Financial matters

I have been walking to work.  It takes about half an hour and I listen to National Radio on my cell phone.  While I was walking to work on Wednesday there was a story about how Labour was trying to get the government to support a bill that would regulate all those little companies that lend relatively small amounts of money to people and then charge exortionate interest rates.  The government didn’t sound enthusiastic.  Simon Power said that he prefered the option of voluntary, self-regulation.  Industry voluntarily self-regulating itself is an idiotic notion.  I believe that real estate agents have been voluntarily, self regulating and we know what bastions of credibility, and accountability they are.

The reporter discovered that Act were even less keen than National to regulate.  Heather Roy came on and told us that financial education not legislation was the key.  If people were more financially savvy they wouldn’t get conned by loan sharks.  This seems an extraordinary thing to say.  Following her logic we should probably be teaching self defence classes in schools so that if our students are attacked one day they can defend themselves and not rely like weaklings on legislated, nanny-state laws about assault and attempted murder.

The article returned to Simon Power telling us that the government couldn’t do anything in the matter of financial risk.  If people had things explained to them clearly at the time they signed up for a loan, and then bad stuff happened to them then that was just how it was.  Life is hard.  We know this is true because we know, for example, that if you invest in a finance company and it goes belly up (or looks like it will) the government will do nothing about it.  They won’t pump in hundreds of millions of dollars, and they won’t pursue the matter in court.

Except of course that this is not true, and the government will intervene in these matters.  They argue that the investors weren’t fully apprised of the risk.  Huh.  So we are clearly not operating under the belief that if (to use stereotypes) the well-educated, well-off, financially literate, English as a first language investors in big finance companies can be conned, then the (to use stereotypes) people with less education, who are less well-off, and less financially literate, possibly struggling through a language barrier, and more vulnerable because they are more desperate can also be conned.

Which is my way of saying, with the heavy hand of sarcasm, that National’s stated reasons not to regulate loan sharks  are horse shit.

Funnily enough, on the way back home I noticed  a poster glued to a power pole.  Somebody wants us to get angry at Stacey Jones for his celebrity endorsement of a loan shark company.  That’s easy because I was already angry at him.  They want us to meet in the park by the library in Newtown tomorrow at midday.  If I wasn’t at work I would go.

The park by the library in Newtown is across the road from a little green office block.  Should be an interesting lunchtime in Newtown tomorrow.

2 thoughts on “Financial matters”

  1. If our lily-livered government and its free-enterprise partners do not want to legislate against these usurers then at least they could demand that they make the terms of the instant loans clear so that people entering into agreements know what they are in for. Disguising rates by using ambiguous term dates is not good enough. Banks declare a rate per year like 6% p.a. Instant finance wide-boys (and car salesmen) use %s but generally on a day, week or monthly basis. If they were upfront and honest and declared 400% p.a. I doubt that they would get any takers. I’ve been annoyed at Stacey Jones for some time particularly given that he appeals so strongly to the instant finance target market.

  2. I think your bottom photo is very apt. When I first arrived in Newtown i remember being so disheartened by that intersection when I counted no less than five loan shark offices there. Some are just small signs pointing to rusty stairwells at the back of the building.

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