As we enter the second month of the year the economic indicators keep pointing to high levels of business activity as well as public confidence in our economy. As I’ve mentioned in earlier letters, consumer ‘confidence’ is a factor most economists refer to as the single most important dynamic for a strong economy.
Australia’s surprisingly earlier than expected upward climb in economic activity, including some relatively good employment signs, the rise in the property market as well as high levels of householders’ confidence in their personal finances, is cause for collective sighs of relief. These factors help the government justify ending its suite of costly pandemic subsidies that have been such a lifesaver to many businesses and households. Despite calls to rethink their ending from important sectors like hospitality, tourism and transport, the Prime Minister and Treasurer appear firm; they are not budging on bringing to an end the Jobkeeper payments.
Banks and other creditors are also winding down mortgage support packages and focusing on recovering the debts. The same goes for Centrelink, which has ceased the so called ‘pause on debt recovery’.
"We must always remember that while the headlines signal better than expected economic recovery, there are still a large number of people and businesses that are struggling."
This all points to a focus on our industry and the way we service both our clients and their debtors, with whom we must work with to secure payments. Our commitment to ethical and sensitive recovery processes must never be relaxed. Rather, we need to be even more vigilant in providing sound, considerate advice and acting accordingly.
As the AICR continues to stress, there are still options for those who receive those ominous letters and emails reminding them that debts now need to be paid. The first, and most obvious, is that debts don’t always need to be paid in one go. There are numerous routes for repayment.
The key is to keep communicating and to develop a plan. That goes for debt recovery professionals too. We must always remember that while the headlines signal better than expected economic recovery, there are still a large number of people and businesses that are struggling. Combined with the genuine fear of COVID-19 circulating in our community and the concomitant uncertainty inherent in the spectre of lockdowns, border closures and ‘no go areas’, these pressures are real.
We also appreciate that small businesses and lone operators continue to suffer from some of the late payment options that are being entered into. I have written about the likely rise in small business failures this year as the regulatory buffers and subsidies the government introduced are removed.
Small businesses are increasingly threatened by delays in payment of their invoices. Even larger operations, like local government bodies and the communities they serve, feel the effects of not having fees and services paid.
We walk a fine line. It is incumbent on debt recovery specialists to ensure that repayment plans are realistic for both the creditor and the debtor.
Yours sincerely,
Brian Carter
Chairman