“They might be loans for cars, personal loans or credit cards.”
Whanganui Budget Advisory Service manager Sandy Fage said there was a large amount of “buy now and pay later” arrangements that were landing people in debt.
“They might sign up for ‘buy now pay later’ for their meat from the Mad Butcher but they have no way of paying it, so instantly default.”
Fage said the service was fully booked out with clients. “We are seeing as many people as we can.”
There had also been a flurry of hardship applications to withdraw money from KiwiSaver scheme funds. “If you really, really desperately need that money, that’s an option you’re going to take.”
Long-term, this would have a negative outcome as Fage said people would diminish the size of their retirement savings, which would lessen their financial security as they grew older.
Although there had been a significant increase in the benefit, it had gone “essentially nowhere”, she said.
“It might have taken pressure off some people but the people we deal with have been cut to the bone already.”
ASB recently forecast a 2 per cent contraction in gross domestic product (GDP) by early 2024, which is double the 1 per cent economic shrink that the bank outlined in its last quarterly update.
Whanganui People’s Centre manager Sharon Semple said the benefit had not been increased enough for people to sustain their health and well-being.
“They might get a benefit increase of $40 but their rent goes up $70.”
Semple had seen a lot more people having to rethink living options as a one-bedroom rental was not affordable for beneficiaries or low-wage earners.
Housing was already at crisis point and had been for some time, she said. “The Kiwi dream is gone, the white picket fence and the half-acre section is no longer there.”
High food prices were increasingly draining services such as the City Mission’s Foodbank, and Semple said there had been an increase in food requests at the Whanganui People’s Centre.
Fage had given out tomato seedlings to clients to try and assist with their basics by growing fruit and vegetables.
The ongoing concern for Whanganui welfare and budgeting services was how long the recession would last, she said.
“How far down do we spiral before we come out the other side?
“We had clients come in a while back saying they’re barely surviving and I can’t imagine how they’re doing now.”
Dr Kristen Hamling, a Whanganui-based registered psychologist specialising in trauma, said once people’s livelihoods were compromised they would not be able to cope with additional stresses.
“If you’re worried about your future in terms of income then everything is going to be affected in your life.
“People will be short-tempered, there may be an increase of conflict, people may perhaps get a little more unwell because stress attacks the immune system, and you’ll see more arguments at home.”
The Whanganui Budget Advisory Service can be contacted on 0800 183 183, or Marton & Districts Budget Service on 06 327 4537.
