$10.5m in MIQ fees now bad debt: MBIE
‘‘Sufficient time has passed to conclude that the debt is likely unrecoverable.’’ Shayne Gray
MIQ general manager Shayne Gray, MBIE
More than $10 million in managed isolation and quarantine (MIQ) invoices have been classed as bad debt, potentially sending nearly 3000 credit scores down as collection agencies continue to pursue them.
The Ministry of Business, Innovation and Employment MIQ general manager Shayne Gray has provided a breakdown of paid and unpaid bills under the Official Information Act.
Those figures show $212.4m was invoiced during the MIQ scheme, of which $187.5m had been paid by mid-January – some after ‘‘debt partners and debt collection agencies’’ had been brought in to help recover $56.5m. Of that, $25.4m was recovered and some were making partial payments.
Nearly 3000 invoices – worth $10.5m – have been classed as bad debt, meaning MBIE rates its chances of getting the money back as very low.
New Zealand’s MIQ system was the country’s front line in the battle to keep Covid-19 from our shores and ran from April 2020 through to the final facility closing in mid-2022.
While mostly successful in keeping the pandemic at bay until the country’s population was largely vaccinated, the system proved highly-controversial as limited capacity meant many people were locked out of their own country for long periods. A ‘‘virtual lobby’’ to get a spot was compared to a lottery by a High Court judge who sided with a group, Grounded Kiwis, arguing against the fairness of the system.
Gray said the chance of recovering the $10.5m in bad debt was ‘‘very low’’ and the Government had written the money off for accounting purposes. ‘‘However, our debt collection partners can continue to investigate people periodically to see whether any new traces have been created.’’
Some of those debtors had likely now left the country, he said.
Unlike the Ministry of Justice or Inland Revenue, MIQ did not have the legal power to dock people’s pay. ‘‘Sufficient time has passed to conclude that the debt is likely unrecoverable.’’
MoneyHub head of research Christopher Walsh said it was likely those bad debts would show up as defaults during credit checks, potentially affecting people’s ability to get credit – ranging from personal loans, to credit cards, to a mortgage.
But it would be down to lenders’ judgment about how bad an MIQ debt was when assessing them for a loan.
Walsh looked at the MIQ data and believed it showed a pipeline of more debtors in-waiting as it appeared there was a total of about $31m in debt –from about 8000 invoices – that was yet to be paid but was not yet classed as ‘‘bad’’.