Covid 19 coronavirus: $38 million in unpaid managed isolation fees, despite Government calling in debt collectors

The Government has barely made a dent in the money owed in overdue managed isolation fees despite bringing in debt collectors.

Newstalk ZB can reveal as of the start of this month, $38 million in MIQ fees remains unpaid - $8m of that is considered overdue.

That's close to 10 per cent of the total $100m so far charged to those arriving from overseas.

Covid Response Minister Chris Hipkins revealed in May that the Government was bringing in debt collectors to chase the overdue money.

But so far, just $50,000 has been reclaimed.

Covid-19 Response Minister Chris Hipkins during a Covid-19 and vaccine update at Parliament in Wellington. Photo / Mark Mitchell

National's Covid-19 spokesman Chris Bishop said the MIQ system has been in place since August last year and the Government has waited too long to try reclaim these overdue funds.

"We use debt collectors for student loans, for example, and at the end of the day this is money owed to taxpayers," he told ZB.

"I think the Government should have been using debt collectors far earlier than now."

Acting Joint Head of Managed Isolation Andrew Milne said he will be sending more invoices to the debt collectors at the end of this week.

From then, he says, he plans to continue sending "small batches out every week".

"All businesses and Government agencies deal with overdue debt – this is to be expected – and we're very focused on pursuing any overdue money."

In May, the Government confirmed it would take a harder line when it comes to money owed.

A security guard on duty outside the Grand Mercure hotel in Wellington, which is one of the managed isolation hotels for returning New Zealanders. Photo / Mark Mitchell

In early June, it sent 100 invoices to debt collectors to track down the overdue funds.

Those invoices, according to Milne, were worth $332,000.

But of those 100, just 28 responses have been received and $49,000 has been recovered.

A further $42,000 is "currently being disputed by customers".

That means $7.95m remains outstanding.

Despite this, Milne said the vast majority of those coming through MIQ understand the need for these fees and are paying their bills on time.

He said handing over invoices to an external debt collector was a serious step with potentially serious impacts on someone's credit rating.

"So we want to be completely sure the invoices we send for debt collection are genuine unpaid debt so we have taken [the] time to make sure we get this right."

Meanwhile, Newstalk ZB can also reveal there was a significant spike in the number of MIQ invoices issued in June.

National Party Covid-19 spokesman Chris Bishop speaking in Parliament. Photo / Mark Mitchell

There were more than 6000 invoices sent out that month – that's 30 per cent of the overall 23,000 issued to date.

Milne said the reason for the increase was a system overhaul, which helped automate the programme.

"The fees regime was set up at pace, and at a time when it was unclear how long it would be needed."

He said the system has been heavily reliant on manual processing of data coming from various agencies that weren't always accurate or complete.

New funding has meant a new "streamlined" system making it quicker and more precise.

But Bishop said the fact that this was only happening now was problematic as it could mean millions of dollars worth of fees could have been missed.

"We need to know how many people they haven't invoiced to find out how much money the poor, long-suffering taxpayer missed out on because the Government hasn't been issuing invoices properly."