Only a third of travellers staying at quarantine hotels have paid their bills, with almost $20 million still outstanding.
Experts and travellers have told the Herald they were stunned at the loose policy, which gives new arrivals and returning Kiwis 90 days to pay their fees after leaving managed isolation and quarantine (MIQ) – and allows them to leave the country again without paying.
New Zealand residents going overseas for less than 90 days, and all non-NZ residents, have been supposed to pay $3100 for quarantine since August 11.
But the Ministry of Business, Innovation and Employment (MBIE) says only a third of the amount billed for quarantine up to February 28 – $10.7m out of $30.2m – has been paid so far.
The explanation is the terms of payment – invoices ask for payment within 90 days, and the ministry says no one has been referred to a debt collection agency because any decision to enforce debt collection “would only occur after 180 days from when the invoice was issued”.
New Zealanders who have not paid their MIQ debts can even leave the country again, because there is nothing in the regulations to stop them.
NZ Credit and Finance Institute director Owen Goodwin said he was “startled that there is that level of time lag between invoicing and payment”.
“I would have thought that when you leave a hotel you basically pay on the spot,” he said.
Act Party leader David Seymour said: “I can’t believe that the Government is giving them 90-day terms. What are they, Noel Leeming?”
Auckland paediatrician Professor Innes Asher, who visited her son and his wife and young child in Sydney for Christmas, said she expected to pay the $3100 fee when she left the M Social quarantine hotel on the Auckland waterfront on January 12.
Instead she was told she would get an invoice. When the invoice had not arrived three weeks later, she emailed the ministry to ask for it.
“I was shocked, because we know how much it’s costing the country,” she said.
The Government has budgeted $499m to pay for the managed isolation and quarantine (MIQ) system, which is free for NZ residents who have not left the country since August 11 and are returning for more than 90 days.
Asher said everyone she spoke to in her group at the M Social seemed to be returning from short-term trips overseas.
“There were a number of people like me – grandmothers with children in Australia or people who had gone to see sick relatives.
“I just assumed we would be invoiced either on arrival or on departure, so I was deeply shocked as a conscientious citizen to learn that there was no decent system to get me to pay.
“I said, ‘When do I get to pay the bill?’ They said, ‘Oh, that’s MBIE.’ It was kind of weird – you’d never leave a hotel without paying, would you?”
When she emailed to ask for an invoice on February 2, an MBIE official replied: “Our fees team is a little behind with emailing invoices at the moment unfortunately. How[ever] if you wish to have your fees paid asap, please email our fees team to arrange to have that done, [email protected]”
Asher said, “The next day I got an invoice anyway and I had 90 days to pay.
“I had already set aside the money so I paid immediately, but it’s a recipe for bad debts because people will forget to pay.”
Goodwin said a 90-day credit period was not unusual because there was a wide range of credit arrangements in different industries, but hotels normally expected to be paid on departure.
“Clearly the hotels are all being paid by the Government for the accommodation immediately so they are not out of pocket, but obviously the NZ taxpayer will be out of pocket for 90 days,” he said.
Waikato University law professor Alexander Gillespie said the rules should be tightened so that travellers could not leave the country again without paying their MIQ fees.
“To my mind it is fundamentally unfair that people can rack up a bill like that and just leave the country without recompense,” he said.
Seymour said travellers should have to pre-pay at least part of the fee.
“If people can afford to pay for MIQ, they can afford to pre-pay,” he said.
National Party Covid response spokesman Chris Bishop said 90-day payment terms were “broadly reasonable” but the ministry should consider collecting credit card details when people booked MIQ, as hotels do for normal bookings.
He said people who leave the country with unpaid MIQ fees should be pursued in the same way that Inland Revenue pursues student loan debt.
MBIE said it issued 8419 MIQ invoices up to February 28 – apparently for just over 10 per cent of the 79,841 people who passed through MIQ between August 11 and the end of February.
It received 4461 applications for the fees to be waived on various grounds, such as being partners or children of NZ residents returning permanently. It approved 3473 waivers and was still considering 109 applications on February 28, suggesting that 879 applications for fee waivers were rejected.
There were 893 invoices totalling $3.1m classed as “overdue” on February 28, meaning that they had not been paid within 90 days.
The ministry said travellers who were invoiced were sent a reminder 30 days before the 90-day due date, “including details of how to pay, how to apply for an instalment plan, and what to do if the person considers they are not liable or are exempt”.
“After the due date a further letter will be sent requesting payment. This letter will also contain details about how to apply for an instalment plan,” the ministry said.
“If the person does not contact or pay, a decision will be made about the most appropriate course of action. Options include debt collection agency referral or court action. This decision will be made applying a consistent set of factors and would only occur after 180 days from when the invoice was issued.
“The regulations in their current form do not empower us to stop people leaving the country if they have not paid their MIQ charges.”
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