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Professor Catherine McDonald, Discipline Head, Social Work, RMIT University
This was a piece of research funded by the Australian Research Council
and also funded by the National Australia Bank and
by Good Shepherd Youth and Family Services, so Youth and Family Service, and
it's research that grew out of our increasing concern and the bank's increasing concern that
a lot of people were unable to borrow from the bank.
Paula Benson, General Manager Corporate Responsibility, nab
One in seven, which adds up to 2.65 million Australians, that's roughly the population of
Canberra, are marginalised or excluded from mainstream financial services.
This has important consequences.
For these people, their ability to participate fully in social and economic
activities is reduced and their financial hardship is exacerbated.
These people have a poor credit rating or they don't earn enough money
or they've got no savings.
They nevertheless have need for money and since they can't borrow
from the bank they have to go somewhere else.
Now the alternate source they go to are payday lenders, which you would know as pawn brokers
very often, Cash Converters, Money Three, they're payday lenders
or pawn brokers and they're ... they are a major and growing source of finance
for an increasing number of people in Australia.
The people predominantly, about 80%, were people on income security payments and within that
it was people ... the majority, about 50%, were on disability payments, yeah,
and this was shocking, this is what shocked us and when we launched
the report Minister Bill Shorten noted it.
Bill Shorten, Minister for Financial Services and Superannuation
One statistic I did find upsetting was that people on the disability support payment
make up the single largest category of borrower in the survey sample.
I think that's remarkable given that people with disability just make
up 18% of the general population.
Another 40% were on Newstart Allowance, the remainder were on parenting payments.
They were borrowing small amounts of money because they were using these
for activities for every day, you know, so it was for very ordinary sorts of things like buying sufficient
food because they'd had a bill or paying the washing ... paying to get the washing machine
fixed or to pay utility bills, that was a really big one.
Things that you and I just take for granted they had to go and borrow to
pay. Why is it a problem? It becomes a problem because if it's an everyday expense
if you borrow against an everyday expense you've got to borrow more the next time,
you've got to keep on borrowing.
So you never actually get to pay out the loan and that's the essence of the problem,
that people either have multiple loans or they have what we call spiralling
loans and that they never actually pay it out and they just end up with
more and more and more and more debt.
That's a problem.
Hopefully it'll go towards prompting the government to review the income security system
and start thinking about the adequacy of payment levels.
By not funding income security at adequate levels, so people can live their lives,
you're actually forcing them into the hands of these industries
and making their life worse.
So it's really for government to step up to the plate and, you know, RMIT has a reputation for doing
very applied grounded research that's important. We're not into highly
theoretical research we're into grounded stuff that contributes to the
everyday policy discussions that go on about issues to do with ordinary Australians.