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No Power For The Poor?

29 August 2001

Most families using foodbanks are extremely vulnerable to rising power prices and the threat of disconnection, research released today reveals.

The Poverty Indicator Project, run by the New Zealand Council of Christian Social Services, shows an increase in the proportion of foodbank users behind on their electricity bills over the past three months.

“At the Christchurch and Dunedin foodbanks, over 95% of the people surveyed were in arrears,’ said Campbell Roberts, the Council’s Poverty and Housing Spokesperson. “This leaves these families in a very vulnerable position if electricity companies become more stringent in disconnecting people’s power or want to put the price up.’

“These households definitely do not have any extra money to get power reconnected or pay bonds. Our research also shows that these people are most likely to be on fixed incomes, are already in debt and an increasing number are going without a phone.’

“The negative consequences of having their power disconnected are more drastic. It will lead to inadequate or unsafe heating, poor health, food perishing and an inability to cook. People on low incomes are being further penalised by having to find ways to pay for a product they cannot do without.’

“The costs for both power and food have increased lately and this is having a significant impact on low-income households. Staff at the foodbanks have noticed an increase in the people in extreme financial difficulty. People are making a trade-off between necessities of life - pay the power bill or pay for food. This research shows that people cannot afford either’.

“Electricity is an essential service. If as a country we want to create the inclusive society that the government is talking about, we need to ask whether the electricity industry should operate in a strictly commercial way. As a first step there needs to be systems in place to ensure that company practices are not creating undue hardship for households’ said Campbell Roberts.

ADDITIONAL INFORMATION

The New Zealand Council of Christian Social Services (NZCCSS) represents the social services of the Anglican Church, the Baptist Union, the Catholic Church, the Methodist Church, the Presbyterian Church and the Salvation Army.

Collectively, our members have around 550 social service delivery sites in all areas of the country.

The Poverty Indicator report also focuses on other key results about housing, income, employment and debt. The information has been provided by clients who have gone to seven foodbanks - one each in Invercargill, Dunedin, Christchurch, Wellington, Palmerston North, Hamilton, and Manukau City.

The following table shows the actual numbers or percentages for the pilot study (P), 1st quarter (1st) and 2nd quarter (2nd) for each foodbank agency.

Apart from the utility statistics other key indicators included in the table are -

- A slight decrease in the average number of applicants per month for five of the seven foodbanks

- Continued high percentage of applicants in debt to government agencies, banks or other loaning institutions

- A stabilising in the proportion of state house tenants needing assistance has not continued this quarter.

- Over 40% of applicants at the North Island foodbanks are still spending over half of their income on housing costs. According to the Consumer Expenditure Statistics in 1998, NZ households on average spent 19% of their expenditure on housing costs.

- Median housing costs have reduced at many of the foodbanks, contributing to an increase in median disposable income. However, increasing costs to power and food has eroded these gains. The dramatic increase in income in Christchurch Mission is due to an increase in the number of families surveyed.


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