12. Question No. 12—Social DevelopmentPRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social DevelopmentQuestion No. 12—Social Development12. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social Development: What recent announcements has she made about supporting New Zealanders towards financial security?Hon CARMEL SEPULONI (Minister for Social Development): Today Minister Faafoi and I announced the strengthening of debt solution advice and services across New Zealand to combat debt in the wake of COVID-19. This Government is putting an additional $4.3 million over two years towards two key initiatives. Firstly we're investing in existing specialist debt solution services. These have qualified experts that our budgeting services can access free of charge to support their clients with more specialised advice on debt restructuring and repayment agreements between debtors and creditors. Secondly is the expansion of debt consolidation loans for clients who would be able to repay their debts if these were restructured into low-cost or interest-free loans. This Government knows that the COVID response and recovery is about responding to people's immediate needs while also planning for the future. That's why we will also be working with stakeholders and communities to develop a comprehensive national debt solution for all New Zealanders.Priyanca Radhakrishnan: What difference will this make for families in debt?Hon CARMEL SEPULONI: This funding is about sheltering indebted individuals and whānau from the financial health and social impacts of overwhelming debt. For many families a reason they don't have enough money is that their income is drained by high interest rates repayments and penalty fees. Well-supported low- or no-interest debt consolidation loans are a way to help them out of this trap. We estimate that around 2000 people will get access to specialist debt support and 1400 people could get access to and benefit from debt consolidation microfinance loans or help with variations to high-cost loans. Through these initiatives families will not only be able to have support to address their immediate needs but will help develop the skill set to enable them to move forward from situations of problem debt and build more prosperous futures.Priyanca Radhakrishnan: How does this align with other Government work to address problem debt?Hon CARMEL SEPULONI: Today's announcement builds on the $35 million of extra funding for core building financial capability services that I announced recently to address cost pressures for our budgeting services and enable them to increase their capacity as part of the COVID response. In December last year the Government passed the Credit Contracts Legislation Amendment Bill which required significant improvements to lending practices. Due to COVID we brought forward the cap on the total amount of repayments so from 1 May this year anyone who takes out a high-cost loan never has to repay more than twice what they have borrowed. We have also put in place regulations for all mobile traders and truck shops including ensuring they assess affordability before agreeing to sell goods on credit. This Government is investing in the wellbeing of our people and communities in the wake of COVID-19 and putting in place our plan for a strong and stable future for New Zealand.