Thursday, February 25, 2010

Loans impossible for 20% of Aussies

Not so long ago, when I was looking for work and living 25 miles from a town, my car's gearbox died. I tried to borrow $1,200 from the Bananacoast Credit Union, the banking institution to which I have been loyal for years. "Sorry", said the manager. "Your income is insufficient. We, and all other lending institutions in Australia, have worked out a formula. We all use the same algorithm. You can try any bank, but the answer will be 'No', wherever you go."

"But I can easily repay this small loan, very easily", I said, "at $20 a week." "Sorry," said the banker. "I know you can, I trust you can. I used to write 15 or 20 such loans a week, and we never had a defaulter, because we took the repayments out when their social security payment came into their account each fortnight. But, sorry, I'm not allowed to do it any more. Nobody in Australia can. All the banks have colluded, and that's that. Sorry, mate. That's final. I know it's wrong, but I have to do what the banking cartels demand of me. Good luck."

I asked the advice of the Salvation Army, St Vincent de Paul, the Neighbourhood Centre counsellors, and every other agency I could think of -- not asking for a handout, but for advice. None of them could give me such advice, just sympathy, which didn't help get my car going so I could drive from the bush to town to look for a job. I phoned every bank in my state of New South Wales, and banks in the state of Victoria. No institution would lend me $1,200, or $500, or $100, nor even one dollar or a million dollars.

Now, consider this. About 20 per cent of Australians receive some kind of social security. If you walk down the street, on average, the occupants of one house in five are unable to borrow one dollar or $10,000 to fix their car, or have surgery, or have their teeth removed, or send their children on a school excursion, or to do anything much at all. This is Australia, of which I was once so proud -- the country that first gave women the right to vote and stand for election, and gave the first pensions, and first gave the world the 8-hour working day.

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