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Speaker 1: Now the iidea back in what appears to be a

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Speaker 1: concerted effort to hoover up the money we owe them.

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Speaker 1: There's a crackdown on unpaid tax. The budget handed them

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Speaker 1: an extra thirty five million dollars a year to boost

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Speaker 1: the tax compliance and collection activities. The IID Commissioner is

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Speaker 1: Peter Mercy, and he is, well, there's Peter. Morning to you.

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Speaker 2: Good morning, Mike.

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Speaker 1: I must congratulate you, generally speaking, because I haven't spoken

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Speaker 1: to you as far as I know ever, but you

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Speaker 1: seem to be collecting huge amounts of money at the moment,

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Speaker 1: and something's happened. What's happened?

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Speaker 2: Look, I think a couple of things. One is, about

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Speaker 2: ninety four percent of New Zealanders pay their tax in

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Speaker 2: full and on time. So we have a system that

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Speaker 2: works very well. It brings on the bulk of our tax.

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Speaker 2: But it's fair to say that through COVID we took less,

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Speaker 2: we took away our focus from some of our compliance activities,

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Speaker 2: and that was quite deliberate as we came out of COVID.

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Speaker 2: So from the beginning of twenty three we've started to

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Speaker 2: put greater focus on our compliance activities right across the board,

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Speaker 2: reminding people their obligations, but actually doing a lot more

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Speaker 2: audits and investigations and making sure that we are there

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Speaker 2: when they need us.

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Speaker 1: Okay, so that's a nice way. But were you under

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Speaker 1: instruction to take it easy during COVID. Basically no.

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Speaker 2: Look, I wasn't there at the time, But my understanding

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Speaker 2: was that because of the economic uncertainty that existed at

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Speaker 2: the time, it was very difficult to tell whether entities

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Speaker 2: were in financial strife because of an unusual event and

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Speaker 2: that they were fundamentally sound, or whether they were actually

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Speaker 2: not viable. Now, our legislation requires us to maximize revenue

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Speaker 2: over time, so if an entity is financially viable, we

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Speaker 2: want to help them back to get back to being compliant.

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Speaker 2: During that period, it was very difficult. So I think

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Speaker 2: one of the consequences of that, though, is that as

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Speaker 2: we started to ramp up compliance from the beginning of

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Speaker 2: twenty twenty three, not only were we finding those businesses

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Speaker 2: that during COVID, frankly you were not viable, but also

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Speaker 2: you get the double whammy because then the economic situation

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Speaker 2: at the time during twenty twenty three to four, etc.

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Speaker 2: You have other firms that get into trouble, So there

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Speaker 2: was probably a bit of a backlog that built up

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Speaker 2: during COVID, but I don't it was very hard to

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Speaker 2: tell who was sustainable and who was not.

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Speaker 1: There seems to be a technological leap in there somewhere.

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Speaker 1: Am I correct in saying that you seem to have

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Speaker 1: got a new computer or something.

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Speaker 2: Yes, well it's more than a new computer. We did

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Speaker 2: what was called business transformation, so at one point two

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Speaker 2: billion dollar change, which was more than just it. We

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Speaker 2: completely redesigned the way in which we think about tax

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Speaker 2: to try and make it a lot easier, a lot

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Speaker 2: more automated. It does mean that we can make tax changes.

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Speaker 2: For example, if the government makes, for example, investment boost,

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Speaker 2: we can make that change much more quickly than we

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Speaker 2: used to. But fundo entity, it means that the computer

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Speaker 2: and our systems are doing much more automatically than they

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Speaker 2: used to. They can screen gest forms that come through,

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Speaker 2: for example, and identify those that are unusual, so we

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Speaker 2: have much better systems in place.

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Speaker 1: Are you cracking down on the lay about students who

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Speaker 1: have scarped and not paid what they are.

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Speaker 2: Yes, we had a particular focus on overseas student loan borrowers.

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Speaker 2: Last year. We've had a forty three percent increase in

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Speaker 2: the amount of money we've received in the nine months

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Speaker 2: this year as a result of that crackdown. And look,

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Speaker 2: we're actively continuing to pursue conversations with those people, many

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Speaker 2: of them. Once we get in touch with them, we

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Speaker 2: can set up repayment arrangements and so on. But look

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Speaker 2: for those that deliberately choose not to make their payments,

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Speaker 2: we have whole range of strategies, including contacting them as

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Speaker 2: they come back to New Zealand, and we do have

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Speaker 2: the potential to arrest them at the border of necessary.

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Speaker 1: Where are we at the bankruptcy business and in the cycle,

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Speaker 1: in other words, are you seeing some sort of through

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Speaker 1: the worst of this or we've still got some ways

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Speaker 1: to go in terms of people who are going to

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Speaker 1: go to the war.

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Speaker 2: Yeah. Look, I think if you look at what's happening

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Speaker 2: to the economy more generally, we are starting to come

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Speaker 2: out of what the of the recession. What you get

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Speaker 2: from the liquidations and bankruptcy perspective, as you do get

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Speaker 2: a lag so I would expect to continue to see

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Speaker 2: that increasing over the next six to twelve months. Really

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Speaker 2: as a lag out of that previous economic cycle. I

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Speaker 2: also think because we are putting more effort and focus

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Speaker 2: into that area, that is also listed the number of

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Speaker 2: businesses that find themselves in that situation.

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Speaker 1: Not that this is real, but let me ask it,

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Speaker 1: because it's fun Friday anyway. If you could magic today

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Speaker 1: all the money that's owed, and that's all the student debt,

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Speaker 1: all the child support particularly, etc. How much is out

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Speaker 1: there to be collected.

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Speaker 2: Well, that's a really hard question to answer. So we

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Speaker 2: don't really know the size of that gap. You know,

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Speaker 2: we know that people are us around nine billion dollars.

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Speaker 2: That's a lot of money. So even if everyone who

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Speaker 2: owed us money went through that process and paid it back,

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Speaker 2: that would be nine million dollars nine dollars. So yeah,

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Speaker 2: there's a bit out there.

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Speaker 1: It's a lot of money. Appreciate it very much. Peter Mercy,

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Speaker 1: who is the he's the head of IRD, I must

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Speaker 1: say in my dealings with them in the last couple

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Speaker 1: of years, not that it matters that much, but I

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Speaker 1: for a while they've got refunds, and then that changed anyway,

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Speaker 1: so I don't get them anymore. But when it used

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Speaker 1: to be, when I got some refunds, they would take weeks,

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Speaker 1: if not months, to pay. So in other words, when

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Speaker 1: you owe them money, they give you a time and

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Speaker 1: a date and held pay if you don't do it.

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Speaker 1: When they owed you money all of a sudden, we'll

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Speaker 1: get around of it sometime. But that all changed and

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Speaker 1: they improved themselves. And I've had nothing but very pleasant

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Speaker 1: and useful dealings with the IID for a number of years,

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Speaker 1: which is good. I mean, I pay far too much tax,

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Speaker 1: of course, but that's not their fault. That's the governments.

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