The real victims of the finance markets are the loan sharks’ prey

Can you imagine paying $7000 for a $3000 car which then gets repossessed after just two months and you end up with no car but a $19,000 bill?

This is just one of dozens of true stories related in a report on loan sharking in the Pacific Island community of South Auckland which was released 10 days ago by the Minister of Commerce, Lianne Dalziel.

It is a shocking report of legalised theft by loan sharks preying on vulnerable families in low-income communities. It records excruciating stories of family financial breakdown and enormous community suffering as a result.

The report concludes, “the realities for many are that they and their families are struggling to survive, not only physically but also mentally, emotionally, culturally and spiritually.”

The 100-page report was compiled from interviews with key community leaders, community agencies and individual families.

The main reason for borrowing is to pay for day-to-day living expenses. The interest rates on these small loans are eye-watering. Twenty-five per cent per month (compounding to more than 1000% per year) is a common figure.

The second disaster area is the purchase of cars. Urban legend has it that the main problem for Pacific Island families is borrowing to support their church. This turns out to be a significant issue for some but is not one of the main causes of the problem.

The failure of government policy comes through strongly in the report. The current legislation may be working well for middle and high-income families, but the Credit Controls and Consumer Finance Act (CCCFA) “does not provide sufficient protection to credit consumers dependent on `fringe’ lenders” (The report refers politely to those providing these loans as “fringe lenders” while the rest of us know them as “loan sharks” or “cockroach capitalists”). It goes on to say that “there can be no doubt that fringe lenders have flourished in South Auckland in the period since the CCCFA became effective and that they deliberately and aggressively target Pacific communities”.

The result of this unfettered, unscrupulous behaviour has been devastating. The report talks about “the alarming extent of exploitative lender practices” producing “an environment of continuing pressure and stress in the lives of Pacific consumers”.

Community representatives see the problems as largely preventable. Simple acts of regulation to match what’s done in other countries would be a great start – for example, setting a cap on interest rates. In New South Wales, Victoria and Canberra this rate is set at 48 per cent. In Japan the maximum rate is 18% and in Germany it is 20%. In New Zealand, the sky is the limit and vulnerable families are easy prey.

Other countries also put the onus on the lender to prove the person borrowing can pay the money back. A proper credit assessment is mandatory. Not here. Loan sharks prefer a person failing to pay back a loan because they can then heap on the charges and even take someone to court to enforce a regular $20 per week payment – for the rest of their lives in some cases. Community agencies call also for a ban on advertising, or at least for stringent controls to be placed on advertisements.

All of this has fallen on deaf ears. Instead of putting a fence at the top of the cliff, the Government prefers to survey the carnage from afar and tut-tut about people making stupid decisions. This is the typical response of the comfortable middle-class.

The report was released on a Friday afternoon because the Government wanted to bury it as quickly as possible in a dead news zone. All the Government wants from Pacific Islanders is their vote. It has no intention of acting to help these communities in a practical way as they face the most vicious financial thuggery. Instead, the Government is calling for more information, another review of the law next year, a few brochures sent around the community and bugger-all else.

It was a very different story just a few days later when Lianne Dalziel was falling over herself to express sympathy for relatively well-heeled people who lost money in the failure of Nathans Finance. Not only does this minister have comprehensive legislation in the pipeline to help protect these investors in the future, but she has called for an urgent report on any steps she can take in the meantime to restore the confidence of investors. These are the middle-class voters Labour needs to win the election.

Pity the low-income Pacific Island communities. Their problems don’t get the star treatment of “mum and dad” investors and Labour takes their vote for granted.

Main parties set for phony war over election funding

The cynical saying that we get the governments we deserve has been long eclipsed by the reality that we get the governments big business pays for.

There was a time when Labour and National ran cake stalls, raffles, jumble sales and flea markets to raise funds for election campaigns.

Those days are gone. Cake stalls won’t do it any more. Campaigns can’t be run with leaflet drops in letterboxes and soapbox meetings on street corner as they were in the past.

Impact with the mass media is essential and these require large donations from businesses. It would take hundreds of cake stalls to fund a 30-second TV commercial. Just not do-able. With this reliance on big business donations comes the inevitable handing over of a pound of flesh (or a pound of policy) to reflect the interests of the donor.

It’s true these donations are collected by party officials so as to distance policy development from the influence of the donors but this is really just a facade. MPs are acutely aware that even though the business strings aren’t visible, the understanding of what is expected from the party in return is very clear.

Business has two big parties to choose from these days and the difficulty in telling them apart is perhaps best reflected in the decision of Telecom at the last election to donate $50,000 each to National and Labour.

Because big donors are now so dominant, both main parties have very little difference between them in terms of policy. Both are business friendly parties at the expense of those who would have run the cake stalls of the past.

The areas of parliamentary debate have now largely shifted from policy to issues of credibility and honesty of individual MPs. Public perception has replaced policy difference at the centre of electoral battle.

Stung by the impact of the Exclusive Brethren’s secret funding of an anti-Labour campaign during the last election (remember, the Exclusive Brethren are the people who don’t believe in voting but do believe in getting the government they want and are prepared to pay for it) Labour set out to clean up the influence of big business on our democracy.

And so we have their Electoral Reform Bill now open for submissions till September 7.

The steps are there to control lobby groups but the key element is missing. Labour no longer wants to ban secret election donations or stop secret trusts from hiding big donations to political parties.

The Government intends to stop lobby groups from doing this but not political parties themselves.

The National Party have launched their attack on the bill around the restrictions placed on lobby groups but they, too, do not want secret election donations to political parties from individuals or trusts controlled in any way. And so we are being set up for a phony war whereby the main political parties argue about controls on lobby groups but both will support exempting themselves from the same scrutiny as to where their money comes from.

Those who pay the piper call the tune but Labour and National don’t want us to know who is paying. Opening up our democracy to accountability over funding was supposed to be the central plank of this legislation. Should it not be the strength of vision and policy which decides an election rather than the size of the chequebooks a party can attract? This was Labour’s line as it began preparing the legislation.

However, it’s clear that Labour has had feedback from its big-business donors that they don’t want to be publicly accountable for their political party funding.

National has the same problem with its backers. They have used secret trusts for years by which bid donors can make huge payments to National’s election coffers with no-one the wiser as to who has provided the money.

Business groups oppose openness and transparency. They thrive when they can use cash to tip the balance of the electoral field in their favour. Whatever it is, it isn’t democracy. It is consent to govern purchased by business.

Distasteful as it seems at first, I for one would have supported state funding for political parties.

Alongside sensible controls on lobby groups this would mean elections were more about a contest of ideas and vision than a measure of private financial backing.

The bill has plenty of other deficiencies. For example, no restrictions on foreign or corporate donations are proposed. Canada very sensibly says that only those able to vote in an election should be able to make political donations. Why not the same principle applied here?

After all the bickering to come over this bill, elections in New Zealand will still be open to purchase.

It’s time Govt made sure refugees get a fair go

Would it be possible for a person to be detained without trial or charge for more than three years in a New Zealand prison? No way. Our democratic freedoms would prevent it. This is not Stalinist Russia, or a CIA rendering facility. This is New Zealand where we give people a fair go. Right? Wrong!

Iranian Amir Mohebbi has been imprisoned for more than three years in Auckland’s Mount Eden jail after he was detained there on January 20, 2004.

Amir came to New Zealand 10 years ago and applied to be accepted as a refugee. In the time this took he settled down, fell in love with Maryam and began a family. He has three New Zealand children – Monica, seven, Milad, five, and Merila, three. Merila has never known a father who is not in jail.

Immigration Minister David Cunliffe wants to deport Amir because his application for refugee status was declined.

However, it is not safe for Amir to return to Iran with his family. He is a Christian convert who knows the Bible better than the Catholic priest (according to the priest himself) who takes mass every week at the prison.

It’s a similar situation to that of Thomas Yadegary who was released on bail this year after more than two years in detention. Another Iranian in a similar situation, Ali Panah, has been on a hunger strike for the past four weeks to protest his 18-month detention.

He became an Anglican before arriving here from South Korea. He was taken to hospital last week in a weak condition and still refusing food. The Government says he will be released only if he agrees to leave the country within six weeks.

Ali’s employer is angry and appalled. He has been actively supporting Ali and finds it incongruous that the Government could be so callous towards such a decent, hard-working person who has in effect, through his hard work and good citizenship, made himself a New Zealander. Ali’s Anglican vicar agrees.

Amnesty International says it is not safe for people in Amir’s and Ali’s situation to return to Iran at present. In a commonsense way they say the Government should issue these men temporary visas to remain in New Zealand until the situation in Iran changes and their lives are no longer at risk.

But like a moron without a moral compass the Government blunders blindly on.

Compare for a moment the situation of Amir and Ali with that of the young foreigners arriving to work in Queenstown where the welcome mat has been put down and they can get a work permit in 48 hours. And what about the wealthy investors who bring big sums of money here? They are welcomed with a red carpet even if their commitment to New Zealand is no thicker than a wad of notes.

Or compare the Government’s hard-heartedness towards these Iranian families with its attitude to white Zimbabwean farmers just a few years back. The Government had the welcome mat down even before the first white farm was occupied.

But no Kiwi welcome for these hapless Iranians. They are not welcome because they are not white, not wealthy and not able to survive in Queenstown with their families on the minimum wage.

This is our New Zealand and our immigration policy. Sucks to be us!

David Cunliffe announced last week a major rewrite of our immigration policy which included the claim, “We will have a robust new international protection regime, a world-class independent appeals system, and a model detention system that will uphold human rights and high standards of fairness. The bill is consistent with the New Zealand Bill of Rights.”

What pathetic, transparent drivel. If these words meant anything Cunliffe would use his discretion to release these Iranian detainees.

Instead of improving the situation the proposed bill will make matters worse.

Under Cunliffe’s proposals the very problem created by the Ahmed Zaoui case would be extended to all prospective immigrants and refugees. They will all now be open to having classified information from any unnamed source, either foreign or local, used against them without having the right to see the information.

If we have learned anything from the so-called war on terror it is surely that foreign intelligence organisations, as well as our own, cannot be trusted to provide reliable, unbiased information.

If information against a person is valid then it will stand close scrutiny in the light of day. Otherwise it has no place in a democratic process.

Meanwhile, the minister’s staff work overtime to pressure the lawyers acting for these Iranian men to make no public comment about these cases. Unless lawyers “play the secrecy game” they will miss out on potentially lucrative referrals from immigration ministry staff.

A country’s immigration policy probably shows its unvarnished, underlying attitudes better than any other area. Heaven help us if Cunliffe’s practices are a true reflection of New Zealanders.

Restructuring of 1980s sowed the seeds of child abuse

It’s been another week of outrage and breast-beating at the serious assaults conducted against another innocent toddler – in Rotorua this time.

Three-year-old Nia Glassie is in hospital with serious brain injuries after suffering on-going horrific abuse allegedly at the hands of extended family members while her mother was at work.

It seems as though commentators have been competing to see who can express the greatest indignity.

The charge was led by the likes of Wanganui Mayor Michael Laws who presumably feels better after venting his spleen squarely at Maori.

United Future leader Peter Dunne chimed in saying, “It’s time to stop pretending that the kind of child abuse suffered by Nia Glassie and the Kahui twins is not a Maori problem”. According to Dunne it’s about time Maori leaders sorted it out.

A quick glance at the figures seems to confirm child abuse as a Maori-centred problem. Maori children are more than twice as likely to die from abuse as non-Maori children. However, doctors at Auckland’s Starship Children’s Hospital see many cases of child abuse each year from all ethnicities with only a tiny minority catching the media eye.

If we can’t identify the problem then we will never get to a solution.

Labour MP Shane Jones acknowledged the symptoms of the problem when he said Maori families who abuse their children are “gripped by a poverty of spirit and an impoverished morality”. True, but hardly helpful.

The Rotorua meeting co-ordinated by the mayor and involving community agencies suggested that families on benefits be required to check into a social agency to get their benefit. That would not have done Nia Glassie any good because her mother was working and the suggestion is more a reflection of the depth of community prejudice around solo parents.

How is it that somehow beneficiaries are the problem? Social Development Minister Steve Maharey welcomes the idea. Beneficiary bashing has always been a popular sideshow for politicians as well as taking attention away from the source of the problem.

So rather than add to the media meltdown of lazy prejudice, crypto-racism and dog-whistling politics, let’s identify the source of the problem and propose a solution.

Child-abuse deaths for Maori were on a par with the rest of New Zealand in 1987. In the period 1978 to 1987 the number of children aged 0 to 14 per 100,000 killed was 0.92 for non-Maori and 1.05 for Maori. A few years later it spiralled out of control. For the period 1991 to 2000 the figures were 0.67 for non-Maori but 2.40 for Maori.

This dramatic increase has obvious roots. The number of Maori in paid work dropped by 15 per cent between 1986 and 1991 while total unemployment fell just 6 per cent. Maori unemployment peaked at a staggering 26 per cent in 1991 while the non-Maori rate was just 9 per cent.

These were the people tossed out of work and into dole-queues as the economy was restructured to suit the wealthy by Labour and National in the 1980s and 1990s.

After being forced out of work they were labelled bludgers and when benefit levels were slashed by National in the early 1990s their alienation was complete. Somehow it was all their fault. The majority of Maori families have struggled ever since. So often the children who grew up in these families in the 1990s have become the dysfunctional young parents of today with all the symptoms to match.

In one sense it isn’t a problem of poverty itself but of growing up in families which were quickly moving backwards. They were going down without hope while the middle-class made steady progress in the opposite direction.

There is no secret about any of this. Increased child abuse, along with poverty, profiteering and corporate greed, has its origin in economic policies.

We need a reality check here. The statistics relating to child abuse should be carved into slabs of granite along with the names of those who drove these families into poverty. Names like Peter Dunne and Michael Laws, MPs at the time, would be included. These should then be cemented in public display outside the Labour Party, National Party and Business Roundtable offices around New Zealand along with pictures such as those of the Kahui twins and Nia Glassie.

The solutions are a change in our economic priorities to, firstly, one of full employment and decent wages over 40 hours for any breadwinner to bring up a family. Anything less is to visit the same abuse, lack of dignity and respect on Nia Glassie as did her caregivers.