Page 2611 - Week 09 - Wednesday, 7 August 2013
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NOWaste has cancelled all credit accounts, which is in fact not the case. Over 500 customers continue to be allowed to access credit accounts for use of ACT NOWaste facilities. This means that these customers use the services and at the end of the month ACT NOWaste issues an invoice and the customer has 30 days to pay it.
At the end of the 2012 financial year, unpaid and overdue debts had risen to over $4.5 million, with normal recovery actions, the suspension of accounts and proactive action to establish repayment plans having had little impact on their recovery. Today, 44 per cent, or 186 of the 420 active accounts, are in arrears, with over $2 million overdue. As a result, ACT NOWaste has suspended the establishment of new credit accounts, to assess the significant risk and liability exposure of the ACT government.
Over the past 18 months, the government has devoted considerable resources to identifying, managing and collecting overdue accounts, including appointment of additional dedicated debt recovery staff. The direct cost of these additional debt recovery resources has been over $100,000, excluding the not inconsiderable debt recovery charge, up to 20 per cent, on amounts referred to a debt collection agency.
I do note that in an online interview with Mr Tony Ozanne, Mr Wall stated:
A trend that we and many other businesses are experiencing is the increased challenge of collecting payment for services rendered. Keeping on top of this is often time consuming but it is essential to maintain cash flow.
It is precisely these difficulties and the time consuming nature of this collection of payments for services that Mr Wall outlined in his interview that have rendered it necessary for ACT NOWaste to insist on immediate payment for services where an account is too small to justify a credit account or where the time spent collecting overdue payments becomes excessive.
Despite the endeavours that the government has undertaken to manage this, it has been required to write off in excess of $300,000 in debts, enter into payment plans for the recovery of over $200,000 and, for delinquent accounts, both bar the account and refer the outstanding debts of over $800,000 to a debt collection agency. I must emphasise that no customer account has been barred where a customer has maintained a satisfactory payment history.
The suspension of new accounts is to enable ACT NOWaste to review the risk to and liability exposure of the territory. This review will include an assessment of the activity level required to make it cost effective to maintain accounts. This review will be completed by the end of September 2013, with a customer consultation process to follow in October.
Many existing NOWaste customers use cash, EFTPOS and credit cards to manage their cash flow at ACT resource management centres. I continue to support small and medium businesses. However, it does not serve the greater community well if the government is required to increase waste disposal fees and charges to fund bad debts and business cash flow. The review will include a robust analysis of existing account performance trends, as well as government risk and exposure, and recommend a way forward that protects the interests of all parties.
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