8 December 2005

Beneficiary debt only going to grow - Bradford

Many more beneficiaries are going to find themselves in debt to Work and Income or loan sharks if the Government proceeds with plans to scrap the Special Benefit, Green Party Social Development Spokesperson Sue Bradford says.

The Finance and Expenditure Select Committee was yesterday told that 49 percent of those on benefits owe money to Work and Income.

"I can not see why this should come as a surprise. It is simple math. Benefits are not enough for people to live on, so they have to borrow money to survive," Ms Bradford says.

"The National Government cut benefits in 1991, some were completely wiped and others, such as the DPB, were slashed by 25 percent. The Labour Government has done little to restore benefits to the pre-1991 equivalent levels. The benefit system as a whole continues to keep many New Zealanders trapped on incomes that are simply not enough to live on," Ms Bradford says.

"Beneficiaries are sinking further and further into debt to both the Government and to private lenders.

"From what Social Development Chief Executive Peter Hughes said at yesterday's select committee it is clear that the Government is going ahead with its plans to abolish the Special Benefit and go ahead with the far less discretionary TAS - Temporary Additional Support benefit.

"While the Government will save tens of millions of dollars by introducing this benefit it will be tens of millions taken out of beneficiaries pockets.

"This move will see more people borrowing off the Government or forced into the clutches of unscrupulous loan sharks."

"The answer to this is simple - benefits must be increased to a level which make it possible for people to survive on them, and until this happens, the Special Benefit, or its equivalent, must be retained," Ms Bradford says.

ENDS

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