Management of debt and unfiled returns

This measure demonstrates the cost-effectiveness of our work to recover assessed revenue from returns not filed by the due date.

We use our advanced analytical tools to identify unfiled returns that are likely to be of a higher value, and we’re finalising more high-value returns through our Budget 2018 initiatives work.

We are increasing the target for this measure from $40 to $45 for 2021-22.

Not achieved - The average cost of finalising an unfiled return decreased from last year. This measure demonstrates the cost-effectiveness of our work finalising returns not filed by the due date.

We focus on finalising unfiled returns with value attached, rather than those which are less economical to pursue. Through our advanced analytics, we can now identify those unfiled returns that are likely to be of a higher value. As we leverage information collected by our systems to determine customer obligations and entitlements, the volume of unfiled returns decreases.

This measure relates to the volume of filed returns rather than value and is no longer fit for purpose. We’re retiring this measure for 2021-22. Our ‘value of assessed revenue for every unfiled return dollar spent’ measure is more appropriate.

Not achieved - The percentage of unfiled returns finalised within 6 months increased from last year. This measure demonstrates the effectiveness of our activities to help customers with unfiled returns.

To support customers through COVID-19, Release 4 of our transformation programme and automatic income tax assessments, we reduced our focus on compliance activities. We’ve now resumed compliance activities and are revising our strategy for managing payments and assessments.

Transformation has allowed us to automatically determine more customer obligations and entitlements using information we already have. Because of this, we’re moving away from requiring all customers to file returns. Consequently, the volume of unfiled and late-filed returns is decreasing: 566,922 returns were late in 2019-20, compared to 547,071 in 2020-21.

Not achieved - The percentage of collectable debt value over 2 years old increased slightly from last year. This measure looks at how much of our collectable debt is aging and, therefore, becoming harder to collect.

With the introduction of automatic income tax assessments in 2019, we have more customers receiving an annual tax assessment and, as a result, an increasing number of customers with debt.

Collectable debt includes student loan debt, which contributes to a high proportion of debt over two years old. Most is owed by overseas-based borrowers and is harder to collect. Student loans cannot be written off as bad debt (with limited exceptions such as for death or bankruptcy).

We’re removing student loan and Small Business Cashflow (loan) Scheme debt from the measure for 2021-22 and, therefore, tightening the target to 40% or less. To maintain visibility of student loan performance, for 2021-22 we’re introducing a new measure: ‘percentage of student loan customers that meet their obligations’.

Not achieved - The percentage of new customer debt resolved within 6 months decreased from last year. This measure focuses on customers who have recently gone into debt and the debt being cleared in a timely manner.

To support customers through COVID-19, Release 4 and automatic assessments, we reduced our focus on compliance activities, helped customers set up instalment arrangements and provided other relief options. We did not run our usual 7 February and 7 April payment reminders and paused automatic deduction notice processes. Automatic assessments for individual income tax brought more customers with debt into the system.

In 2021-22, we’re decreasing our target to 50% and removing student loans and Small Business Cashflow (loan) Scheme loans from the measure. Removing these products from the measure will provide better visibility of tax debt categories that we can influence directly.

To maintain visibility of student loan performance, for 2021–22 we’re introducing the measure: ’percentage of student loan customers who meet their obligations’.