As Australia slowly begins moving to some sort of normal business, social and education activity following the pandemic lock down, some governments have moved to legislate against active debt recovery, particularly with council rate defaults.
In NSW, for example, legislation recently passed the parliament (sitting for only one day this month) to stop councils from taking any legal action against homeowners and businesses who have not paid their rates as a result of financial difficulties during the lockdown.
The AICR has always maintained that it is paramount that tolerance and understanding – particularly with debt recovery – should be shown to all businesses and households suffering hardship.
"Many of our members have advised their clients to widen hardship provisions and err on the side of leniency."
In my letter last month, I noted the welcome payment and debt relief options that businesses and government agencies have offered those who have lost income as a result of the pandemic lockdown.
Some state governments introduced regulations to allow local governments to show leniency when it came to rates. Councils delayed sending rate notices, and also added extra time on the due dates for payment. The NSW regulation, set to last until September 2021, is an extension of those regulations.
Whilst the AICR understands the pressures on councils to continue to provide services and facilities with limited funds, we are also mindful of the stress and anxiety increasing levels of debt can cause at this time.
Throughout the lockdown period, the AICR has been urging our industry to think carefully about actively pursuing debt recovery. Indeed, many of our members have advised their clients to widen hardship provisions and err on the side of leniency.
These are all welcome steps as we tread carefully back to economic recovery.