The Government's plan to make debt collection fairer has been revealed.
More than half a million low income New Zealanders owe $3.5 billion to the Ministry of Social Development, Inland Revenue and the Ministry of Justice.
In 2019 the Welfare Expert Advisory Group recommended that the Government act to reduce the generation of debt by introducing consistent debt collection policies across government agencies.
Some are more zealous than others when going after people for debt.
Now the Government is seeking feedback on its proposal which would see the three government agencies work more closely together and assess someone's total debt, and whether they pursuing them would cause hardship, before deciding whether to chase them for the money.
"This is intended to support the general principle that creation or recovery of a debt should not place the individual and their whānau into hardship or exacerbate existing hardship," the report reads.
Welfare Expert Advisory Group member Kay Brereton told 1News today the government's proposal needed to go further and make it truly government-wide.
"I think this will go a little way to making repayments fairer and to really thinking about the circumstances of the individual but I think we need to take it that extra step.
"So that, if you've got debts with Justice and MSD and IRD and Kāinga Ora that the debts join together and the repayment of all of it is manageable, rather than each chunk being manageable, because that doesn't make it manageable in the whole necessarily."
National's social development spokesperson Louise Upston said the top priority should be helping people so that they don't go into debt in the first place but streamlining debt collection is common sense.
"Consistency is really important, for people who go into debt it really doesn't make too much sense to them that there's a different set of rules from one government department to the other," she said.
The Greens social development spokesperson Ricardo Menéndez March said the Government must ensure its agencies aren't doubling down on getting people into debt.
"No one wins when we have low income communities who are facing more hardship because the agencies who are supposed to help them are actually putting them into poverty."
The Associate Revenue Minister Deborah Russell delayed the release of the Government's Debt Framework document to 1News by two days saying she wanted to stakeholders to be able to read it first.
Dr Russell then also refused to be interviewed by 1News saying she wanted to get feedback on the plan the Government has been working on for four years before commenting publicly.
The consultation period is open until 6 April.
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