Money Week 2018: Weathering a Perpetual Storm

By M. (Claire) Dale

‘Money week’ is like birthdays and Christmas – they are not something you look forward to if you don’t have any money. No-one can save if they can only afford to pay the rent if they pay that first every week, and limit the time they run the heater and only do stove-top cooking so they can pay the power bill. Then of course there is the difficulty of buying enough good food for the family for the week. They can’t afford to buy nice presents for their children’s birthdays or Christmas, and struggle to afford school trips and visits to grandparents.

This is the perpetual storm whether they are in paid work or on a benefit.

And then the storm intensifies every time there is a crisis – like the car breaking down. The bank won’t lend them money because they have a bad credit rating, but the payday lender is happy to see them – and charges “only 1.5% per day”. That is over 500% annually, and is legal in New Zealand.

Hopefully, the current review of consumer credit by Commerce and Consumer Affairs Minister Kris Faafoi will result in a better borrowing environment for people on low incomes.

And hopefully, the review of social security by Minister for Social Development, Carmel Sepuloni, will mean welfare benefits are increased so families can afford to eat as well as pay rent.

And fortunately, ethical microfinance providers, like Ngā Tangata Microfinance, are providing no interest, no fees loans to qualifying low income families.

One day, perhaps, we will return to a New Zealand where people on low incomes are able to pay the rent, be warm in winter, eat regularly and healthily, and have a little bit over to save as a buffer against crises, as well as for birthdays, Christmas, and their retirement. Then ‘Money Week’ will be a cause for celebration.