A person who lost their job and is caring for an elderly relative. A couple renting an uninsulated house that has racked up significant power bills they can’t afford to pay. These are just some of the scenarios the Rotorua Budget Advisory Service has dealt with this year as total client debt soars from $15.8 million to $18.4m in 12 months. Carmen Hall reports.
“Times are hard”.
That’s how Rotorua Budget Advisory Service manager Pakanui Tuhura describes the economic challenges facing households with the service helping 813 clients this year.
“When the purse strings are so tight you are having to cut back on food and you have multiple families sharing accommodation or unable to pay for power to keep warm, you know times are hard.”
Client numbers had climbed from 728 in the 12 months to November in 2022 and Tuhura said there had been an increase in working families seeking help.
“Even with two incomes many families are finding it hard to make ends meet. Many people coming to us have already reduced their spending and are now at the point of reducing spending on necessities such as food, accommodation, and power.
Rotorua Budget Advisory Services manager Pakanui Tuhura. Photo / Andrew Warner
“Many are looking at ways to increase income from short-term needs through KiwiSaver hardship applications or longer-term needs such as increased family cost sharing or additional work.”
The debt
The total client debt the service dealt with in the 12 months to November had climbed to $18.4m from $15.8m over the same timeframe in 2022.
“Our kaitono [clients] have all been affected by the rising cost of living. This has not only impacted people and whanau directly in terms of food, accommodation and power but indirectly in terms of being able to meet their debt servicing and costs to ensure they are leading (or the hope of) a good life.
“Many kaitono have now been reduced to survival mode whereas before they were building to a brighter future.”
The case studies
Client A: Lost their job and is unable to work because of health reasons. They are caring for an elderly relative.
They are struggling to meet debt repayments for purchases made when in full-time work and borrowing money from friends to cover debt repayments.
Tuhura said the service had helped to organise their financial situation by providing our support to do a KiwiSaver hardship withdrawal and longer-term ACC applications.
“We are able to best support by making sure to build on their own strengths and utilising the resources available to them.”
Client B: A couple, who receive a Work and Income benefit when not doing seasonal work, have significant debt power arrears. They are renting an uninsulated house and were referred by Energywise.
The power company was rightfully seeking payment of current and past power bills, Tuhura said.
He said utilising the strengths and resources within the household and, while initially the financial issues seemed complicated, it had formulated a plan although “this will take time”.
‘Don’t ignore it and allow it to get worse’
Tuhura said his best advice if you are in financial difficulty is “don’t ignore it and allow it to get worse”.
“Identify the true cause(s) of your financial difficulty and work on several options to resolve it and come in and talk with one of our financial mentors about the options you have chosen. They will listen and then tell you if and how they can help you.”
He said its service was free and confidential.
“As long as you take the time to come in you will gain clarity of what money issues you are actually facing and what your options are to overcome those issues. Each plan we provide is customised to and driven by the clients themselves.
“If we are unable to help, then we will tell you face to face and let you know what other options you have.”
Sometimes people just want an unbiased and professional opinion that what they are doing is the best they can do.
“These people walk away with the satisfaction and confidence that they are in control of their money and may only require a few tweaks of their own plan to make things even better.”
“At one end of the spectrum financial stress can trigger aggressive positive behaviour like higher pay job seeking, strengthening family and friendship relationships and prioritising what is important. At the other end of the spectrum, it can trigger negative aggressive behaviour such as depression, relationship breakdowns, violence and self-harm.
“Everyone has a different coping mechanism which falls on this spectrum.”
Some may turn to faith others may turn to luck and wait for the opportunity to turn things around by gambling.
The most infrequent method used to cope was planning.
“Most people want to thrive rather than survive so setting achievable goals and building self-confidence and knowledge (as well as the plan) around their money becomes interesting for clients.”
Rotorua Whakaroa's Elmer Peiffer. Photo / Andrew Warner
Elmer Peiffer co-founder of Rotorua Whakaora said it was helping to indirectly feed about 1000 to 1100 people a week.
“The demand has increased almost twofold. We have the standard people who need assistance with food but we are seeing working families too. The income they make is not enough to maintain all of their obligations.
“The first thing that gets sacrificed is food. We also support some agencies here and some Toi Ohomai students who have little leftover for food.”
Whakaora had been rescuing and recovering surplus foods and distributing them within the Rotorua region and surrounding areas including Mangakino, Tokoroa, Murupara, Minginui, Kaingaroa and Kawerau for about 10 years.
It collected food from supermarkets, bakeries, businesses, growers and manufacturers.
Peiffer said currently it was on the lookout for a suitable premise in Rotorua with parking for its free supermarket that was currently operating out of his home.
Carmen Hall is a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.
