'Absolute disgrace': Dave Letele says government doesn't 'care for poor people'

As the spiking cost of living looms over already struggling families, 531pi's Pacific Mornings hosted a panel with key figures to speak on how New Zealanders are coping.

The panel included community leader Dave Letele, FinCap's Senior Policy Advisor Jake Lilley and General Manager of Financial and Wellbeing Services Siaola Vahefonua Tongan Methodist Mission, Susan Prescott Taufa.

Letele slammed the government for their funding cut decisions, including the reduction of the Building Financial Capability funding from $22.3 million last year to $19.5 million starting July this year.

RNZ reported that the Ministry of Social Development (MSD) confirmed that the money was a product of a time-limited cash boost during the pandemic which has expired.

The MSD, which currently funds 132 groups, said a change in funding model equals fewer awarded contracts.

However, Letele says when people seek help from Work and Income one of the services they are directed to are budgeting services.

"So, how are they going to cut these? To cut these services ... they don't care about anyone struggling.

"The government does not care about poor people. They don't care about anyone struggling. They're an absolute disgrace."

Voices report: Families financial struggles continue to worsen

Jake Lilley spoke on FinCap's Voices report which researched what New Zealanders spend their money on and the debts that affect their income.

Lilley says they found in 2023 that although income went up so did the cost of everything else which eventually outpaced those rising incomes.

He adds that they have seen many whānau seek assistance despite being assisted by their financial mentors as they are still struggling to keep spending beneath their earnings.

"Very tough times out there," Lilley says.

"And as a result, we're seeing the amount of debt that people have go up".

Watch the full panel discussion via 531pi's Facebook below:

Pacific families struggle with double the debt

Lilley says a "standout" finding was that debt for Pacific families was much worse, with Sāmoan and Fijian families having around $22,000 and $27,000 of debt respectively, compared to the $14,000 average for the rest of the country.

Additionally, Sāmoan and Fijian families spend roughly 24 per cent of their income towards debt, with Tongan families spending 22 per cent, compared to the national average of 15 per cent.

He says 15 per cent is already unmanageable when people are spending 106 per cent of what they earn.

Susan Prescott Taufa, whose organisation offers services such as financial literacy, says FinCap's report matches up with what they are seeing.

"I can say some of our findings on this report are about our Pasifika families that we work with each week," Taufa says.

"The cost of living is affecting a lot of our families. Our income doesn't match up with the cost of living.

"What we're finding is a lot of families are not able to meet their rent and the day-to-day living."

Increasing loans with decreasing protections

Lilley says their research found that car loans are where debts can "really go wrong", but that transport is a necessity.

He says they are "really concerned" about the rules of credit as there are talks of potentially removing protections for those applying.

"So, we're worried about gouging with cars and what support's available when someone's car breaks down because that seems to be where it unravels when we speak to financial mentors."

Lilley says the report is from last year but this year they are seeing more people seeking financial assistance.

He says he advocates for better law restrictions when it comes to seeking loans that better protect applicants.

Letele advocates for a compulsory financial literacy curriculum

Letele says the impact has hit lower to middle-class earners where the latter are now being pushed into needing their services, leaving them with "no more savings, no room for life to happen".

"You know we had police bringing a young dad last week.

"Two community Pasifika officers, thank goodness they understood, bring this guy because he's out there stealing food for his young daughter."

Letele says not everyone has someone to teach them financial literacy, adding that he has seen a trend in the schools he visits where wealthier schools teach budgeting but poorer schools do not.

He adds that life skills and budgeting skills should be compulsory in schools, especially in a time of cascading funding cuts and cost of living spikes.

Additionally, he points out that the pressures of the cost of living and the impacts of covid, the Auckland floods and Cyclone Gabrielle has strongly stifled already struggling families, leading to little time, energy, poor financial skills and nutrition.

"There is no time to educate their children. There's no time to cook healthy and shop healthy.

"There's more generational harm here. There's more knowledge not being passed down to the kids.

"The problem is the poorest schools and deprived areas don't have the resources and the ability to teach those types of skills that are needed.

"Anytime you have politicians and bureaucrats in power who have no idea what's going on on the ground, no connection with what's happening on the ground and no one that's telling them the truth, we're in trouble.

"And around the cycle goes and we're just kept down at the bottom."