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LINDSAY MITCHELL: Writing off beneficiary debt

There is a call from anti-poverty activists for the government to write off beneficiary debt which has grown to over 2.3 billion dollars.


Acquiescing to this demand would create an ever-growing snowball.

Next for consideration would be student debt; debt to the Ministry of Justice for unpaid fines; debt to IRD for unpaid child support payments; debt to Kaianga Ora for overdue rents and more.


After all, many of the people with forgiven Work and Income debt fall into these other categories also. For the sake of consistency, the write-offs should be all encompassing.

In which case, what about debt to the state-owned Kiwibank? Surely it is within the government's grasp to exercise some clemency there as well.

But it isn't fair for only those with debt to Kiwibank to enjoy this relief.


Parliament has the power to make private companies write off debt via legislation.

Highly profitable banks could be forced to write off mortgage debt; finance companies forced to write off car loan debt.


And if Kaianga Ora is writing off tenant debt, shouldn't private landlords be made to do the same?


The list goes on because the rationale for the original demand - that beneficiary debt be written-off - is a constant across all debt.


Debt and its repayment causes hardship; it causes stress sometimes culminating in domestic violence. It can ruin lives, drive people to suicide even.

If the first roll of the snowball is the right and fair thing to do, then so are the subsequent rotations.

While the media is very happy to run with these sorts of demands and soak them in sympathy rather than calm analysis, some of us beg to differ.

Beneficiary debt (other than debt created by state error) has been voluntarily assumed and must be repaid.

Writing off beneficiary debt would simply be another nail in the coffin of personal responsibility and create an extremely dangerous precedent.

Unfortunately, it could just be the life-saving policy the Labour, Maori and Green parties are looking for.




Lindsay Mitchell blogs here

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