Children badly affected by problem debt
Child Poverty Action Group says problem debt takes a heavy toll on children and New Zealand's consumer credit framework
does not protect their interests.
Many Kiwi families have nothing in reserve. Dr M. Claire Dale of Child Poverty Action Group says, "Many low income
families don't have savings or families who can help out. When they face additional expenses, such as the washing
machine breaking down, they are forced to borrow from a third-tier or fringe lender at high interest rates that trap
them in a spiral of debt."
"When this happens, families struggle to pay for basic food, healthcare and school costs as they are squeezed by debt
servicing and repayments. They may need to accept sub-standard and crowded housing conditions and move often, which
affects children's health and education."
Dr Dale says, "New Zealand needs to develop a legal and policy framework for credit that is consumer-oriented and
founded on human rights and social justice. In the interests of children, CPAG urges the government to introduce a cap
on interest rates (Australia's cap is 48%). We would also like to see partnerships between government, bank, and
non-government organisations to promote financial inclusion with qualified access to low and no interest loans."
CPAG says the government must also repeal the benefit sanctions legislation which is propelling families that are barely
coping into a whirlpool of misery and escalating debt.
Ends