More fall into debt trap

By Paul Dunlop
DEBT-strapped local families are seeking help for financial woes in ever-increasing numbers and concerned counsellors say the demand is only going to increase as more and more residents seek to cope with rising household costs.
The Pakenham-based chairperson of the Financial and Consumer Rights Council, Kathleen Hosie, said there was a disturbing level of credit over-commitment in the area.
Financial counsellors were fielding inquiries from at least 20 new clients a month, with many of those facing bankruptcy.
Recent interest rate hikes and continuing concerns about housing affordability, were exacerbating the situation, Ms Hosie said.
“We are really worried about the level of personal debt many people have,” she said.
“A lot of people are coming to us saying they are spending up to or more than 30 per cent of their income on their mortgage or their rent. Once you get to that level of commitment things can get very difficult.
“It only takes an unexpected bill to send some people over the brink. It’s a problem right across the state, but certainly in growth areas like Pakenham and the Casey Cardinia area it is being felt the most.”
The Financial and Consumer Rights Council recently discussed challenges affecting people, particularly those with low incomes, at its annual conference.
Ms Hosie said the level of demand for financial counselling in the local area was definitely on the rise. She also expressed concern for the many people who were in trouble but had not yet sought help.
The coordinator of the 4Cs (Cardinia Combined Churches Caring) Food Bank, Jeni Mathieson, said she had also experienced more and more people coming to the charity for food and other supplies.
Ms Mathieson said the 4Cs had grown beyond expectations since its opening in June 1997 and shared Ms Hosie’s expectation that the need for support was only going to increase.
“The cost of petrol really hits hard in outlying areas,” she said.
“Mortgages and serious illnesses are big issues. Some people are paying a large percentage of their weekly wage off their mortgages and if they need car repairs or something like that they have no money for it.”
Civic leaders say the problems are typical of all fast-growth areas.
Cardinia Shire is among several councils seeking greater recognition with a campaign for extra federal funding called Fund the Gap.
Mayor Kate Lempriere said there was an appalling lack of youth facilities and public transport in Cardinia Shire.
Roads, recreation facilities, bike paths, playgrounds, home care for the elderly and education in all its forms, including kindergartens through to technical education facilities, were other pressure points for the shire.
“I hold genuine fear that the lack of social and community infrastructure will have dire short and long-term consequences on our residents, particularly as our population continues to expand rapidly,” she said.