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April 26, 2022
Debt write off positive for poverty action
Peter Verschaffelt
Posted On April 26, 2022
Download AudioA member of Child Poverty Action Group is calling for debt forgiveness as a way for the Government to tackle rising living costs.
University of Auckland economics lecturer Susan St John says writing off student loans, some fines, emergency loans from Work and Income and Child Support debts could help break the vicious cycle many low income people are trapped in.
It needs to be done alongside reform of the Working for Families tax credit scheme, which also affects Māori disproportionately.
“All Māori families should be entitled to the full Working for Families package. At the moment, they disproportionately miss out on $72.50 a week,” Associate Professor St John says.
She says because Working for Families is a tax credit, it is not a work incentive but a punishment for people who lose their jobs.
She says other areas where debt could be forgiven or written off are loans from predatory lenders, high penalty payments on products like After Pay charge and council parking fines.
A thriving community requires people to have strong balance sheets with assets such as a house and a car to get to work but instead, people are running down their balance sheet by selling their assets and going into debt which isn’t a sustainable future.
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