A Fate Worse than Debt?

Posted by John-Mark McCafferty  on 26 July 2013 | 0 comments

bankrupt.jpgAusterity isn’t working. Don’t take my word for it; according to the state’s own Central Statistics Office Ireland’s economic growth is back in negative figures. And one of our Troika partners, the IMF, recently admitted that they failed to realise the damage austerity would do in the case of Greece. Yet the deficit facing Government coffers is still huge - €12 billion is one estimate.

Minister Noonan has stated his intention to cut – and that means income supports, public services and more hardship. Austerity is set to deepen at a time when many household budgets are at breaking point and many struggle with debt – unless we say clearly to him and other politicians that we need an end to austerity in Budget 2014 – and that’s where your voice comes in.

It’s not just Ireland that is in debt. Our members tell us that as austerity deepens, the use of licenced moneylenders in their communities is growing, and this is a worrying development. The poorest pay more for these loans than those of us who can access credit union loans or similar. The interest rates associated with moneylenders are high and what appears as easy money up front turns into a significant financial burden in the longer term.

It now emerges that One for All vouchers, an arm of An Post – a trusted service to the community – has an agreement with Provident moneylenders. People who buy these vouchers from Provident pay high rates of interest for a product they cannot use in all shops or services. We’re concerned that agents will push the vouchers instead of cash, limiting choice to the customer who then may sell on the voucher to a third party for much less than the face value. The Provident customer will be left to repay the full face value of the voucher plus interest.

At a time of real financial pressure for many, we do not believe An Post should be involved in such an unsavoury arrangement with a moneylender

Blog post written by John-Mark McCafferty

Head of Social Justice and Policy

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