Debt A Blight For A Third Of Households

Forecasts that more than one third of Kiwi households will resort to credit to pay their bills in the coming months are troubling Anglican Church leaders.

Stats released this week by Dun & Bradstreet, the debt collection and credit rating company, show that 36 percent of the 1000 adults they surveyed feel they will have no choice but to rely on credit to make ends meet in the coming months.

The Consumer Credit Expectations Survey reveals, too, that one in five households (18 percent) expect their debt levels to rise during the September quarter – partly on the back of the Reserve Bank’s recent interest rate rise.

The D&B survey also shows that some consumers are veering back into what it calls “a credit-fuelled lifestyle” after a period of restraint. They’re planning to buy big-ticket items either with credit cards, or on interest-free deals.

That increasing reliance on credit concerns the Rev Dr Anthony Dancer, the Anglican Church’s Social Justice Commissioner.

“The survey confirms,” he says, “that there’s a growing group of us who can’t make ends meet. And it also suggests that there are folk whose desire to acquire and spend is so great that the lessons of the credit crisis are flying out the window.”

But what really disturbs Anthony Dancer is the plight of those on the bottom rung of the ladder.

The people who don’t have access to credit cards, who don’t qualify for a WINZ Special Needs Grant – sought, say, to pay for a funeral, or to fix a broken-down car, or to deal with a health emergency – and who therefore are falling prey to loan sharks.

Dr Dancer is disappointed that National and Act last night used their Parliamentary majority to defeat a Labour MP’s private member’s bill that would have stopped loan sharks from charging outlandish interest rates.

“Carol Beaumont’s Consumer Credit (Responsible Lending) Bill didn’t offer all the solutions,” he says, “but it was a starting place.

“The Prime Minister opposed the bill because he said an interest rate cap would become a target. Well, even if a cap did become a target, that target would’ve been set much lower than what the loan sharks are charging.

“The issue of debt and poverty won’t go away, and needs real engagement by this government.

“There are no quick fix solutions. Reducing income disparity, improving social outcomes for Maori and Pacific Island communities, and reducing family violence and improving physical and social wellbeing are all important parts of the answer.

“It’s not just the government’s problem, either. For example: The Anglican Church is trying to do its bit through various community-based schemes, including setting up time banks, and providing some small loans and budgeting services, as well as other social services.

“We’re involved because, like other churches and Christian agencies, we know that debt is blight.”

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