Tuesday, May 24, 2016

More odious debt

The media over the last few days has been full of stories about WINZ and odious debt. But the worst one is this:

A woman with eight children living in emergency housing is facing a debt to Work and Income of $100,000, which she will never repay, a support group says.


Auckland Action Against Poverty said the mother and her eight children were evicted by Housing New Zealand months ago after it found the house was contaminated by methamphetamine.

The organisation's coordinator, Alastair Russell, said it was not clear if the woman caused the contamination.

He said the family had been living in emergency accommodation costing more than $1200 a week and she had already borrowed $60,000 from Work and Income to pay for it.

"Housing New Zealand have banned her for 12 months from seeking their assistance so she'll clock up this debt for another six months and then go back to Housing New Zealand seeking assistance with a debt probably in excess of $100,000."

$100,000. Down here, that's enough to buy a serious chunk of a house. There's no credible possibility of this debt ever being repaid, but WINZ is under a statutory duty to gouge it out of her for the rest of her life. And to impose this because another government department basicly believes in witchcraft (and needs to churn state houses to create vacancies for homeless mothers with children living temporarily in motels) is simply crazy. Not to mention immoral. This "debt" is the result of government failure, a government agency refusing to do its job properly. And as such it should be voided.

Except it can't be. There's no easy mechanism for debts to WINZ to be forgiven. The law contemplates regulations permitting this, but none have ever been issued. And so the debts rack up: beneficiaries "owed" WINZ $627 million last year, half of which was for "recoverable grants", AKA "benefits being too low" (the other half was for overpayments, AKA WINZ fucking up. hardly any of it was for fraud). There are Parliamentary questions in at the moment to quantify how much of this is due to emergency housing assistance, but given that this is an area where debts can really rack up, I expect we're looking at well over $100 million here - assuming WINZ even knows to that level of detail. Which is a pretty big chunk of National's "surplus".

But this odious debt needs to go. And if this government won't forgive it, we need a government that will.