The economies of Australia and New Zealand are currently not in crisis. That is precisely why collections leaders should be paying close attention to the war in the Middle East. The bigger risk for the rest of 2026 is not an economy already in freefall. It is a fresh external shock hitting households that were only just beginning to stabilise after a long period of cost-of-living pressure.
That is the context in which debt management, collections and recoveries teams now need to think. The IMF’s April 2026 World Economic Outlook could not be clearer: the global economy is now operating “in the shadow of war,” with the Middle East conflict threatening growth, disinflation, and financial stability. Its core warning is highly relevant for Australia and New Zealand. Even if the conflict remains limited, rising commodity prices, firmer inflation expectations and tighter financial conditions can still weaken household resilience. If the conflict is prolonged or widens, the downside risks become much sharper.
For Australia, the starting point is relatively resilient, but far from comfortable. Unemployment remained at 4.3% in March 2026, and annual wage growth was 3.4% in the December 2025 quarter. On the surface, which looks reasonably healthy. But inflation has not disappeared from the household budget. Annual CPI was still 3.7% in February 2026, with housing the largest contributor. That is not a picture of collapse. It is a picture of households that still have only limited room for another hit to essential spending.
New Zealand’s position is softer. In April 2026, the Reserve Bank of New Zealand held the OCR at 2.25% but said events in the Middle East had “materially altered the outlook” for inflation and growth. It explicitly warned that the conflict had disrupted global supply chains and pushed up prices for oil and refined petroleum products, with the balance of risks to future oil prices tilted upward. At the same time, Stats NZ’s March 2026 CPI summary showed annual inflation at 3.1%, with electricity up 12.5% and local authority rates up 8.8%. Again, this is not a collapse scenario. It is a low-margin household environment.
That is why the Gulf shock matters so much for collections operations in Q3 and Q4 2026.
The point is not simply that oil prices may rise. The point is how quickly a conflict-led energy shock moves through the household budget. Higher fuel costs become higher transport costs. Those become more expensive food, goods, and services. Freight, packaging, and input prices start to move. Confidence weakens. Central banks become more cautious. The result is not necessarily a dramatic credit event. More often, it is a steady deterioration in affordability, payment consistency, and willingness to engage. That is where the collections challenge begins.
This is the scenario that operational leaders need to plan for now. Not mass default overnight, but a change in the shape of arrears.
More customers will still be employed, but less liquid. More will still be paying, but only selectively. More will start to prioritise rent or mortgage, power, transport, and groceries ahead of other obligations. More will move in and out of delinquency rather than falling neatly into traditional collections patterns. And more customers will present as vulnerable not because of a single life event, but because repeated cost shocks have removed all slack from the household budget. That is a different kind of collections environment, and it requires a different operating response.
This is also where many organisations get caught out. Traditional collections models are built to detect distress once it becomes visible in delinquency. But a conflict-driven affordability squeeze shows up earlier and more subtly. It appears in broken promises, rising part-pay behaviour, lower response rates, repeated payment-plan resets, and customers who are technically current but visibly struggling. If firms wait for classic late-stage arrears signals, they are likely to intervene too late.
The good news is that Australia and New Zealand are not starting from zero. There are already meaningful support frameworks in place.
In Australia, the Australian Energy Regulator requires retailers to maintain approved hardship policies with early response processes, flexible payment arrangements, concession and financial counselling signposting, checks for better plans, and disconnection only as a last resort. The ACMA’s Financial Hardship Industry Standard similarly requires telcos to promote accessible assistance, proactively identify customers who may be in hardship, provide realistic and tailored support, and take reasonable steps to keep customers connected.
In New Zealand, electricity retailers must comply with Consumer Care Obligations designed to help residential customers maintain an affordable and constant electricity supply, minimise harm caused by payment difficulties, and support customers to stay connected and manage bills. Alongside this, the Winter Energy Payment continues to provide seasonal support from 1 May to 1 October each year for eligible households. These measures matter, especially in a winter period where energy and affordability pressures can compound quickly.
But support frameworks alone will not be enough for modern collections operations if the external shock persists. That is why the real question for collections and recoveries leaders is not whether they already have hardship policies. It is whether their operating model is fast enough, flexible enough and intelligent enough for what may be coming next.
The organisations that perform best through the rest of 2026 are unlikely to be the ones that simply intensify collections activity. They will be the ones that identify emerging stress earlier, route customers into support sooner, and design treatments that reflect unstable affordability rather than fixed repayment capacity. In practical terms, which means shorter-cycle arrangements, more realistic partial-pay options, easier plan resets, better payment-date alignment, clearer communications and much earlier triage into vulnerability or hardship support. It also means treating essential-service collections differently from standard unsecured collections, because the conduct risk is higher, the regulatory scrutiny is greater, and the customer harm can escalate faster.
This is also where AI has a genuine role to play, provided it is used properly. The most useful use cases are not fully automated decisions on vulnerable customers. They are earlier warning, better orchestration, and greater consistency: detecting affordability stress sooner, guiding agents to the right treatment paths, summarising interactions, improving next-best-action decisions and helping firms intervene before the account becomes materially worse. Regulators and policymakers are already moving in this direction. The FCA’s second AI Live Testing cohort includes customer-facing and credit-related use cases, while the OECD’s Consumer Finance Risk Monitor warns that digitalisation and AI can help, but can also deepen harm where support is opaque, poorly designed, or too difficult for vulnerable customers to access.
That is the real leadership challenge for the second half of 2026.
Australia and New Zealand do not need to fall into recession for overdue accounts to rise materially. A prolonged Gulf-centred war can still create a damaging chain reaction through fuel, freight, utilities, food, confidence, and rate expectations. In economies that are challenged but not yet precarious, that kind of second shock can be enough to push more households from “just managing” into “starting to miss payments.”
For collections leaders, the message is straightforward. Do not wait for crisis conditions before acting like conditions have changed. The next phase of pressure may not look dramatic in the macro data at first. But it could still reshape customer behaviour, arrears performance and vulnerability risk across Q3 and Q4. The firms that respond best will not be those that collect hardest. They will be the ones that recognise the budget shock earliest, adapt quickest, and prove they can protect both customer outcomes and cash flow in the same operating model.
Talk to an EXUS expert to explore how you can strengthen your collections strategy and prepare for evolving economic and regulatory pressures.