Logie Jan: Credit Contracts and Financial Services Law Reform Bill — First ReadingText is incorporated into the Bound VolumeLogie Jan: Credit Contracts and Financial Services Law Reform Bill — First Reading[Sitting date: 17 September 2013. Volume:693;Page:13419. Text is incorporated into the Bound Volume.]JAN LOGIE (Green): I rise to take a short call on behalf of the Green Party to add my voice to that of my colleague Julie Anne Genter in support of the Credit Contracts and Financial Services Law Reform Bill and also in support of the points made by my Labour colleague speaking just previous to me David Clark. This bill does do a whole host of things to set up protections for vulnerable consumers from dodgy lenders and to help create an environment for responsible lending. It does put in place some tighter regulation around creditors. We know that is really important. It makes consumer protection the primary purpose of the legislation which you would have thought would be there and sets out responsibilities that the lender has. It mandates the development of a responsible lending code compliance with which will be evidence for responsible lending. It clarifies the processes and rules around repossession.We have heard in this House and in the media and from those connected to any group working with the vulnerable in New Zealand untold stories of the harm of loan sharks and dodgy lenders in our society. We have heard already tonight the stories of people going into casinos seeking out people who are triply vulnerable in that environment and setting up loan arrangements with 25 percent interest from day one. The fact that that is legal in our current environment kind of boggles the mind really. We have heard stories of people taking out an $800 loan for an emergency in their family and ending up with a $70000 debt. Again it beggars belief that that has been able to go on for so long in this country. We have heard that it is really not uncommon for some pay-day lender rates to be 10 percent a week and that loans often compound into four figures really quickly for quite small amounts of money.In the area I live in Porirua 95 percent of the people whom budget services are working with have got into trouble paying back high-interest loans. This is a very widespread problem. I think that that is also important in the context of this and that is why we support this legislation as a first step and would also certainly support the discussion and the possibility of increasing or having a threshold on interest rates because clearly that is out of control at the moment and the most vulnerable are paying.Being Greens we look at everything in context. We look at systems. I do just want to touch briefly on some of the context that this bill sits within and the reasons that people are getting into debt. It is because we have low wages. It is because our benefit levels were consciously set below the poverty level back in the 1990s. People are driven to desperation. There are not many choices for many people in New Zealand who are in those economic circumstances. I would like to read you an abridged version of an extract fromInequality: A New Zealand Crisisby the Tongan-Palagi poetKarlo Mila. She notes that “Inequality means watching people close to you—extended family community networks neighbours and friends—who are persistently struggling in challenging circumstances to try to maintain their dignity to keep their households afloat to do their best for their children and to make good decisions by weighing up the constrained range of choices on offer to them … It is what happens when real banks won’t lend you money and the loan sharks are wooing you cheap bait for bad debt.” That is the context that this bill sits within. We see so often in this House bills that are driving people to these places. It is not enough to just put the protections in place; we need the social structures to prevent the need for them. Kia ora.