KEY POINTS:
The lure of easy money has again turned out to be the great leveller, bringing grief to well-off whiteys in Devonport and poor Pacific Islanders of Otara alike.
Ploughing through a depressing report on loan-sharking in South Auckland yesterday, I sought a little diversion in the latest North
& South magazine and came across Warwick Roger confessing he'd just lost his kids' tertiary education nest egg in the Bridgecorp finance company collapse.
Of course when we've done something exceedingly foolish, we all like to flail around a bit, blaming anyone but ourselves. So it's understandable that Mr Roger might zero in on fellow journalists for not alerting "poor fools" like himself that Bridgecorp was "dodgy". In reality, of course, the great writer has long regarded we lowly newspaper hacks as a bunch of useless no-hopers, and wouldn't have taken our advice anyway. But anything, I guess, to avoid this grizzled old investigative reporter having to explain what possessed him to entrust a penny of his hard-earned cash to someone with Rod Petricevic's history. Especially for a rate of return not much better than he could have got from the corner trading bank.
As editor of Metro magazine, Mr Roger chronicled the excesses and the disasters of the crazy 1980s. In October 1989, he penned a long essay on the decade just past. He talked of sad shareholders filing into post-crash meetings of ailing companies, including Mr Petricevic's Euro-National, describing the victims as "middle-aged and elderly mostly, greedy people perhaps who'd got carried away by the illusory promise of easy money."
In the same edition, business writer Selwyn Parker mocked Euro-National's prospectus promises of "large profits" and "long-term growth" as "all so bland, so pat, so naive." Earlier in the year, a Metro analysis of "The Mighty - and their Falls" concluded "Euro-National's chief problem was that it invested in the wrong things and dispensed with the areas which were making money." The people named by writer Jan Corbett were "all victims of their own ambition/greed/stupidity/inexperience - and so are the people who trusted them."
Yet a decade later, Mr Roger handed over his cash to this very chap. He now writes rather plaintively that "everything appeared to be under control, I had no reason to be concerned about Bridgecorp." As he used to often say when we shared a corner at the Auckland Star, "silly boy."
Of course for every lender seeking top returns, there are queues of borrowers at the other end of the chain seeking a better life. Those at the bottom of the financial heap seek to realise their dreams with the help of the fringe money lenders - the shop-front loan sharks.
An Auckland University report commissioned by the Ministry for Consumer Affairs reveals that of the 185 of these fringe money lenders nationwide, 71 of them are concentrated in South Auckland, targeting the Pacific Island communities.
As a Palagi, it comes as something of a relief to discover most of them seem to be fronted by Pacific Islanders, competing with each other to ensnare their own people. The money, of course, comes from further back in the chain, from the suburbanites in wealthier parts of town, seeking "a better return."
Most of the anguish - around 80 per cent - involves loans for cars that have gone wrong. People can't meet the repayments, car's repossessed and sold for a song, then the borrower is hounded for repayment of the difference, plus interest. Default interest rates of 35 per cent are not uncommon.
But the most alarming revelation is that "most Pacific clients who sign contracts are well aware of, and choose to ignore, the inflated interest rates they sign up to "because tomorrow never comes and that's the attitude", or through a sense of complacency, preferring to know only "how much I have to pay every week/month and for how long . . '."
New Zealand is no longer seen as the land of milk and honey to them, but the land "where you hop off the plane and get a loan". It would seem a fool and his money is ripe for the plucking, whatever the culture.
