26 July, 2004

Government responsible for Generation Debt

Green MP Nandor Tanczos today accused successive governments of fostering a mentality of debt dependency in New Zealand through the use of the student loan scheme.

Nandor, the Green Party's Tertiary Education spokesperson, was responding to reports released today by two agencies showing New Zealanders are continuing to spend more than they earn at dangerous levels.

The New Zealand Institute reported that 16 per cent of New Zealanders had more liabilities than assets and that the median household wealth in Australia was three times that of New Zealand's, while the Consumers' Institute revealed that total credit card debt now amounted to $4 billion.

"The level of at which people spend more than they earn has reached frightening proportions," said Nandor.

"Student loans have encouraged a generation of young New Zealanders to see debt as a valid way of financing their lifestyle.

"Eighteen year-olds are exposed to thousands of dollars of debt at an age where many of them cannot fully comprehend the long-term effect this debt will have on their lives.

"A debt mentality has developed now for a generation of New Zealanders. Debt is just a part of life for young people, many of whom will never pay off their debt during their lifetime.

"The only winners are the foreign-owned banks who are creaming the interest payments," said Nandor.

ENDS

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