March 24, 2023
First it was COVID,now it is a double dose of inflation & interest rates causing a new wave of hardship for Australian ratepayers.
According to a new survey conducted by NAB, 20% of Australians have been unable to pay their mortgage or a critical bill at least once during the last three months.
As stress mounts, the challenging part for local government leaders is knowing exactly how “big” this problem actually is within their local community.
Regardless of market conditions, two types of ratepayers will always exist in any economic climate.
Top ratepayers (referred to herein as ‘green’ ratepayers) are those individuals who despite market conditions will always pay on time. This is due to a number of factors including high household income, high household savings, psychological attributes (i.e. organised personality) & payment history. Green ratepayers account for approximately 3-8% of the total ratepaying population.
Negative ratepayers (referred to herein as ‘red’ ratepayers) are those individuals who are already in a state of financial stress despite market conditions. This group also includes individuals who do not treat their financial obligations to third parties seriously and are often in periods of arrears & default. Red ratepayers account for approximately 3-5% of the total ratepaying population
Unlike red and green ratepayers, the vast majority of individuals are classed as ‘invisible.’ This means that both their level of payment stress and ability to pay is completely unknown. The only indicator councils can use to determine this is historic payment data, however this is often hard to access in ERP/CRM systems and even then, only indicates whether a ratepayer has been in arrears historically, not whether they are likely to be facing stress now.
In times of economic hardship, a higher percentage of the population shifts over time from the green & invisible zone to the red zone. This has several impacts on councils:
Rather than responding to changing market conditions reactively; councils can become proactive by using technology like Payble to reach out to ratepayers to determine their level of financial wellbeing before events like arrears come into play. In this way, options can be prepared and offered to reduce payment stress & reduce the future burden on the individual & council management.
In addition, if this technology is used regularly, councils can even begin to predict payment failures and arrears before they happen!
Using the Payble Pulse feature - you can determine the level of stress for your residents in three easy steps.
Upload a CSV of your resident data or connect our platform to a tool like Infor Pathway, TechnologyOne or Civica Authority
Get in touch with us here and we can set you up with a free version of the Payble Pulse tool & also demonstrate our other products driving value for local government bodies around Australia
The Victorian Minister for Local Government, Shaun Leane, has introduced legislation into Parliament to help define ratepayer financial hardship policies for councils. “We know that many Victorians are doing it tough and that’s why we are working to reform the rating system,” said Minister Leane.
We're proud to feature an insightful foreword from Dominic Natoli, Head of Local Government at Commonwealth Bank, as we reached out to over 200 local government leaders in order to uncover how COVID has impacted local communities, and the measures LGA leadership undertook to adapt to these effects.