Boosting financial capability with Tim Barnett

27 June 2018

Tim Barnett heads the National Building Financial Capability Charitable Trust (NBFCCT) – soon to be re-branded to a more snappy title! - supporting the 198 free budgeting services in Aotearoa. The Trust provides training, data, advocacy, networking and negotiating services. Tim previously ran the Christchurch Community Law Centre, and was MP for Christchurch Central for 12 years.  He has been General Secretary of the NZ Labour Party, and Group Manager – Iwi for Tūhoe.

How did NBFCCT come to be?
We exist because the nation’s well-established network of budgeting services, for many years under the umbrella of the Federation of Family Budgeting Services, became fractured in the past 10 years. I became CEO in June 2017 when the Federation officially closed, and NBFCCT was formed. Most of our funding is from the Ministry of Social Development (MSD) – we have a 10 year contract with them.

And you are soon re-branding?
Yes. We need people to understand what we’re here to do and language is crucial for that understanding. NBFCCT is a mouthful and we weren’t being understood – I was even asked to speak at a couple of building conferences!

Tell us more about the service
New Zealand contains the only budgeting advice network in the world offering face-to-face free services. 198 services employing 1,200 financial mentors.  60,000 people every year come to our services seeking advice. Around 50% are Maori and 15% are Pasifika. The people we see have an average debt of $10,000 – so that’s about $600 million debt a year. The role of the financial mentor is primarily to provide budgeting advice, peer to peer education, and micro-finance advice (debt consolidation, low-interest loans), and beyond.

Our style is enquiry, and engagement. We’re not just a bunch of people sitting in Wellington, we have a wide network to support and communities to serve throughout the country. 

What’s the Trust national office role?
Our broad agency focus is nurturing financial capability and our remit is to bring the sector together. The sector contains and generates a lot of activity, but that only impacts well with coordination. Our primary role is to provide training, advocacy, quality assurance. On top of that, we’re thinking about innovation for the sector. How we can do things differently, guiding our services into the future.
We have a wide network, but we’re not a membership organisation - we’re an operation dedicated to service of those agencies we are devoted to nurturing. Three of our eight board members come from local budgeting services. This is outside a traditional democratic model, we don’t have an elected board. 

What do you think some of the main changes have been over the 50 years some of the budgeting services have been operating in New Zealand communities?
The level of debt and the complexity of debt.  There is more temptation, and more of an aggressive targeting of people with low incomes. So budgeting advice is no longer given in isolation. There is a much bigger gap between rich and poor in New Zealand and a huge increase in the cost of living – daily life is a real struggle for a lot of people.

Tell us about the recent series of hui throughout New Zealand, that Utilities Disputes took part in? 
We’re organising two rounds of hui each year – ten hui in a two-week block. We presented in our recent round to 380 people representing 150 services, including board members, financial mentors and volunteers. We have three staff in attendance and this time we invited the six dispute resolution schemes, including Utilities Disputes, to participate in order to ensure that services know about when and who to refer clients to, and to understand the kinds of cases you see, how you can help.  

What are the areas that need reform as well as support?
Legislative reform is desperately needed in a number of areas, and the Government has begun this work, including, in particular, the CCCFA review. 

Other areas we will be looking to progress include:

1. Advocates and intermediaries: Loan companies are preying on people with low incomes – the levels of debt we’re seeing is distressing. People need more support and protection. 
2. Providing holistic budget advice: traditional budget advice has expanded as in providing this when financial mentors see other issues, family violence, employment, etc
3. Boosting cultural awareness. When considering learning and behaviour, there is a cultural overlay –this cultural understanding must be reflected in our mentoring service, particularly with increased diversity of ethnic communities. 

What excites you?
The potential to actually make a difference to peoples’ lives. Through 198 agencies we have an extraordinary insight into the lives and realities of New Zealanders living on very low incomes. These people are particularly vulnerable to high levels of debt. 
The level of advocacy to date hasn’t been sufficient. We want to make a difference there. It’s a humbling position to be in and we must be deeply respectful of people we serve. All around the country we see stories of hope and people’s realities, with behaviour changing because of the support they’ve received. We see good stories and powerful statistics, and insights that are hard to ignore. 
I am hopeful that current reforms, particularly with the CCCFA (and our network is feeding into the government on that) will create more positive change.

What frustrates you?
I feel frustrated when I see agencies that have served communities for 40 years facing funding cuts. And the glaring gap between what could be achieved and what has been.

What future changes are you looking to make?
We need to be innovative to serve the future. While bringing together a more coherent network and encompassing cultural and ethnic diversity, we must embrace technology. We will expand our helpline: largely channelling calls for people seeking greater financial capability and budgeting support to local services, operating 12 hours a day, 6 days a week; social media; ‘Money Talks’ consumer education; training opportunities; and client voices.

Client voices?
Yes - we will create opportunities for our clients to have a voice and give their insights and stories. They know what poverty means and what loan sharks are doing. We can help empower that voice – we do know about arguing in the right place at the right time and how to respectfully serve these people. The current law reform needs to be informed with the stories from the people themselves. So we will get in front of politicians with people from the services to ensure the right message is getting across. That’s critical. To feed into legislative change with the pragmatic reality, the real insights. 

Effective policy engagement?
Yes that’s right. An example of this is in a small rural community – there were two supermarkets, as soon as one shut down, the other (in spite of promises) increased its prices and that was crippling people. We heard the stories and we were able to support the local budgeting service to get that message to the local MP and mayor. So our service can be a community representative. I see real hope in our potential to help empower the services, clients, reduce inequity and reduce issues of poverty.

Do you engage much with the energy sector? 
Yes we’ll be feeding into the sector review, and we are working on service agreements with power companies – to ensure we have direct contacts and can reach the key people in each company. We’ve been working with ERANZ also, and Work & Income, on those and related matters. We’re going to be working with a whole range of financial service providers – anyone who can end up with customers in debt - on how to better support people on low incomes.

Will you keep working with Utilities Disputes and the other complaints schemes?
Yes we enjoy a good relationship with all of the six schemes – it’s good to work together. We firmly believe that any system must have the consumer focus at its heart. If it’s inevitable to have more than one scheme (for example, in financial services dispute resolution), the consumer must be the key focus. Every effort must be made to ensure that access isn’t hindered. We’re keen to work alongside the schemes and be part of the solution to help people get to where they need to be. We’re interested in both systemic and individual issues.