Lobby decries pokie 'parasites'

Loan sharks and poker machines have been targeted as "parasites of poverty" in a campaign to help low-income families out of their financial crises.

Global Peace and Justice Auckland said low-income families often tried to bridge the gap between spending and income by going to loan sharks or gambling on poker machines in the hope of a windfall.

The money was needed to keep them above the poverty line, campaign spokesman John Minto said.

The Government's own unpublicised research pointed to the extent of the human tragedy, he said.

A telephone survey by the Ministry of Consumer Affairs found 53 per cent of all respondents had borrowed money in the past 12 months.

"Of these, 28 per cent reported they had borrowed for essential items such as paying for household groceries or to pay the power bill," Mr Minto said.

"These figures are a national scandal. Were this a crisis in the sharemarket where the incomes of New Zealand's wealthy elite were threatened the Government would react in the blink of an eye.

"However, people on low incomes are seen as politically expendable."

Mr Minto said the campaign would include community action and put pressure on the Government for changes in loan forms, maximum interest rates and an education programme on the dangers of debt.

It also wanted communities to be given control over poker machines installed before 2001.

Mr Minto said that in West and South Auckland, loan shops had sprouted like mushrooms and were often side by side with pokies and pawn shops.

He said pokies extracted $92 million each year from the Manukau region.

The problem was often endemic in the Polynesian community.

One loan shark in Mangere offered small secured loans at an interest rate of 25 per cent a month.

The company ran advertisements with pictures and names of people who could not meet their repayments, causing devastation for some families.

"Loan sharks like this are feeding in a cannibalistic manner on the community," Mr Minto said.

Interest rates of 20 per cent a week were common for cash loans for essential living expenses.

The big political parties had shown no interest in the crisis.

- NZPA