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What about pokie machines and loan sharks?

24 June 2008

Media Release

What about pokie machines and loan sharks?

Global Peace and Justice Auckland is appealing to the Prime Minister to extend the proposed controls on alcohol to also cover pokie machines and loan sharks.

We have written to the Prime Minister pointing out that alongside alcohol, pokie machines and loan sharks are also “parasites on poverty”.

Together this “terrible trio” are having a devastating on low-income communities. They are putting the quality of life for whole communities such as Manurewa under serious threat.

There is one pokie machine for every 465 people in a high income community but one for every 75 people in a low income community. There is no doubt who these machines are designed to suck money from.

Similarly there has been an explosion of loan sharks targeting vulnerable communities. For example the report on the effects of loan sharking in the Pacific community released last year said the present law – the Credit Controls and Consumer Finance Act – “does not provide sufficient protection to credit consumers dependent on “fringe” lenders” and went on to say “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 report concluded “the realities for many are that they and their families are struggling to survive, not only physically but also mentally, emotionally, culturally and spiritually”

Despite this report there are not yet any effective measures to curb loan sharking.

Two steps already in place in some Australian states would be a good start. Firstly the setting of maximum finance rates (the finance rate is the repayment rate which includes the interest rate and set-up fees) for all borrowing. Secondly the requirement that the lender prove that the borrower is able to pay back the loan. This would avoid cases where a person borrows from several sources and hasn’t a hope to repay the debt. Such a situation is not a problem for the loan shark, it is their ideal scenario.

It’s time to drive loan sharks and pokie machines out of our communities.


Background on pokie machines

• 47% of pokie venues are in the poorest one third of our communities. This is also where 56% of Maori and 72% Pacific peoples live.

• Put another way, in our high incomes communities there is one pokie machine for every 465 people but in our lowest income communities there is one machine for every 75 people. Let’s not kid ourselves who these machines are designed to suck money from.

• An estimated 50,000 New Zealanders now suffer from severe problem gambling. (For example in a small Maori community in an isolated rural area, twice a week the locals get into cars to drive 150km to the nearest pokie machines to feed their addictions) People gamble on pokies through a mixture of desperation and hope.

• There are 20,302 pokie machines in New Zealand – up from 14,000 when Labour led the government from 1999. (Numbers peaked in 2003 and have been dropping very slightly since)

• 88% of people referred to problem gambling organisations have pokies as their addiction. (Compare this to the 0.6% who are addicted to either lotto, scratchies and keno combined)

• More than one billion dollars is lost from New Zealand communities each year from pokies.

• Some of the proceeds of gambling fund community groups but communities lose $3 for every $1 given in community grants.

• The proceeds don’t even end up in the fleeced community. (For example one trust owning pokie machines in a South Auckland hotel sends the proceeds to a pony club in a wealthy Auckland suburb).

• Governments have been impervious to the views of the community. Despite the people of Hamilton being overwhelmingly opposed to a casino licence being issued in their city it was deemed through a government body to be in the “national interest” that they have one.


© Scoop Media

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