The securing of the ATO contract sees CLH join three other companies on the ATO Debt Recovery Panel.
Media reports at the time indicated that CLH would begin its term in April 2016.
I've found it impossibly to value the impact this will have to FY17 earnings. During my research I came across a 2012 audit report of the Debt Revovery programme & include excerpts from it below.
"External Collection Agencies (ECA) are paid a flat fee for each debt referred, irrespective of the outcome achieved."
"The ATO is now in the fifth year of referring lower value, non complex income tax, activity statement and superannuation guarantee charge debt cases to ECAs for collection action, employing a correspondence and telephone based approach. The initiative provides the ATO with a flexible mechanism to action a workload that would otherwise remain unactioned. During the period of the outsourced arrangements (from October 2007 to 31 December 2011), the ATO has referred just under 1.8 million debt cases, with a combined value of approximately $7 billion, to the ECAs for collection action. Of this amount, the ECAs have collected just over $2 billion, or 29.1 per cent of the total debt referred, at a cost of $54 million in ECA fees. In approximately 50 per cent of referred cases, ECAs achieve either payment in full, or negotiate payment arrangements with taxpayers."
CLH Price at posting:
$1.76 Sentiment: Buy Disclosure: Held
