May 6, 2012

Linda Murphy

Easter 5

Have you ever had to go to a finance company to borrow money to put food on your table?

I would like to share a conversation with you that I had with Bill who needed food. He had had his unemployment benefit suspended yet again because he had not had enough job interviews in the previous week. Bill was a labourer in his late forties, and it is not easy finding work when you are looking worn and older. In the course of our chat he told me that the last time his benefit had been stopped, Work and Income (WINZ) had told him to go to a finance company to get money to feed his son and himself!

He went to Instant Finance, you know the advert on TV the one where Stacey Jones, the well known and loved Rugby League player, encourages us to borrow to buy those things we cannot afford. Instant Finance lent Bill, a beneficiary, $500.00 with the repayments of $58.00 per week for 12 weeks. Given that the unemployment benefit is only $204.00 per week, these repayments were bound to cause this family hardship.

I was so sad and have over the weeks I have become very angry that this situation occurred and continues to happen at an alarming rate.

•             Why didn’t Work & Income suggest a Foodbank?

•             Why did Instant Finance lend this money to a beneficiary or anyone on a limited income who will have difficulty repaying the debt?

Don’t get me wrong, Instant Finance is a legitimate finance company, run by capable executives, which did not need to be bailed out by the government when the finance industry crashed.

It sits in a position between the commercial banks and the “loan sharks”.

All the same, in my opinion, its lending policies are creating undue stress amongst a large number of the less fortunate in our society.

It is sad that Stacey Jones, ‘The Little General’ is prepared to be a front man for a company, which in my experience, is the cause of so much grief in our community.

For centuries the poor and disadvantaged have had to use money lenders to survive and this has been called usury; the charging of excessive and unreasonable interest on loans. If Bill manages to not miss any repayments he will pay Instant Finance $696 over that 12 week period. If my calculations are correct he is paying $196 in fees and interest or 39.2% of the sum borrowed over a twelve week period. In my opinion that fits into the definition of usury. Unfortunately for Bill he has already missed a number of repayments, and therefore compounding interest is now applied. I hate to think how much he will eventually end up paying back Instant Finance!

Throughout the Bible particularly in the First Testament, there are numerous references to the freeing of the oppressed from debts in terms of the jubilee year. This was a year of freedom, a time of redistribution and new beginnings, implying the forgiveness of these debts. The ‘haves’ were expected to contribute to the welfare of the ‘have nots’ even if it means a reduction in their own wealth. Jesus’ message stressed this need of solidarity as community to free; the oppressed and marginalised, heal the sick and to build a fair and just society. The needs of the poor are very real and for this reason the gift of debt forgiveness or reduction cannot be arbitrary or unconditional. It is ultimately a restoration of the original relation intended by God and preached by Jesus.

It seems to me that Christianity has not realised this in two thousand years of existence. We still have the oppressed whether politically or financially or socially and the numbers are growing.

The church, in New Zealand very rarely comments on the state of our poor or our beneficiaries. Our readings speak of God’s love, and John’s Gospel presents arguments in favour of a basic dignity for all humanity and that was the message for the new Christian community and our community now. However we don’t seem to be very proactive in trying to influence any change. It all seems too hard and not our problem to solve. Nevertheless if we are community it is our problem and as members of that community it is our responsibility to attempt to influence a positive caring and just society. As Paul Ostricher said last week being in community makes us political whether we wish to be active or not.

Currently before parliament there is a Credit Contracts and Consumer Finance Amendment Bill which proposes to strengthen consumer protection. These reforms have been driven by widespread concern regarding the unscrupulous lending practices of loan sharks and the significant financial hardship suffered by people like Bill at their hands. Most of you will not have heard of this proposed bill because our press has been far too busy worrying, rightly or wrongly, about Skycity’s pokie machines, an event centre and this week’s issue of John Bank’s donations not being declared, so that this bill is going unnoticed with little press coverage.

I was relieved to note this week that the date for submissions had been extended from the 16th of May to the 28th May. The Minister of Consumer Affairs, Chris Tremain, is apparently touring the country talking to community and industry groups, and I did find that a number of newsletters from law firms have mentioned it to their money lending clients. While this bill will not probably affect companies like Instant Finance, it will stop people like Stacy Jones being an advertising agent. It will also attempt to stop the very unscrupulous lenders that I am aware of who prey on the less fortunate particularly in South Auckland and I am sure they are all over the country.

There are many reasons people go to loan sharks to borrow money such as rent payments or a bond, tangi or funeral contributions, immigration application, car repairs, wof, rego, school uniforms, school shoes, appliances, purchasing a car and food. There are so many lenders who are prepared to compromise the less fortunate for their own gain. Fair and just legislation would help protect the marginalised in our community.

Last year we saw groups of activists all over the world, on Wall St, in London and our own Aotea Square trying to expose the inequities of our current capitalist economic system. At present we do not have a workable alternative and their protests have currently been prohibited or side lined. They have however created debate and planted seeds of thought to explore an alternative, a more fair and just economic system.

Eighty years ago St Matthews’ had a vicar, Jasper Calder who spoke of a new Christianity “practical Christianity” a phrase I particularly like. To avoid another Bill getting a loan to feed his family we could make submissions in favour of the Credit Contracts and Consumer Finance Amendment Bill, we can bring canned and non-perishable food donations as part of our offertory each Sunday, to assist our local Foodbank, we could write to Paula Bennett and challenge her department’s policies. Then I think we are listening to what John’s words were saying to us this morning.

Amen.