Poverty hurts more than just your hip pocket

We all deserve to live with dignity and respect – it is our human right.

The United Nations declared 17 October as International Day for the Eradication of Poverty, and seventeen years ago Australia joined in the cause with Anti-Poverty Week, which will be observed between 13-19 October this year.

The Salvation Army has joined in this cause; a cause to end the financial consequences of poverty and all that goes with it because the real cost of poverty is much more than just your finances. It hurts people in more ways than one.

People tell us their financial challenges are costing them socially, as they can’t afford social outings. They tell us their intimate relationships have become strained, often to breaking point, as the family feels the pinch of the penny every day. We’ve had people tell us they can’t sleep or find respite from their worries. They tell us they’re suffering in every aspect of their lives as they cannot afford medication or dental work or essential car parts to pass a vehicle registration test.

We see first-hand the challenges they face in trying to choose between paying for housing (rent or mortgage), food on the table, petrol in the car, money for shoes or utility bills – all while trying to stay connected with an internet and phone plan.                                                                  
We see the difficulty and hesitation they feel when revealing their story to a stranger, together with the lack of freedom they are feeling, the uncertainty they feel for their future, and too frequently, the expensive and exploitative financial products they resort to, that cause the most harm.

In our efforts to eradicate poverty, we are calling for the implementation of all recommendations from the Banking Royal Commission and the Senate Inquiry into Credit and Financial services targeted at people in financial hardship, as this will bring us one step closer to our aim of eradicating poverty.

In our daily dealings, we come across countless cases that show the cyclical damage pay-day loans and consumer leases have on people. Ahmed took on over 20 payday loans that were easy to find and sign up online. Mina paid seven times the value of her bed when she financed it through a consumer lease. Angela and Michael were given a personal loan for a car and sold various insurance products that provided little or no value.

We have also found that personal loans, credit cards, and electricity bills are the most common forms of debt. What people need is responsible lending rules for all financial products, affordable housing so electricity bills can be paid, and an increase in the Newstart Allowance rate.

Therefore, in light of these happenings, we aim to call for the implementation of the recommendations of the Banking Royal Commission and Senate Inquiry for this year’s Anti-Poverty Week.

These recommendations are important steps for people like Ahmed, Mina, Angela and Michael, for people like you and me and our families, who, through one small event, like the loss of employment, relationship breakdown or illness – can plummet into financial hardship.

We continue to work alongside people and families who are facing tough times, often through no fault of their own, and we will keep going so all people can live with dignity and respect.

If you would like to find ways to be smarter with your money, visit our Financial Assistance pages where you can find out more about Moneycare financial counselling and other ways we can help.