Simon Collins

Simon Collins is the Herald’s social issues reporter.

Govt urged to offer low-cost loans

Microfinance scheme and rental property 'warrant of fitness' among child poverty group suggestions.

The cost of the rental housing warrant of fitness, aimed at ensuring that children grow up in warm and dry houses. Photo / Getty Images
The cost of the rental housing warrant of fitness, aimed at ensuring that children grow up in warm and dry houses. Photo / Getty Images

Government-backed low-interest loans to undercut "loan sharks" could be on the cards in the wake of a pragmatic final report of an expert group on child poverty.

The experts, appointed by Children's Commissioner Dr Russell Wills, also propose expanding an existing charitable food programme in schools, imposing a "warrant-of-fitness" test on rental housing, creating more teen parent units and school-based social service "hubs", and passing on an initial $10 a week in child support payments to sole parents on benefits.

Finance Minister Bill English and Social Development Minister Paula Bennett gave the revised shortlist of six immediate priorities what Dr Wills called "a warm reception" when they were briefed on the proposals last week.

More radical ideas floated in the group's initial report in August have been relegated in the final report to priorities "over the longer term" when money is available. All but one of the six immediate priorities would involve minimal cost to the Government.

Julie Chapman of the KidsCan charity, which already gets $150,000 a year from the Government, said she could expand her food programme from 5500 children a day at present to meet the estimated need of 16,000 children in decile 1 to 4 schools for an extra $3.8 million - of which she would ask for only half from taxpayers. "We are saying if you guys can fund half, we would work to meet the other half of that cost [from fundraising]," she said.

The cost of the rental housing warrant of fitness, aimed at ensuring that children grow up in warm and dry houses, would fall largely on private landlords, although Dr Wills suggested allowing accelerated depreciation rates for insulation and other work required to bring rental housing up to standard.

The biggest cost of the shortlisted priorities would be between $50 million and $60 million a year to pass on child support to sole parents on benefits.

The proposal to undercut loan sharks through "a private-public partnership microfinancing model with the banking sector and community groups" was the biggest surprise in the list.

Expert group co-chairman Dr Jonathan Boston said the idea was inspired by an Australian scheme run by a charity, Good Shepherd Microfinance, using capital from the National Australia Bank (NAB) to lend to low-income families to buy essential household items at no interest, or cars and other items at low interest.

Social Development Minister Paula Bennett said the Government would consider recommendations including "warrants of fitness" for rental homes to ensure they were warm and healthy.

Green Party co-leader Metiria Turei urged the Government to consider the universal allowance which she said was the fairest way to ensure all children had a good start.

Labour spokeswoman Jacinda Ardern said many of the "long-term recommendations tallied with Labour policies and she would support a new law setting out ways to measure poverty".

Top 6 priorities

*Pass on child support to sole parents on benefits.
*Warrant of fitness for rental housing.
*Low-interest loans for low-income families.
*Food in schools programme.
*More teen parent units.
*Social service hubs at schools and preschools.

- NZ Herald

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