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Australian State Victoria Writes Off AUD 740m In Bad Fines Debt

Bungled rollout of Fines Victoria's IT system has been blamed for the state government writing off AUD 740 million in "bad debt" 

MELBOURNE, Australia — The Victorian government wrote off AUD 740 million ($573 million) in unpaid fines left to pile up for two and a half years after a department IT system couldn’t produce financial reports.

The bungled rollout of Fines Victoria’s Victorian Infringements Enforcement Warrant (VIEW) system has been blamed for “bad debt” sitting idle from early 2018 to mid-2020.

In that time, quarterly unpaid fine write-offs jumped from AUD 45 million on average to AUD 68 ($52 million)-AUD 76 million ($59 million).

Under Victorian law, “bad debt” is written off after five years as authorities deem fines unlikely to be repaid and don’t always have the means to follow up.

But documents obtained by the opposition under freedom of information laws show the state government could not write off these unpaid fines on its usual quarterly basis due to VIEW’s poor functionality.

When the issue was resolved two and half years later, the state government decided to write off the banked-up AUD 740 million ($573 million) in unpaid fines debt all at once.

In briefing notes prepared for then Attorney-General Jill Hennessy, the Department of Justice and Community Safety  (DJCS) noted it was unlikely the accrued bad debt of AUD 680 ($528 million) to AUD 760 million ($590 million) would be recovered.

“While this approach will attract some media criticism, a communication and media strategy will be developed on issues likely to arise prior to the release of the 2019/20 annual reports,” read the document.

Hennessy then signed off on the recommendation in a letter to Treasurer Tim Pallas in June 2020.

Jill Hennessy, the Department of Justice and Community Safety noted it was unlikely the accrued bad debt of AUD 680 to AUD 760 million would be recovered. (James Ross/AAP Image)

Jaclyn Symes, who replaced Hennessy as Attorney-General in December, claims that the accounting mechanism did not mean the fines were waived.

“We have resources dedicated to recovering those,” she said on May 6.

“We encourage those people to pay them in a timely manner because they don’t go away. If they start to rack up, it can really catch up with you and be quite problematic down the track.”

She claims that the government wasn’t shying away from the “scathing” Victorian Auditor’s General Office (VAGO) report, which laid bare past and ongoing problems with the AUD 79 million ($61 million) over budget IT system.

“It’s functioning, but we’ve still got work to do,” Symes said.

The lump sum write-off of unpaid fines was another example of government wastage that left less funding for schools, ambulances and public transport. (Luis Ascui/AAP Image)

Opposition Leader Michael O’Brien claims that the lump sum write-off of unpaid fines was another example of government wastage that left less funding for schools, ambulances, and public transport.

“This government couldn’t run a chook raffle,” he said.

The new write-off revelations come after a damning VAGO report found the VIEW system was just 26 percent functional 15 months after it launched.

The report claims that this led to the DJCS understating the state’s fine revenue by AUD 91.3 million (70.9 million) in 2017/18 and overstating it by AUD 176.5 million ($137.2 million) in 2018/19.

(Edited by Vaibhav Vishwanath Pawar and Pallavi Mehra. Map by Urvashi Makwana.)

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