future time. A debt that is irrecoverable at law is effectively extinguished.
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