Dialogue: A nation without any saving grace

BY GARTH GEORGE

"Hey big spender," sang Shirley MacLaine in Sweet Charity some 35 years ago. If she were singing it today, we could make it our theme song - a melody to hum as those nasty bits of paper recording our festive season profligacy drop into our mailboxes.

In December alone, we put $2.5 billion through Eftpos machines, which represents more than $650 for every man, woman and child in the nation.

But that's only a fraction of it. In the same month, about $1.6 billion was charged to credit cards (more than $420 for every man woman and child) giving us a Christmas spend-up of nearly $1100 a person.

The Eftpos figure doesn't concern me because, except for those few who live on overdraft, it represents money we have in our bank accounts. That's the thing I like about Eftpos - if it ain't there, you can't spend it.

Credit cards are another matter. On any given day in this nation of a mere 3.8 million people the balances outstanding on credit cards amount to more than $3 billion and right now probably nearer $4 billion.

And, I'm pleased to tell you, not one cent of it is held against me or my wife.

While we were in Australia in the mid-1980s, my wife and I decided that being constantly in debt just wasn't on. So before we came back to New Zealand in 1988, we paid off our credit cards and cut them up.

We have had none since, nor have we entered into any hire-purchase agreements.

And from that time we have never had any financial worries, although there have been times when we've had to tighten our belts a bit and perhaps put off buying something we desired rather than needed.

Everything we own, except our home but including our two cars, is debt-free. As far as we are concerned, a mortgage is the only credit that's legitimate, and even that is being paid off much faster than is required by the bank.

But the staggering volume of private debt doesn't end with credit cards. There must be untold millions more in all the hire-purchase agreements entered into and the money borrowed from moneylenders whose beguiling advertisements clutter the pages of our newspapers.

It's not only the storefront moneylenders who beguile, either. Advertising agencies and the suppliers of goods and services who hire them, the banks, the credit-card companies all conspire to separate us from our money or, rather, to mortgage our future incomes against some spending whim of today.

Almost every month we receive in our mailbox some offer or other from a bank or credit-card company offering us vast amounts of credit.

And I recall about the middle of last year mentioning that in a mall not far from where I live, a team of youngsters were accosting shoppers and offering to sign them up for a credit card which carried an automatic limit of $500. Many of those seen to sign up - in some cases whole families for a card each - did not appear to be good credit risks.

But that doesn't worry the money-grubbers and bean-counters who think up these schemes. They simply make sure that the usurious rate of interest charged on credit cards is sufficient to cover bad debts.

It is of no concern to them that many of the people they've conned have been reduced to misery, perhaps penury, because they have had debts thrust upon them by a system they didn't understand, let alone know how to manage.

Ever been in a conversation about what you would do if you won Lotto? I have, several times, and there's one thing you can guarantee: when the question is asked, the company - irrespective of age - choruses, almost in unison, "The first thing I'd do is pay off my bank card". Funny, that.

The level of personal debt, of course, is all part of the "If it feels good, do it" philosophy of instant gratification, which began with the baby-boomers and has trickled down undiluted through subsequent generations.

I wonder how long it will be until we again teach our children patience, thrift and the benefits of saving, as I was taught in my youth - not that I took any notice, but most of my peers did and their lifestyles today show it.

And I wonder how many of our indigenous private businesses would still be in Kiwi hands, and how many of our public utilities would still belong to us taxpayers rather than overseas corporations, if this country had not turned from a nation of savers to a nation of spendthrifts. And how much better off individually and wealthier as a nation we would be as a result.

Whoever it was who said that debt is the worst form of poverty was surely telling the truth.

Ask any Argentine.

* garth_george@nzherald.co.nz