by Sue Bradford
I am alarmed – to put it mildly – by this week’s news of a new company established with the sole purpose of making it easy for tenants to pay their rent by credit card.
Based in Auckland’s K’Rd, ‘RentExpress’ charges tenants a ‘small’ fee for the privilege of paying their rent on tick.
Landlords and property managers, on the other hand, are not charged a fee for the service.
As we enter a period of deepening financial stress and hardship for many low and middle income New Zealanders, making it easier for people to pay their rent by credit is the last thing any ethical company should be doing.
Of course I accept the democratic right of those involved in RentExpress to establish a business based on extracting money from tenants for the privilege of getting even deeper into debt.
However, I fear that the new business will simply end up causing even greater long term debt among those least able to pay it back.
There is also a risk that landlords could end up requiring tenants to sign up to ‘RentExpress’ as a condition of tenancy. There appears to be nothing in the Residential Tenancies Act to stop this happening.
The Green Party would far rather see the establishment of a Rent Express scheme such as that run by the Stratford-on-Avon District Council in the UK.
Stratford’s scheme involves council housing advisers providing cash deposits and advance rent payments to landlords on behalf of low income tenants, and acting as a guarantor for the tenants involved.
Unlike the New Zealand model, Rent Express schemes like Stratford’s would be a wonderful contribution our local councils could make to helping struggling tenants, and their landlords.
Published in Economy, Work, & Welfare by Sue Bradford on Wed, December 3rd, 2008
Tags: tenancy
More posts by Sue Bradford | more about Sue Bradford
on the trolls and those who are unable to keep on topic
It is NOT the place of the tax payer of the rate payer to guarantee rents to Landlords.
There is already enough pressure on middle NZ to pay for the upkeep of other people’s kids and now you want them to pay more by way of rental payments to private landlords.
It might have escaped you Sue but the vast majority of Kiwi’s are sick of handing out money to people who do not want to work or are to lazy to make themselves more valuable in a tightening Labour market.
The “Rent Express” card sounds like a great idea.
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Ye gods, Sue, you are completely out of your mind? What have you been smoking?
Please could you list what other things that one is “alarmed” that you can pay by credit card. For example:
Parking fees
Groceries
Event tickets
Doctors
You get the drift
All this company are doing is being a PayPal for landlords and tenents. Except unlike PayPal they charge the buyer rather than the seller. Still better than Ticketek et al, which charge both buyer and seller…
Wish I’d thought of this.
On the other hand, Rent Express are going to make very little money per transaction on this, the 3% has to cover the fees from the credit card company, and the fees from DPS, so I reckon they’ll get 0.5% if they are lucky and get some volume going. Still, get enough volume and 0.5% margin is enough to be happy on for a small company.
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Ok, what have I dont to annoy the automoderator. Perhaps it doesn’t like the truth… Paging the frog…
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big bro, the fact is that schemes which prevent low income people from falling into debt traps often actually save the taxpayer money. They give people a post to lean on while getting back on to their own two feet.
The main difference between the private scheme and the public one is that the public one doesn’t see mounting interest piled on to debts. The debt trap is a nightmare for everyone who has to deal with its effects.
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I don’t think I agree with either of these schemes.
Seems to me they’re both devices to enable landlords to continue charging higher rents than the market can bear.
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george
The fact is that the scheme as suggested by Sue means that once again the tax payer is being asked to fund or guarantee rentals for those who are more than likely unemployed or take no personal responsibility for themselves.
To be blunt George, I don’t care if these people get into debt, I do not care if they fall on hard times as I am sick of funding their lifestyles as it is, it is better that they fall into debt than for me to have to pay for it.
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Problem is George there is no incentive once in the debt trap, to get out of it if the tax payer keeps on topping up the rent due book.
It will be a continuing downward spiral until the tax payer cant pay anymore and in fact actually slide into the rent trap as well.
Wonder if Sue will be brave enough to put a time limit on those trapped individuals to untrap themselves?
And where pray will the money come from? What tax will you raise or other expenditure cut, to pay for this innitiative?
emeber the government has to find an extra billion for ACC, the Kyoto provisions are not even in the budget, etc, etc.
Reminds me of a lot of other green policies, lot of rhetoric but no price tag.
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>
“Of course I accept the democratic right of those involved in RentExpress to establish a business based on extracting money from tenants for the privilege of getting even deeper into debt.”
>
Interesting Sue. Having accepted that Democratic right, you seem to want to take away the democratic right of Landlords to get paid on time, or, as others have said, make the tax- or rate-payer fund a lifestyle that doesn’t include paying the rent first.
Seems to me that way back in my youth I was told that money in always had to travel to its proper destination quickly. First the rent, then the insurance, then the ‘bills’, then food, then clothes’ if you were then lucky enough to have money you hadn’t spent, it was OK to do what you like with it, as long as that included saving half for ‘in-case’. Today’s children are not taught these lessons, either at school or at home; a bad reflection of the socialism that has pervaded our lives since I, and my children, was young!
People have to take responsibility for their own actions and welfare. When we provide support to people, through a welfare payment system, we include money for rent, if that is not passed on to the landlord I have no intent of providing it a second time!
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All the more reason to pay the benefit in voucher form I would have thought, one rental voucher, one food voucher, one power voucher etc.
Nothing for booze, drugs or KFC.
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Dave S Says:
December 3rd, 2008 at 2:09 pm
>> Seems to me that way back in my youth I was told that money in always had to travel to its proper destination quickly. First the rent, then the insurance, then the ‘bills’, then food, then clothes’ if you were then lucky enough to have money you hadn’t spent, it was OK to do what you like with it, as long as that included saving half for ‘in-case’. Today’s children are not taught these lessons, either at school or at home; a bad reflection of the socialism that has pervaded our lives since I, and my children, was young!
I understand that in the 1950s, when the New Zealand government was at its most socialist, children were taught that.
I think the Student Loans scheme bears a large responsibility for teaching people to think of going into debt to buy consumables as ‘normal’.
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Strange as you may find this BB, the Greens have long advocated people who have problems managing their finances having an option of their rent being deducted by Work and Income at source and paid directly to the landlord. But Work and Income will do it only for Housing NZ, not for private landlords.
So seems we do agree on some things – both this and discouraging the overconsumption of booze, drugs and KFC (personally, I’d discourage any consumption of KFC at all).
What I do not agree with is encouraging people to pay their rent by credit card. The whole global recession we are in at the moment is based on people financing lifestyles they cannot afford on debt and the willingness of financial institutions to support this. People who are having financial mamagement problems will only see them exacerbated if the option of paying their rent on credit is facilitated.
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There should be no option Toad, if you receive a handout from the tax payer by way of an unemployment, sickness or invalids benefit then it should not be in monetary form.
And as for those who have “financial management problems”, well they could always try getting a job or training themselves up for a better one, the few really smart ones might even try not to have kids they cannot afford.
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This isn’t for the sake of “big bro”, but it needs to be reiterated that not everybody receiving a benefit needs to be treated like a five year old to sort out their finances.
Most beneficiaries are people who’ve found themselves on the wrong side of hard luck, and are quite capable of paying the rent out of their meagre incomes. The real ‘nanny state’ is the one that treats people like complete idiots, controls their lives and takes away their freedoms, just because there are a few who can’t get their budgets right.
big bro obviously hasn’t had anything to do with WINZ in any capacity in the last 15 years, otherwise he would know that beneficiaries of all types are hounded to get a job, any job, as soon as possible. It doesn’t matter to them if it makes the person unemployable in their profession, or wastes their skills in a low skilled job – getting them out as soon as possible is still the MO of WINZ.
A government intervention I can wholeheartedly endorse (and I’m almost scared to mention it, for fear of it being savaged by the reactionary right) is HNZ supporting tenants with the establishment of vegetable gardens. It’s absolutely brilliant, good for all involved, and helps provide low cost high value food to an increasing number of NZers.
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George,
not that im disagreeing with your viewpoint, but the example of vouchers that BB cites in no way impinges on freedoms. The people do not have to be given the money, if they accept the money then in doing so they surrender their freedom to spend it how they wish. If they dont want to be told where to spend it then they dont have to take the money and thus they can keep their freedoms.
Also, if people can work, reguardless of the occupation, then they should do so instead of being supported by the state; one is perfectly able to search for a better job once one has a job that will support them temporarily.
And by the way; people are complete idiots, as evidenced by human history; ability, inteligence, and competence are the exceptions to the norm.
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big bro Says:
December 3rd, 2008 at 2:53 pm
> There should be no option Toad, if you receive a handout from the tax payer by way of an unemployment, sickness or invalids benefit then it should not be in monetary form.
most people who have to leave their jobs because of ill-health were perfectly capable of managing their finances when they were working, and they still are capable of managing their finances.
I see no reason why the government should spend heaps of money on employing bureaucrats to do it for them.
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>
I understand that in the 1950s, when the New Zealand government was at its most socialist, children were taught that.
>
Sorry
I was in England. We had a state school system that was streamed, that ensured every child had the opportunity to see a way forward for themselves, and be able to deal with the challenges that that highest path would bring.
Today, after 50 years of Socialist influence on both England and New Zealand, we have a school system that says everyone is the same, that teaches every child that not succeeding is different to failing, that must, by its nature, work to the lowest common denominator. Worse, its only hint of streaming is based on income (decility of schools) not ability or potential (IQ or other learning capability base).
Only when society accepts that we are not all equal. That some people have the ability to take mankind to new horizons while some are challenged keeping the floor of a Mall clean, and that an appropriate understanding of the basics of societal ability (i.e. budgeting and expenditure control,) in all young people is part of what schools must impart. When this has been accepted, and we stop abandoning our children at 18 with an ‘off-you-go’ wave, will we again progress as a society rather than just an economy.
Socialism (the improvement of society) has now been subsumed by communism (the equality of all in the commune) and a sad and perilous time has come upon Western Society. The Chinas, Sri Lankas, Indias, etc., of the world, where education beyond 16 is a privilege granted by society to its worthy members, and high achievement is a goal instilled from birth, are the type of countries to whom the 21st century will belong in the eyes of 22nd century historians!
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Still wondering if my comment from yesterday will ever be released…
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The debt addicts appear to be in control of the banks and surrounding regulatory infrastructure. Oversea, taxpayers are now directly responsible for keeping the debt addicts well fixed up. Locally, our own interest rates are heading for the floor so people can get even MORE cheap debt……effectively ‘taxing’ savers to lowering their returns so debt addicts can carry on this whole unsustainable charade.
Paying rent by credit card is easy and always has been: get a cash advance.
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I’ve lost the logic in this thread.
Surely RentExpress is just a service rather than a finance company. It is still the banks that are responsible for offering responsible credit limits to their customers. I would be happy paying my rent on credit card, just like I do my supermarket shopping and air tickets.
The extra fee imposed by RentExpress will be incorporated into market prices for flat rental. It will be a drop in the bucket especially when competitors come onto the market.
Lets not get sidetrackked from the issue that it is the major banks that control our money and cynically attempt to maximise peoples debt to the greatest sustainable level.
It also amuses me that great thinkers like Big Bro always pick on the in debt, uneducated, lazy, beneficiary, I think recent events have shown that the level of beneficiary debt is far less of a problem than that of blue collar and white collar workers.
I’m all for voucher systems. Lets forget rights and talk responsibilities. We have the responsibility to look after those for who things have gone astray, they have the responsibility to make the most of this help that we give them.
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RentExpress is just a service company yes, with no relevance to any of the social issues that have been discussed in this thread.
My post from yesterday that pointed this out still hasn’t appeared…
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Dave,
The schools based around the Grammar school model still use a streaming system, though they are almost exclusivly all-male schools.
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Sapient,
or private schools. They stream too, as well as offering internationally recognised qualifications.
I have a friend whose daughter came to live here with him for two years. She’s applied for UK University, and been told that she will have to go back to the UK and sit GCSE in April irrespective of what grades she gets in L3. How good is that?
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Dave,
Yeah, Ive never been to a private school (only state grammar and catholic chartered) so i thought i would only talk about what i know
The grammar school which i attended also offered cambridge examinations to the higher streams to provide an international recognition. I think that is becoming increasingly common as ncea settles in further and its inadiquacies become more apparent. Being in the top stream, i was a year ahead of the other streams and i just happened to be doing level one on the first year it was introduced, nasty.
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I am alarmed – to put it mildly – by the response from Sue Bradford in regards to the new and innovative company that is taking a quantum technological leap towards providing New Zealanders with a service that most other developed countries already have. They are not forcing people to use the service and if people are unable to manage their debt then they only have themselves to blame. I for one will be using the service regularly to gain air points on my credit card. The tall poppy syndrome seems to be rearing its ugly head here, we should be embracing and encouraging technology innovators not crucifying them.
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Sapient
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We put everything on our credit card. We pay it off in full after 55 days. This is prudent financial management.
If I was a renter, I’d weigh the cost of paying by this method (fee) vs the benefits (bonus points/air miles/etc). As a landlord, it appeals because chasing rent is a cost we already face. That cost is built into the rent now. If this method works out cheaper for all concerned, then what’s the problem?
Heaven forbid personal responsibility should come into the equation.
PS: I already gave at the IRD. I’m NOT giving AGAIN to those who blow their rent money on non-essentials.
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“I’m NOT giving AGAIN to those who blow their rent money on non-essentials.”
Like the greedy finance companies who now expect nanny state to bail them out to the tune of trillions. the few people on benefits who abuse the system are a drop in the ocean in comparison to these bludgers.
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“Strange as you may find this BB, the Greens have long advocated people who have problems managing their finances having an option of their rent being deducted by Work and Income at source and paid directly to the landlord. But Work and Income will do it only for Housing NZ, not for private landlords.”
This sounds like a great solution. One of the wonderful things about being granted government housing when you are very poor as I have been, is that it takes away the worry about where your rent will come from, so you can focus on things like improving your circumstances.
There’s an assumption in some comments here that people who can’t pay rent are spending their pay, however low it is, on non-essentials. People leaving these comments are out of touch with the nation’s poor. Living on a benefit or low income is hard and something as simple as living alone makes it even more expensive when you have to cover all the bills.
Count yourself lucky you can afford internet access and have the time to sit about posting on blogs.
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