Research

When Debt Becomes a Problem: A literature study

This literature study gathers and synthesises information on household debt problems from the national and international literature. Its aim was to review the literature so as to provide definitions of key terms, estimate (for the first time) the size and scale of debt problems in New Zealand, discuss possible reasons why some people fall into debt problems, assess the likely impact this has on individuals and families, outline possible avenues for tackling debt problems, and suggest where there are information gaps. It has been written to provide a foundation for considering future government and non-government policies relating to the issue of over-indebtedness.

Since at least the early 1970s there has been a credit revolution. New technology facilitating the widespread use of credit cards, and the financial deregulation policies of many countries in the 1980s and 1990s, have provided consumers with far greater ease and access to credit. The increasing availability of credit has been matched by a consequent increase in levels of borrowing. From a social and economic perspective this raises questions about the impacts (both positive and negative) this has had on individuals and families, particularly for those with lower incomes.

Valins, O. (2004). When Debt Becomes a Problem: A literature study. Wellington, NZ: MSD

Budgeting Assistance and Low Income Families: Changes in Income and Expenditure

The New Zealand Federation of Family Budgeting Services Incorporated (NZFFBS) and its affiliates are important providers of social services in New Zealand. Their work helps a large number of clients, most of whom are social welfare beneficiaries. This paper examines the impact of budgeting advice on low-income families’ patterns of  income, expenditure and indebtedness, and the extent to which budget advice has helped clients to live within a balanced budget. It is based on a study of 358 clients of the NZFFBS undertaken by the University of Otago Consulting Group in 1994. The results show that: (1) after receiving budget advice the average weekly income of both beneficiary and wage earner clients rose; (2) expenditure changes after budget advice showed a decrease in all categories; (3) on average, clients moved from a weekly deficit to a weekly surplus after budget advice; and (4) a substantial proportion of the change in clients’ surpluses/deficits could be attributed to increased income rather than decreased expenditure. The paper concludes that for the majority of clients, budget advice has improved their financial situations by moving them from a situation of weekly deficit to break-even or surplus by giving them an increased understanding of their weekly income and expenditure.

Wilson, A.G., Houghton, R.M., Piper R.K. (1995). Budgeting Assistance and Low Income Families: Changes in income and expenditure. Social Policy Journal of New Zealand, (5), 97-109.

Towards Self Help: Urban/rural differences in access to services

This report has been commissioned by the Rural Resources Unit of the Ministry of Agriculture and Fisheries with the purpose of examining the nature of enquiries which Citizens Advice Bureaux and budgeting services affiliated to the Federation of Family Budgeting Services receive. It also aims to:

• assess and compare rural and urban differences in CAB client enquiries. There is a particular emphasis on analysis of CAB's rural sources;

• establish the similarities and differences in access by rural people to services from the enquiries presented to bureaux and budgeting services.

The data sets (of both quantitative and qualitative data) provided by each CAB and by Family Budgeting Services (FBS) were divided into three groups: urban, urban with rural hinterland, and rural. This report compares responses provided by the three groups and identifies which problems were specific to rural areas. The report also looks at strategies which were enabling CAB and FBS clients to help themselves, includes a summary of case study profiles and makes some recommendations on activities which could be followed to help rural people overcome access barriers.

A variety of recommendations are made for addressing the service needs of rural communities.

CAB (1993). Towards Self Help: Urban/rural differences in access to services. MAF Policy Technical Paper. Wellington, NZ: MAF Policy.

© 2007 New Zealand Federation of Family Budgeting Services Inc...