Six months after MIQ started deploying debt collectors to chase up unpaid bills, the amount owed has climbed to $38.7 million.
Citizens who use MIQ need to be treated the same, Professor Alexander Gillespie says. Photo: RNZ / Nate McKinnon
Half of that, some 5800 accounts, are more than 90 days overdue - and one expert believes authorities should be charging interest on them.
It comes as the government considers the future of the fees scheme, and prepares for MIQ to be gradually downsized.
Figures from MBIE show the MIQ fees scheme has collected $131.7m to date - yet about one in five MIQ bills remains unpaid.
That is within the government's expectations, according to a briefing given to Covid-19 Response Minister Chris Hipkins in February last year.
In the document, the Ministry of Business, Innovation and Employment said its "underlying assumptions" were that it would need debt collection services for 40 percent of invoices, "and of these, 30 percent would be unable to be collected, and need to be written off".
However, Waikato University law Professor Alexander Gillespie said all returnees need to be treated fairly.
"You've got to treat citizens the same. If some people have already paid their bills, you'd want to make sure that everyone else is treated the same. Otherwise, if they are allowed to default, or the money's not paid then you've got to refund the money to those who played by the rules," he said.
"The important thing going forward is that it is collected. The people who came into MIQ received a privilege that was sometimes to the exclusion of other citizens who wanted to come home. So there was a contract, they got something to benefit and they are obliged to pay back what they received."
To help recover the fees, he said, the government could consider charging interest.
"If you said, 'if you get it to us by this date here, we're not going to add interest on to it', that might be an incentive for some people to think 'okay, I'll just do it.' But then make clear that if they haven't paid by that date they will be pursued by the full letter of the law and interest will be charged at market rates," he said.
An external debt collection agency engaged by the government in July has managed to recover $1.3m in unpaid debt - or get an agreement that it will be paid through instalments.
But NZ Credit and Finance Institute director Owen Goodwin was unsure if handing the overdue bills to a private company was the right approach.
"There's lots of opportunities for them to go and use their own government agencies to collect debt - places like WINZ, MSD or IRD. To give it to an outside company like a debt collection agency I think would probably be the wrong choice. That puts an emphasis on the fact that they're not able to collect their own government debt," he said.
Goodwin believed there wouldn't be so much debt in the first place, if returnees were handed their invoice at the start of their stay.
That's something opposition political parties have spent months calling for, including ACT leader David Seymour
"The fact they didn't bring in pay-before-you-stay when this first became an issue - almost a year ago - speaks volumes to the basic competence of everyday operations of MIQ generally, and this government," he said.
But one returnee, Lara Briden, who flew into New Zealand at the end of last year, said paying after her stay was not difficult.
While the invoice took a long time to arrive, she said she knew what she was in for.
"An email came to the email that I used to book the MIQ spot. I was happy to pay, because I obviously chose to leave New Zealand after a certain date, and for me that was worth it," she said.
David Seymour Photo: RNZ / Angus Dreaver
The government is now having to rethink the fees scheme, before the requirement to go into MIQ is dropped for vaccinated travellers.
It will need to decide whether unvaccinated arrivals going into MIQ should have to pay in full, whether the current fees scheme should remain, which sees people's stays subsidised - or whether their stay should be free.
Authorities say they haven't made any decisions yet.
Seymour is against the idea of unvaccinated people having to pay - in fact, he's against MIQ continuing, at all.
"I'm not sure there's a justification for MIQ continuing at all, when the requirement for people who have Covid-19 is to isolate at home. Why would we make people who don't have Covid-19 go through MIQ? It almost seems like a deliberate and divisive punishment rather than a public health measure."
Currently the MIQ fee for one New Zealander is $1610, and the fee for a temporary entry visa holder or critical worker is $2760.