I write as Victoria emerges from another period of lockdowns after COVID-19 infections swept the state, and even moved up the coast to southern NSW holiday centres.
Our hearts, thoughts and best wishes go out to families and businesses who have been enduring terrible stress and fears about their health, work and business futures and, of course, their financial security.
“Households might be spending on home holidays, restaurants and retail, but unpaid bills are still mounting. Debt remains difficult to recover.”
For our industry, it means curtailing recovery actions during these times. This is not just to comply with the government restrictions, but to continue our mission to be sensitive to the strains and limitations businesses and households are enduring. Many people will have less opportunity to meet their basic financial commitments.
Meanwhile we are told that Australians are better off now than they were before COVID-19 invaded our shores. The data says so. Australia boasts that our strong economic growth has put us amongst an elite group of nations that have actually grown rather than shrunk during the pandemic. Our borders have been closed to big spending tourists, our education sector to foreign students and farmers to fruit-picking backpackers, but we home-bound Aussies have been saving and spending at record amounts. Or so we are told.
Collection industry professionals are not seeing such a rosy picture.
Households might be spending on home holidays, restaurants and retail, but unpaid bills are still mounting. Debt remains difficult to recover.
This is even more so for collection customers in the service sector, like local governments. Some regions are experiencing record levels of unpaid rates and services as households – hit hard by lock downs and uncertain employment – simply have not met their payments. Many families and businesses don’t have the income or certainty they once had. Food, rent and even mortgage payments will always have priority for dwindling incomes, over meeting credit card, rates and tax bills.
Certainly, there appears to be a correlation between lockdowns and household debt. Until we have widespread vaccination, local and some state government bodies will have to continue to be patient as their residents apply for hardship provisions or ignore requests for payment. In my experience, local councils have been sensitive to the financial constraints many of their ratepayers (residents and businesses) are enduring during the pandemic. But how long can they continue to keep funding basic community services when rates and services are not being paid?
This uncertainty will be with us until our vaccination rates rise. The OECD and a number of global bodies have released reports that show that. And anecdotally, once struggling economies like the United States and United Kingdom have improved as each nation’s vaccination levels has risen. The reality is that financial security will not happen without vaccination.
Yours sincerely,
Brian Carter
Chairman