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Government bails out Rex Airlines

<p>The federal government is set to take on Rex Airlines' $50 million debt in order to keep the company, that collapsed on June 30th 2024, servicing regional Australia. </p> <p>Rex has been struggling to stay afloat in the six months since the company entered voluntary administration, with Ernst and Young (EY) appointed administrators, putting a strain on domestic travel to regional areas. </p> <p>Transport Minister Catherine King and Finance Minister Katy Gallagher announced on Thursday that the government would acquire some of Rex's debt to prevent liquidation, which they said would harm regional and remote communities that rely on the carrier.</p> <p>"By acquiring the debt, the government will become the principal secured creditor and will seek to become a voting member of the Committee of Inspection," the ministers said in a joint statement.</p> <p>"Whilst the accelerated initial sale process undertaken by the administrators in mid-2024 did not find a suitable buyer for the airlines' regional operations, the government continues to work closely with the administrators through the extended convening period."</p> <p>"This makes clear the government's ongoing commitment to maintaining access to aviation services for regional and remote communities, and recognises the critical role of the Rex network to local economies."</p> <p>Ernst and Young has a just few months to secure Rex's commercial future after the Federal Court late last year granted an extension of the voluntary administration to June 30th 2025. </p> <p><em>Image credits: Shutterstock</em></p>

Domestic Travel

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Readers response: What has been your approach to reducing or managing debt in retirement?

<p>We asked our readers for their holy grail tips for easing financial strain during retirement years, and the response was overwhelming. Here's what they said.</p> <p><strong>Elaine Ralph</strong> - Don’t accumulate debt, live very lightly, and don’t go to see specialists as they cost a fortune.</p> <p><strong>Karen Howson</strong> - Pay off every debt and stop spending.</p> <p><strong>John Fowler</strong> - We have always budgeted and try to plan for contingencies by allocating for them. We live on our credit card and pay it off when due. My wife has FND so I do all the cooking and keep it simple and cost effective and rarely dine out or eat take away. Our budget has always included allocated "pocket money" for personal spending.</p> <p><strong>Patricia Bennett</strong> - Try to be debt free (particularly mortgages) and stick to a budget.</p> <p><strong>Steve Smith</strong> - Don't have any, and make sure that you can pay your own way 100%. It's called "cut your coat according to your cloth". If you don't know how to budget then learn - it's never ever too late.</p> <p><strong>Barbara Everall</strong> - Stop going out as much as possible avoid the shops.</p> <p><strong>Marie Chong</strong> - Make sure you own your own home, before you retire.</p> <p><strong>Angela Chapman</strong> - Stop spending on unnecessary things.</p> <p><strong>Naomi Jeffrey</strong> - Hope for the best?</p> <p><em>Image credits: Shutterstock </em></p>

Retirement Income

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Retiring with debt? Experts explain downsizing, using super for your mortgage, and pension eligibility

<div class="theconversation-article-body"> <p><em><a href="https://theconversation.com/profiles/kathleen-walsh-218536">Kathleen Walsh</a>, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> and <a href="https://theconversation.com/profiles/jemma-briscoe-2234812">Jemma Briscoe</a>, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a></em></p> <p>About <a href="https://cepar.edu.au/sites/default/files/cepar-research-brief-housing-ageing-australia.pdf">36%</a> of homeowners still have a mortgage when they retire, up from 23% a decade ago.</p> <p>This increase in mortgage debt is due to soaring property prices, <a href="https://www.mlc.com.au/content/dam/mlc/documents/pdf/retirement/retirement-reports-housing-report.pdf">changes in retirement ages</a> and easy access to <a href="https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/home-equity-access-scheme">drawdown equity loans</a> (where you use your home as security to get a loan, which can be used to fund travel, medical costs and other expenses).</p> <p>So, what are the options for homeowners who carry debt into retirement?</p> <h2>Option 1: keeping the home and the debt</h2> <p>If you keep the family home in retirement, you get to own a property and can still receive the <a href="https://www.dva.gov.au/get-support/financial-support/income-support/what-changes-your-payments/your-property-or-accommodation/how-owning-home-can-affect-pensions-and-payments">age pension</a>.</p> <p>For example: Jackie has a home worth A$2 million with a $200,000 mortgage. She also has $800,000 in superannuation. She is 67 but is not eligible for the age pension because her <a href="https://moneysmart.gov.au/how-super-works/tax-and-super#:%7E:text=If%20you're%20aged%2060%20or%20over%20and%20withdraw%20a,as%20a%20public%20sector%20fund.">assessable assets</a> – her super – is above the $695,500 cut off.</p> <p>If Jackie takes $200,000 from her super and repays the outstanding mortgage debt, she will save on interest and principal repayments for the next ten years. She will also reduce her assessable assets by $200,000. This makes her eligible for a part pension.</p> <p>So while Jackie has less super, she gets to receive a pension and gets all the subsidies associated with being a pensioner.</p> <h2>Option 2: downsizing to clear the debt</h2> <p>Downsizing can extinguish any remaining debt, and can free up money for holidays, restaurants and the good life in retirement. It also enables a move to a more age-friendly home or apartment.</p> <p>And the government does provide a superannuation incentive via the <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/downsizer-super-contributions">downsizing contribution</a>.</p> <p>This allows homeowners over 55 who have lived in their home for more than ten years to make a one-off contribution of $300,000 (singles) and $600,000 (couples) to their super, using money from the sale of their home.</p> <p>But when a person reaches pension age, currently 67, any money in super will be included in <a href="https://www.servicesaustralia.gov.au/deeming?context=22526">the government’s assessment</a> of your financial assets and income. It could mean you don’t qualify for a pension or pensioner subsidies.</p> <p>Of the approximately 2.6 million who receive a part or full the age pension, only <a href="https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/super-statistics/downsizer-super-contributions-data">78,000 people</a> have taken up this initiative. That begs the question if this option really does create a true financial downsizing incentive.</p> <p>Think again of Jackie, the woman with the $2 million home and the $200,000 in mortgage debt. Say she decides to sell her home and move to a smaller house close to family and friends. This will incur about $40,000 in selling and marketing fees, and stamp duty of around $62,000 on her new $1.4 million apartment.</p> <p>Downsizing leaves her with $1.1 million in financial assets (after transaction costs), which means that Jackie is not eligible for the pension.</p> <p>While she’ll be able to fund a comfortable lifestyle, this decision to downsize may not be as attractive as keeping the house.</p> <p>The decision to sell and move has cost her an extra $100,000 in transaction costs and her pension.</p> <p>So, people need to think carefully about downsizing. It can allow people to move closer to children, grandchildren, and the services they need – but these must be balanced against the financial implications.</p> <h2>What about renters?</h2> <p>Paying market rent while on a fixed income can be very hard, so renting is a challenge for retirees.</p> <p>According to the <a href="https://www.abs.gov.au/statistics/people/housing/housing-census/latest-release">2021 census</a>, women aged 55-64 and those over 65 are among the fastest-growing groups experiencing homelessness.</p> <p>The good news is many profit and not-for-profit retirement communities provide rental models and discounted entry contributions to residents with limited means (but there are often waiting lists).</p> <p>Retirement village residents may also be eligible for <a href="https://guides.dss.gov.au/social-security-guide/4/6/4/30">rent assistance</a> depending on their circumstances.</p> <p>Rent assistance is an extra $5,751 per year in social security benefits and provides extra financial support to <a href="https://guides.dss.gov.au/social-security-guide/5/1/7/10">eligible age pension recipients</a>.</p> <p>Retirement communities provide vulnerable older Australians a unique opportunity to move into a community under a leasehold or licence agreement. More than 260,000 senior Australians live in about <a href="https://www.propertycouncil.com.au/media-releases/retirement-living-construction-leads-wary-market">2,500 retirement communities</a> across the country.</p> <p>While a retirement village may not be the first option for many retirees, they can provide affordable accommodation.</p> <h2>Making the best choice</h2> <p>Navigating housing decisions as you approach retirement means balancing financial, emotional, and lifestyle considerations.</p> <p>Homeowners retiring with a mortgage face a choice: keep their home or downsize to alleviate debt.</p> <p>Keeping the home and accessing super to pay the outstanding debt improves cash flow and allows you to keep your biggest asset.</p> <p>Downsizing helps eliminate debt and boosts the super balance, but comes with extra transaction costs (and you may end up with less pension, or none at all).</p> <p>Seeking professional <a href="https://moneysmart.gov.au/financial-advice/choosing-a-financial-adviser">financial advice</a> is crucial, and ensure they are a registered <a href="https://moneysmart.gov.au/financial-advice/financial-advisers-register">financial advisor</a>.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/240679/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/kathleen-walsh-218536">Kathleen Walsh</a>, Professor of Finance, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a> and <a href="https://theconversation.com/profiles/jemma-briscoe-2234812">Jemma Briscoe</a>, Adjunct lecturer in finance, <a href="https://theconversation.com/institutions/university-of-technology-sydney-936">University of Technology Sydney</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/retiring-with-debt-experts-explain-downsizing-using-super-for-your-mortgage-and-pension-eligibility-240679">original article</a>.</em></p> </div>

Retirement Income

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Borrowing money isn’t always a bad thing – debt can be a sensible way to build wealth

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/bomikazi-zeka-680577">Bomikazi Zeka</a>, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p>Debt, in some form or another, is part of our financial profiles whether we like it or not. And it can be a useful way to build wealth if it is managed carefully and wisely.</p> <p>For example, you may borrow money from the bank to buy an asset – a resource of economic value that generates income from its productive use. Investment property is an example.</p> <p>So investing in an income-producing property can be a good idea.</p> <p>If you are already in the property market, the home equity you’ve accumulated – the share of the property value that’s yours – can help you buy a second property. This time, you may not need a deposit as big as the initial investment.</p> <p>In the event that the rental market is booming and your tenants pay you more than what you repay on the loan, municipal rates and property manager fees, then the wealth-building machine will start to run itself.</p> <p>But debt makes many people uncomfortable.</p> <p>In South Africa, a person earning R20,000 a month commits on average <a href="https://businesstech.co.za/news/finance/585372/south-africas-middle-class-is-in-serious-trouble-right-now/">63% of their salary to repaying unsecured debt</a> – such as credit cards, personal loans, overdrafts or “buy now, pay later” facilities. As a general guideline, it’s suggested that <a href="https://www.investopedia.com/terms/d/dti.asp">no more than 40%</a> of your income should be used to service debt.</p> <p>Financial anxiety has its roots in some misconceptions. The main one is that all debt is bad. This isn’t true. Prudent borrowing to buy an asset can help build wealth in the medium to long term. So fears about debt need to be weighed against a broader understanding of wealth accumulation. Well-managed debt can play a role in that process.</p> <p>Here are the four biggest misconceptions about debt. Recognising them will help you develop a more nuanced approach to debt.</p> <h2>The misconceptions</h2> <p><strong>All debt is bad debt.</strong></p> <p>Indeed, debt is a problem when you can no longer manage it and it starts to manage you. One of the simplest ways to tell whether debt is working for you or against you is through “leveraging”. This refers to the use of debt to acquire an asset that is worth more than the value of the debt. It’s also known as positive or favourable leveraging.</p> <p>People who take out unsecured loans are leveraging unfavourably when the debt is driven by consumption. Often there’s nothing to show for what you’ve spent. Unsecured loans also tend to charge higher interest rates to compensate for the lack of collateral.</p> <p><strong>Only financially reckless people are in debt.</strong></p> <p>This is the next misconception. Second to unsecured loans, most South African consumer debt portfolios are taken up by <a href="https://businesstech.co.za/news/wealth/617685/these-income-levels-in-south-africa-owe-the-most-debt/">home loans</a>. The most realistic way to gain entry into the housing market is through a mortgage. You’re doing the right thing if your mortgage is paid off within a reasonable time. This will mean that, in the long term, the value of the property will surpass the home loan amount that was taken out to buy the property in the first place.</p> <p>But there are two misconceptions related specifically to mortgages.</p> <p><strong>After you’ve paid the mortgage deposit, you won’t have other fees to pay.</strong></p> <p>This isn’t correct. Banks charge a fee to open and close a home loan account. There can also be a penalty when a home loan is repaid prematurely. So be sure to read the fine print about discharge fees or closing costs.</p> <p><strong>If you stick to the repayment amount for your mortgage, you’ll be able to repay the loan quickly.</strong></p> <p>This isn’t true – even if interest rates fall and your mortgage repayments decline, your home loan is most likely tied to a loan term of 20 to 30 years. Many banks will quote a monthly mortgage repayment amount that seems affordable at face value but is in fact based on a 20-year term period.</p> <p>Banks are businesses and it works in their favour if you take longer to repay your mortgage because that translates into more interest repayments. The longer the duration of the home loan, the more interest you pay, the more profit they make.</p> <p>If it takes over 20 years to repay a bond, it’s often the case that the value of the interest repayments exceeds the initial loan amount.</p> <p>Home loan calculators are a useful tool that can help you assess how much you could afford to repay on a home loan depending on the deposit saved, if interest rates change and how long it will take you to repay the mortgage with topped-up contributions.</p> <p>It is essential to have a goal for when you’d like to finish paying off your mortgage and a plan in place to achieve this goal. If you don’t do this you could become a mortgage prisoner.</p> <h2>Keeping your eye on the prize</h2> <p>As we’re about to conclude the year and enter the festive season, it’s a good time to remember your financial goals and not let your guard down by unconsciously swiping or tapping that credit card.</p> <p>“Janu-worry” is around the corner, and so is the financial anxiety that comes with it. But it need not be the case. Debt can either be the cure or the cause of your financial position. Reconsider spending patterns that prompt you to use your credit card. Too much debt over short periods is an irregular spending pattern that is a warning sign.</p> <p>There’s no harm in buying what you can afford or staying in your financial lane if the alternative forces you to sacrifice your hard-earned income on servicing consumption-driven debt.</p> <p>For better or worse, debt is a part of our financial portfolios. But the road to financial empowerment is not always easy – financial planning can help you keep your eye on the prize.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/192630/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/bomikazi-zeka-680577"><em>Bomikazi Zeka</em></a><em>, Assistant Professor in Finance and Financial Planning, <a href="https://theconversation.com/institutions/university-of-canberra-865">University of Canberra</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/borrowing-money-isnt-always-a-bad-thing-debt-can-be-a-sensible-way-to-build-wealth-192630">original article</a>.</em></p> </div>

Money & Banking

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Aussies top global list for biggest gambling losses

<p>A new report has revealed that Australians are the biggest gambling losers in the world, with the average Australian adult gambling away $1635 per year according to the Grattan Institute think tank. </p> <p>That is more than most households pay for power and exceeds the average spend in similar countries like the US and New Zealand. </p> <p>Collectively, Australians lost $24 billion to gambling in 2020-21, with half of that amount lost through poker machines. </p> <p>The rest was lost on sports or race betting, in casinos, and on lotteries and Keno. </p> <p>The report also claims that there are more pokies than post boxes and public toilets across Australia, bringing light to the "lax approach" that has let the industry "run wild". </p> <p>"Gambling products are designed to be addictive, and the consequences can be catastrophic: job loss, bankruptcy, relationship breakdown, family violence, even suicide," the report's authors wrote.</p> <p>People in the Northern Territory and NSW lost the most amount of money, with the two states having the highest concentration of polies in their jurisdiction. </p> <p>The report recommended the federal government ban all gambling advertisements and urged them to cut the number of pokies in each state over time.</p> <p>They also suggested a mandatory pre-commitment system for online gambling and pokies, which would put a limit on daily losses. </p> <p>There are many different ways to get help and information about gambling. Call the National Gambling Helpline on 1800 858 858; use <a href="https://www.gamblinghelponline.org.au/tools-resources/chat-counselling" target="_blank" rel="noopener">online counselling</a>. </p> <p><em>Images: </em><em>SNEHIT PHOTO / Shutterstock.com</em></p> <p> </p>

Money & Banking

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Michael Jackson's staggering debt revealed

<p>Michael Jackson was reportedly drowning in massive debt at the time of his death in 2009. </p> <p>According to newly released court documents, the late King of Pop owed more than $500 million ($747.05 million AUD) to more than 65 creditors just before he passed.</p> <p>Jackson had “more than half a dozen lawsuits pending worldwide” and more than “65 creditors’ claims were filed in the estate spawning additional lawsuits, of which several resulted in litigation,” the documents state. </p> <p>According to the documents, that were filed in a Los Angeles court on June 21st, the executors of Jackson's will were able to “renegotiate and restructure financing arrangements,” including a lucrative deal with Sony over rights he had to music publishing for several artists, at “substantially reduced interest rates” to avoid further losses and rectify the debts.</p> <p>The $750 million ($1.120 billion AUD) agreement allowed Sony to acquire Sony/ATV, which held the rights to almost 3 million famous songs from artists including John Lennon and Paul McCartney, David Bowie and Taylor Swift.</p> <p>Despite settling the major agreement with the record label, the Jackson estate still reportedly owes a significant amount of money as “there remain challenging business, tax and legal issues that the executers and their counsel continue to deal with.”</p> <p>The filing reportedly also notes a pending final decision on a victory in a 2021 court battle with the IRS.</p> <p>Jackson’s three children, Prince, 27, Paris, 26, and Bigi Jackson, 22 — who are the beneficiaries of his estate — have been blocked from receiving money from their trust until the IRS dispute has been settled.</p> <p>A spokesperson for the estate clarified, “The estate has a very cooperative relationship with Michael’s children and whenever they need anything, the estate works with them to ensure that they are very well taken care of, just as Michael would have wanted.”</p> <p>The <em>Los Angeles Times</em> previously reported that Michael accrued so much debt largely in part because of his excessive spending habits, which were aired during his 2003 interview with Martin Bashir that laid bare his extravagant spending. </p> <p><em>Image credits: Mousse/ABACA/Shutterstock Editorial </em></p>

Money & Banking

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What are ‘good’ and ‘bad’ debts, and which should I pay off first?

<p><em><a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a></em></p> <p>With the cost of living soaring and many struggling to get a pay rise, it’s not surprising people are using debt to navigate life’s financial twists and turns.</p> <p>Owing money can sometimes feel challenging, but not all debts should keep you awake at night.</p> <p>So which debts are good and which are bad? And in what order should you pay them off? As it all depends on your personal circumstances, all I can offer is general information and not financial advice. Ideally, you should seek guidance from an accredited financial adviser. But in the meantime, here are some ideas to consider.</p> <h2>What is a ‘good debt’?</h2> <p>Good debts can be strategic tools and help build a solid foundation for your future. They usually increase your net worth by helping you generate income or buy assets that increase in value.</p> <p>With good debts, you usually get back more than what you pay for. They usually have lower interest rates and longer repayment terms. But personal finance is dynamic, and the line between good and bad debt can be nuanced. If not managed properly, even good debts can cause problems.</p> <p>Some examples of “good debts” might include:</p> <p><strong>Mortgages</strong>: A mortgage allows you to buy a house, which is an asset that generally increases in value over time. You may potentially get tax advantages, such as <a href="https://www.ato.gov.au/forms-and-instructions/rental-properties-2023/other-tax-considerations">negative gearing</a>, through investment properties. However, it’s crucial not to overstretch yourself and turn a mortgage into a nightmare. As a rule of thumb, try avoid spending <a href="https://www.cnbc.com/select/mortgage-affordability/">more than 30% of your income</a> per year on your mortgage repayments.</p> <p><strong>Student loans</strong>: Education is an investment in yourself. Used well, student loans (such as <a href="https://www.studyassist.gov.au/help-loans/hecs-help">HECS-HELP</a>) can be the ticket to a higher-paying job and better career opportunities.</p> <h2>What is a ‘bad debt’?</h2> <p>“Bad debts” undermine your financial stability and can hinder your financial progress. They usually come with high interest rates and short repayment terms, making them more challenging to pay off. They can lead to a vicious cycle of debt.</p> <p>Examples of bad debts include:</p> <p><strong>Payday loans</strong>: A payday loan offers a quick fix for people in a financial tight spot. However, their steep interest rates, high fees and tight repayment terms often end up worsening a person’s financial problems. The interest and fee you may end up paying can get close to the loan amount itself.</p> <p><strong>Credit card debt:</strong> Credit cards can be like quicksand for your finances. If you don’t pay off your purchase on time, you’ll be subject to an annual interest rate of around <a href="https://www.rba.gov.au/statistics/tables/">19.94%</a>. For a A$3,000 credit card debt, for example, that could mean paying nearly $600 annual interest. Carrying credit card debt from month to month can lead to a seemingly never-ending debt cycle.</p> <p><strong>Personal loans:</strong> People usually take personal loans from a bank to pay for something special, such as a nice holiday or a car. They often come with higher interest rates, averaging around <a href="https://www.finder.com.au/personal-loans">10%</a>. Spending money that you don’t have can lead to prolonged financial headaches.</p> <p><strong>Buy-now-pay-later services:</strong> Buy-now-pay-later services often provide interest-free instalment options for purchases. This can be tempting, but the account fees and late payment fees associated with buy-now-pay-later services can lead to a long-term financial hangover. The convenience and accessibility of buy-now-pay-later services can also make it easy to get further and further into debt.</p> <h2>So in what order should I pay off my debts?</h2> <p>There is no one right answer to this question, but here are three factors to consider.</p> <p><strong>Prioritise high-interest debts</strong>: Start by confronting the debts with the highest interest rates. This typically includes credit card debt and personal loans. Paying off high-interest debts first can save you money and reduce your total debt faster.</p> <p><strong>Negotiate interest rates or switch lenders:</strong> Don’t be shy. A simple call to your lender requesting a lower rate can make a significant difference. You may also take advantage of sign-on offers and refinancing your loan with a new lender. In the banking business, customers are not usually rewarded for their loyalty.</p> <p><strong>Consider different repayment strategies:</strong> Choose a debt repayment strategy that aligns with your preferences. Some people get a psychological boost from paying off smaller debts first (this is often called the “<a href="https://www.wellsfargo.com/goals-credit/smarter-credit/manage-your-debt/snowball-vs-avalanche-paydown/#:%7E:text=The%20%22snowball%20method%2C%22%20simply,all%20accounts%20are%20paid%20off.">snowball method</a>”). Others focus on high-interest debts (often known as the “<a href="https://www.wellsfargo.com/goals-credit/smarter-credit/manage-your-debt/snowball-vs-avalanche-paydown/#:%7E:text=The%20%22snowball%20method%2C%22%20simply,all%20accounts%20are%20paid%20off.">avalanche method</a>”). Find what works for you. The most important thing is to have a plan and stick to it.</p> <p>Review the terms of each debt carefully. Certain loans offer flexibility in repayment schedules, while others may impose penalties for early settlement. Take note of these conditions as you develop your repayment plan.</p> <p>Debt can be a useful tool or a dangerous trap, depending on how you use it. By understanding the difference between good and bad debts, and by having a smart strategy for paying them off, you can take charge of your financial future.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/217779/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/angel-zhong-1204643"><em>Angel Zhong</em></a><em>, Associate Professor of Finance, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a></em></p> <p><em>Image credits: Getty Images</em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/what-are-good-and-bad-debts-and-which-should-i-pay-off-first-217779">original article</a>.</em></p>

Money & Banking

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5 signs your friend is struggling with serious debt

<p>Money is always going to be a sensitive topic, and part of the reason for this is the fact that so many people willingly suffer in silence. But if you notice the warning signs, you have to take action. Here are five signs your friend is struggling with serious debt.</p> <p><strong>1. They keep cancelling plans</strong></p> <p>Whether you’re talking about dinner, drinks or even just the occasional coffee, if your friend keeps cancelling plans (particularly if they didn’t have a reputation for doing so in the past) that could be a sign that they’re struggling with their finances.</p> <p><strong>2. Unopened bills</strong></p> <p>If you’re visiting your friend’s home and you notice a pile of unopened bills, this is a classic sign of money troubles. Generally these bills are left unopened because the recipient does not want to see what’s inside, or deal with the monetary consequences.</p> <p><strong>3. Sudden changes in behaviour</strong></p> <p>Does your friend seem more fidgety that usual? Do they become cagey or defensive when money matters are mentioned? Are they bitter when discussing other people’s spending habits? This could indicate stress about their own individual financial situation.</p> <p><strong>4. Ignoring calls and knocks on the door</strong></p> <p>If you’ve been staying at your friend’s house and noticed a knock on the door or phone that’s been left unanswered on multiple occasions this could be a very bad sign. Often this is out of fear of dealing with a debt collector who could be on the other side.</p> <p><strong>5. Not adapting to changes in circumstances very well</strong></p> <p>Lifestyle changes generally come with a change in financial circumstances, but if you’ve noticed a sign that your friend is living in the same way that may be a sign that they’re ignoring the demands of their new situation and not putting themselves in a position to succeed.</p> <p><strong>What can I do?</strong></p> <p>Experts recommend taking the following steps if you know a friend who is struggling to deal with debt. That being said, sometimes just providing someone to talk to about it can make all the difference.</p> <ul> <li>Encourage them to talk to their credit provider and discuss payment options.</li> <li>Talk about applying or a hardship variation to help make payments.</li> <li>Direct them to a financial counselling service.</li> <li>Encourage them to take up free legal advice.</li> </ul> <p><em>Image credits: Getty Images</em></p>

Money & Banking

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Forcing people to repay welfare ‘loans’ traps them in a poverty cycle – where is the policy debate about that?

<p><em><a href="https://theconversation.com/profiles/hanna-wilberg-1466649">Hanna Wilberg</a>, <a href="https://theconversation.com/institutions/university-of-auckland-1305">University of Auckland</a></em></p> <p>The National Party’s <a href="https://www.1news.co.nz/2023/09/26/more-sanctions-for-unemployed-beneficiaries-under-national/">pledge to apply sanctions</a> to unemployed people receiving a welfare payment, if they are “persistently” failing to meet the criteria for receiving the benefit, has attracted plenty of comment and <a href="https://www.1news.co.nz/2023/09/26/nationals-benefit-sanctions-plan-cruel-dehumanising-greens/">criticism</a>.</p> <p>Less talked about has been the party’s promise to index benefits to inflation to keep pace with the cost of living. This might at least provide some relief to those struggling to make ends meet on welfare, though is not clear how much difference it would make to the current system of indexing benefits to wages.</p> <p>In any case, this alone it is unlikely to break the cycle of poverty many find themselves in.</p> <p>One of the major drivers of this is the way the welfare system pushes some of the most vulnerable people into debt with loans for things such as school uniforms, power bills and car repairs.</p> <p>The government provides one-off grants to cover benefit shortfalls. But most of these grants are essentially loans.</p> <p>People receiving benefits are required to repay the government through weekly deductions from their normal benefits – which leaves them with even less money to survive on each week.</p> <p>With <a href="https://www.stuff.co.nz/pou-tiaki/132980318/auckland-mother-serves-up-cereal-for-dinner-due-to-rising-food-costs">rising costs</a>, the situation is only getting worse for many of the 351,756 New Zealanders <a href="https://figure.nz/chart/TtiUrpceJruy058e-ITw010dHsM6bvA2a">accessing one of the main benefits</a>.</p> <h2>Our whittled down welfare state</h2> <p>Broadly, there are three levels of government benefits in our current system.</p> <p>The main benefits (such as jobseeker, sole parent and supported living payment) <a href="https://www.workandincome.govt.nz/products/benefit-rates/benefit-rates-april-2023.html">pay a fixed weekly amount</a>. The jobseeker benefit rate is set at NZ$337.74 and sole parents receive $472.79 a week.</p> <p>Those on benefits have access to a second level of benefits – weekly supplementary benefits such as an <a href="https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html">accommodation supplement</a> and other allowances or tax credits.</p> <p>The third level of support is one-off discretionary payments for specific essential needs.</p> <p>Those on benefits cannot realistically make ends meet without repeated use of these one-off payments, unless they use assistance from elsewhere – such as family, charity or borrowing from loan sharks.</p> <p>This problem has been building for decades.</p> <h2>Benefits have been too low for too long</h2> <p>In the 1970s, the <a href="https://mro.massey.ac.nz/handle/10179/12967">Royal Commission on Social Security</a> declared the system should provide “a standard of living consistent with human dignity and approaching that enjoyed by the majority”.</p> <p>But Ruth Richardson’s “<a href="https://www.stuff.co.nz/the-press/christchurch-life/124978983/1991-the-mother-of-all-budgets">mother of all budgets</a>” in 1991 slashed benefits. Rates never recovered and today’s <a href="https://www.1news.co.nz/2022/03/29/benefit-increases-will-still-leave-families-locked-in-poverty/">benefits are not enough to live on</a>.</p> <p>In 2018, the <a href="https://www.weag.govt.nz/">Welfare Expert Advisory Group</a> looked at how much money households need in two lifestyle scenarios: bare essentials and a minimum level of participation in the community, such as playing a sport and taking public transport.</p> <p>The main benefits plus supplementary allowances did not meet the cost of the bare essentials, let alone minimal participation.</p> <p>The Labour government has since <a href="https://www.beehive.govt.nz/release/government-delivers-income-increases-over-14-million-new-zealanders">increased benefit rates</a>, meaning they are now slightly above those recommended by the advisory group. But those recommendations were made in 2019 and don’t take into account the <a href="https://www.stats.govt.nz/news/annual-inflation-at-6-0-percent">sharp rise in inflation</a> since then.</p> <p>Advocacy group <a href="https://fairerfuture.org.nz/">Fairer Future</a> published an updated assessment in 2022 – nine out of 13 types of households still can’t meet their core costs with the current benefit rates.</p> <h2>How ‘advances’ create debt traps</h2> <p>When they don’t have money for an essential need, people on benefits can receive a “special needs grant”, which doesn’t have to be repaid. But in practice, Work and Income virtually never makes this type of grant for anything except food and some other specific items, such as some health travel costs or emergency dental treatment.</p> <p>For <a href="https://www.1news.co.nz/2023/02/27/very-stressful-beneficiary-says-he-cant-afford-msd-debt/">all other essential needs</a> – such as school uniforms, car repairs, replacing essential appliances, overdue rent, power bills and tenancy bonds – a one-off payment called an “advance” is used. Advances are loans and have to be paid back.</p> <p>There are several issues with these types of loans.</p> <p>First, people on benefits are racking up thousands of dollars worth of debts to cover their essential needs. It serves to trap them in financial difficulties for the foreseeable future.</p> <p>As long as they remain on benefits or low incomes, it’s difficult to repay these debts. And the <a href="https://www.legislation.govt.nz/act/public/2018/0032/latest/whole.html">Social Security Act 2018</a> doesn’t allow the Ministry of Social Development (MSD) to waive debts.</p> <h2>Contradictory policies</h2> <p>Another problem is that people on benefits have to start repaying their debt straight away, with weekly deductions coming out of their already limited benefit.</p> <p>Each new advance results in a further weekly deduction. Often these add up to $50 a week or more. MSD policy says repayments should not add up to more than $40 a week, but that is often ignored.</p> <p>This happens because the law stipulates that each individual debt should be repaid in no more than two years, unless there are exceptional circumstances. Paying this debt off in two years often requires total deductions to be much higher than $40.</p> <p>The third issue is that one-off payments can be refused regardless of the need. That is because there are two provisions pulling in opposite directions.</p> <p>On the one hand the law says a payment should be made if not making it would cause serious hardship. But on the other hand, the law also says payments should not be made if the person already has too much debt.</p> <p>People receiving benefits and their case managers face the choice between more debt and higher repayments, or failing to meet an essential need.</p> <h2>Ways to start easing the burden</h2> <p>So what is the fix? A great deal could be achieved by just changing the policies and practices followed by Work and Income.</p> <p>Case managers have the discretion to make non-recoverable grants for non-food essential needs. These could and should be used when someone has an essential need, particularly when they already have significant debt.</p> <p>Weekly deductions for debts could also be automatically made very low.</p> <p>When it comes to changing the law, the best solution would be to make weekly benefit rates adequate to live on.</p> <p>The government could also make these benefit debts similar to student loans, with no repayments required until the person is off the benefit and their income is above a certain threshold.</p> <p>However we do it, surely it must be time to do something to fix this poverty trap.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/212528/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/hanna-wilberg-1466649"><em>Hanna Wilberg</em></a><em>, Associate professor - Law, <a href="https://theconversation.com/institutions/university-of-auckland-1305">University of Auckland</a></em></p> <p><em>Image credits: Getty Images </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/forcing-people-to-repay-welfare-loans-traps-them-in-a-poverty-cycle-where-is-the-policy-debate-about-that-212528">original article</a>.</em></p>

Money & Banking

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Don’t let financial shame be your ruin: open conversations can help ease the burden of personal debt

<p>Nearly <a href="https://www.ipsos.com/en-nz/19th-ipsos-new-zealand-issues-monitor">two-thirds of New Zealanders</a> are worried about the cost of living, and a quarter are worried about <a href="https://www.canstar.co.nz/wp-content/uploads/2023/03/Consumer-Pulse-Report-NZ-2023-Final-4.pdf">putting food on the table</a>. But the <a href="https://visionwest.org.nz/food-hardship-part-one/">shame</a> that can come with financial stress is preventing some people from seeking help. </p> <p>According to a recent survey, a third of New Zealanders were not completely truthful with their family or partners about the state of their finances, and 12% <a href="https://www.stuff.co.nz/business/money/129477493/financial-infidelity-research-finds-kiwis-hiding-debts-from-their-partners">actively hid their debt</a>. This shame and worry about money can spill over into <a href="https://www.nzherald.co.nz/bay-of-plenty-times/news/concerns-buy-now-pay-later-schemes-could-fuel-addiction-as-kiwis-spend-17b-last-year/VOV3VIDIG2MZBGJEGPMLGWDMJI/">addiction</a>, <a href="https://www.newsroom.co.nz/i-had-serious-concussion-bad-credit-and-15000-debt-abuse-survivor">violence</a> and <a href="https://corporate.dukehealth.org/news/financial-strains-significantly-raise-risk-suicide-attempts">suicide</a>. </p> <p>Considering the effect of financial stress on our wellbeing, it is clear we need to overcome the financial stigma that prevents us from getting help. We also <a href="https://www.apa.org/topics/money/family-financial-strain">owe it to our kids</a> to break the taboo around money by communicating our worries and educating them on how to manage finances better. </p> <h2>The burden of growing debt</h2> <p><a href="https://www.stuff.co.nz/business/money/300817697/mortgage-pain-homeowners-facing-repayment-hikes-of-up-to-900-a-fortnight">Ballooning mortgage repayments</a> are compounding the financial distress of many New Zealanders. At the beginning of 2023, an estimated 11.9% of home owners were behind on loan payments, with more than <a href="https://www.rnz.co.nz/news/business/485045/data-shows-430-000-new-zealanders-behind-in-credit-repayments-in-january">18,400 mortgagees in arrears</a>. </p> <div data-id="17"> </div> <p>Given the <a href="https://www.treasury.govt.nz/publications/an/an-21-01-html">majority of household wealth</a> in New Zealand is in property, our financial vulnerability is closely linked to the ebbs and flows of the <a href="https://content.knightfrank.com/research/84/documents/en/global-house-price-index-q2-2021-8422.pdf">second most overinflated property market</a> in the world. </p> <p>There are also cultural reasons for growing financial distress. Many households have taken on significant debt to “<a href="https://www.stuff.co.nz/business/7616361/Keeping-up-with-the-Joneses">keep up with the Joneses</a>” and to pursue the quintessential <a href="https://www.interest.co.nz/property/99890/westpac-commissioned-survey-suggests-many-new-zealanders-still-pine-quarter-acre">quarter-acre dream</a>. Social comparison and peer pressure act as powerful levers contributing to problem debt and over-indebtedness. </p> <p>The average household debt in New Zealand is more than <a href="https://tradingeconomics.com/new-zealand/households-debt-to-income">170% of gross household income</a>. That is higher than the United Kingdom (133%), Australia (113%) or Ireland (96%).</p> <h2>The rise of problem debt</h2> <p>And we are digging a deeper hole. Over the past year, <a href="https://www.rnz.co.nz/news/business/485045/data-shows-430-000-new-zealanders-behind-in-credit-repayments-in-january">demand for credit cards increased by 21.7%</a>. The use of personal debt such as personal loans and deferred payment schemes <a href="https://www.nzherald.co.nz/business/demand-for-personal-credit-rises-arrears-also-up-as-cost-of-living-bites/YCEM74CII5FQBPJXO3UOG4Y3GY/">is also climbing</a>. There is a real risk this debt could become problem debt. </p> <p>Problem debt can have severe and wide-reaching consequences, including <a href="https://theconversation.com/over-300-000-new-zealanders-owe-more-than-they-own-is-this-a-problem-173497">housing insecurity</a>, <a href="http://www.socialinclusion.ie/publications/documents/2011_03_07_FinancialExclusionPublication.pdf">financial exclusion</a> (the inability to access debt at affordable interest rates), <a href="https://www.tandfonline.com/doi/full/10.1080/07409710.2012.652016?journalCode=gfof20">poor food choices</a> and a plethora of <a href="https://bmcpublichealth.biomedcentral.com/articles/10.1186/1471-2458-14-489">health problems</a>. </p> <p>Yet, the hidden <a href="https://spssi.onlinelibrary.wiley.com/doi/10.1111/sipr.12074">psychological</a> and <a href="https://link.springer.com/article/10.1007/s11205-008-9286-8">social cost of financial distress</a>remains often unspoken, overlooked and underestimated.</p> <p>Even before the pandemic, <a href="https://www.scoop.co.nz/stories/BU1909/S00616/research-shows-financial-stress-impacts-mental-wellbeing.htm">69% of New Zealanders were worried</a>about money. The share of people worrying about their financial situation was higher for women (74%), and particularly women aged 18-34 (82%). It is no coincidence that the latter are particularly at risk of problem debt through so-called <a href="https://acfr.aut.ac.nz/__data/assets/pdf_file/0008/691577/Gilbert-and-Scott-Study-2-Draft-v10Sept2022.pdf">“buy now, pay later” schemes</a>. </p> <p>The stigma of financial distress extends beyond the vulnerable and the marginalised in our society. A growing number of <a href="https://www.rnz.co.nz/news/political/467417/middle-income-families-hoping-for-help-in-budget-as-rising-costs-sting">middle-class New Zealanders </a> are quietly suffering financial distress, isolated by financial stigma and the taboos around discussing money. When pressed, one in two New Zealanders would rather <a href="https://www.scoop.co.nz/stories/BU2203/S00384/research-shows-wed-rather-talk-about-politics-than-our-finances.htm">talk politics over money</a>. </p> <h2>Time to talk about money</h2> <p>Navigating financial distress and <a href="https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?article=2526&context=sulr">stigma</a> can feel overwhelming. Where money is a taboo subject, it may feel safer to withdraw, maintain false appearances, be secretive or shun social support. </p> <p>This tendency to avoid open discussions and suffer in silence can lead to <a href="https://loneliness.org.nz/lonely/at-home/financially-struggling/">feelings of isolation</a> and contribute to <a href="https://theconversation.com/how-financial-stress-can-affect-your-mental-health-and-5-things-that-can-help-201557">poor mental health</a>, such as depression, anxiety and emotional distress. </p> <p>Sadly, the trauma of living in financial distress can also <a href="http://irep.ntu.ac.uk/id/eprint/39442/1/1307565_Wakefield.pdf">break up families</a>. Losing the symbols of hard-gained success and facing the prospect of a reduced lifestyle can be tough. It often triggers feelings of personal failure and self doubt that deter us from taking proactive steps to talk openly and seek help. </p> <p>But what can families do to alleviate some of this distress?</p> <h2>Seek help</h2> <p>First, understand that <a href="https://www.ft.com/content/86767aac-98e0-4dae-8c5a-d3301b030703">you are not alone</a>. Over 300,000 New Zealanders <a href="https://theconversation.com/over-300-000-new-zealanders-owe-more-than-they-own-is-this-a-problem-173497">owe more than they earn</a>.</p> <p>Second, seek help. There are many services that help people work through their financial situation and formulate a plan. In the case of excessive debts, debt consolidation or <a href="https://goodshepherd.org.nz/debtsolve/">debt solution loans</a> may help reduce the overall burden and simplify your financial situation. </p> <p>For those struggling with increasing interest on their mortgages, reaching out to your bank early is critical. During the 2008 recession, banks in New Zealand <a href="https://www.beehive.govt.nz/release/banks-exchange-letters-crown-support-distressed-mortgage-borrowers">worked with customers</a> to avoid defaulting on mortgages, including reducing servicing costs, capitalising interest and moving households to interest-only loans. It is essential to understand that the <a href="https://www.stuff.co.nz/life-style/homed/real-estate/130677426/are-we-on-the-brink-of-a-wave-of-mortgagee-sales">banks do not want mortgagees to fail</a>, and that options exist.</p> <p>To help future generations avoid debt traps, we need open communication about money – also known as “<a href="https://link.springer.com/article/10.1007/s10834-020-09736-2">financial socialisation</a>”. This includes developing values, sharing knowledge and promoting behaviours that help build <a href="https://files.eric.ed.gov/fulltext/EJ1241099.pdf">financial viability and contribute to financial wellbeing</a>. </p> <p>The lessons about handling money from family and friends are crucial for <a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2020.02162/full">improving our children’s financial capability</a>, helping them be <a href="https://www.fsc.org.nz/it-starts-with-action-theme/growing-financially-resilient-kids">more financially resilient</a> and better able to survive the stresses we are experiencing now – and those <a href="https://www.stuff.co.nz/business/money/300836616/heres-how-much-household-costs-are-expected-to-increase">yet to come</a>.</p> <p><em>Image credits: Getty Images</em></p> <p><em>This article originally appeared on <a href="https://theconversation.com/dont-let-financial-shame-be-your-ruin-open-conversations-can-help-ease-the-burden-of-personal-debt-202496" target="_blank" rel="noopener">The Conversation</a>. </em></p>

Retirement Income

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What to do when your friend owes you a few

<p dir="ltr">We all want to do our bit to help our friends and family, and we’ve all heard that all too familiar “I’ll pay you back later”. But what do you do when later never seems to come around? </p> <p dir="ltr">According to a new report by finder, 1 in 4 Australians are waiting on a friend to pay them back. The numbers account for roughly 24% of the population, or 4.8 million people. Though the problem is by no means limited to the nation. </p> <p dir="ltr">The most common unpaid debts (all at 6%)  fall under the categories of gifts, bill splitting at a restaurant, and event tickets. Sharing ride services (Uber, taxis, etc.), travel expenses, and gambling activities are close behind - making up 5, 4, and 3% of the reasons for lax repayments respectively. </p> <p dir="ltr">"Our research reveals that millions of Aussies have borrowed money from their friends with no intention of paying them back,” Finder’s money expert Sarah Megginson said of their findings.</p> <p dir="ltr">"Not repaying money breaks trust and can put strain on the relationship, but it could also cause financial problems for the friend left shouldering the debt."</p> <p dir="ltr">There is, however, hope for those still clutching their receipts and waiting, with Megginson sharing some top tips to help people get back what they loaned out. </p> <p dir="ltr">"Your first port of call should be to ask your friend to repay the debt,” she said. “It can be a bit uncomfortable bringing up the topic of money but if you don't ask and then you're resentful, that can be more damaging to the friendship long-term.”</p> <p dir="ltr">She then explained how you may have to avoid paying for them in the future, and that re-setting boundaries with some of the people in your life would be of benefit to both parties, as well as having an honest conversation with them about it all. </p> <p dir="ltr">However, if the situation is more serious than a taxi ride or a friendly brunch, further action may be necessary, especially if a large amount of money is involved. </p> <p dir="ltr">"You can send a letter of demand, clearly outlining how much you are owed and asking that it be repaid within a certain time frame,” she suggested of the worst-case scenario, “otherwise legal action will be started.</p> <p dir="ltr">"If you receive no response you can lodge a claim with your state or territory's tribunal for resolving matters like this.”</p> <p dir="ltr">Megginson added that above else it is important to “exercise discretion” when loaning money, even to family and friends. Emergency funds, in particular, should not be touched by anyone but yourself, as every dollar counts in the midst of a cost of living crisis. </p> <p dir="ltr"><em>Images: Getty </em></p>

Money & Banking

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"I had better make sure I don’t have a heart attack!": Allison Langdon stuns pensioners on the verge of bankruptcy

<p>Left with a $25,000 legal bill after taking their retirement village to court over a broken air conditioning unit and losing the case, pensioners Walter and Carola Sadlo were on the verge of bankruptcy.</p> <p>In a heartwarming segment, Allison Langdon told the Sadlo’s that A Current Affair viewers had banded together to bail them out of their financial debt.</p> <p>Walter and Carola’s legal battle began in 2018 when their air conditioning unit broke. The couple had paid an extra $1,375 for air conditioning but maintenance wasn’t covered by the retirement village. Walter said he believed it would be covered, so he tried to fight it in the New South Wales Civil and Administrative Tribunal (NCAT).</p> <p>After taking the retirement village to court and losing the case, the couple were issued with a bankruptcy notice just two days before Christmas. “I could not believe that somebody could be so vicious and cruel,” Walter said.</p> <p>The couple had also sacrificed their savings to fight the case; $15,000 that Carola inherited from her mother. With this gone, they feared losing their home.</p> <p>Langdon then stunned the couple by telling them, “our viewers have paid your debt.”</p> <p>"I normally don't get emotional. I had better make sure I don't have a heart attack!" Walter said. </p> <p>Not only was their $25,000 legal bill covered, but viewers chipped in almost enough to cover the $15,000 they had to put toward their bill. </p> <p>"Hopefully, there will be village operators who see this story and will show a bit more heart," Walter said.</p> <p><em>Image: A Current Affair</em></p>

Money & Banking

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"Sheer terror": Pensioner slapped with five-figure government fine

<p>Pensioner Rosemary Gay opened up about the “sheer terror” she faced upon receiving a letter from the government demanding she pay back the $65,000 Robodebt bill they claimed she had been overpaid. </p> <p>Rosemary’s nightmare began on September 19, 2016, when the letter arrived, an event that Rosemary confesses “turned my life upside down and created an enormous emotional and mental strain on me."</p> <p>The letter detailed that she was required to pay the total of $64,999.17 in overpaid welfare benefits. Centrelink claimed this was because her declared amounts did not reflect what she actually earned during the period of July 9, 2010, to 6 October, 2016.</p> <p>“It turned my life upside down,” Rosemary told the Robodebt Royal Commission on Monday, “I’ve never earned that much money, how could I owe that much money? And the fact I was to come up with it within a matter of three or four weeks, it was sheer terror.”</p> <p>The emotional 76-year-old admitted that she feared she would have to sell her home to cover the debt, and detailed the bleak path she saw before her, “all I could see was that I may be faced with selling my home and losing everything that I had worked for in my 70 years, and I just saw it all going away instantly.”</p> <p>After contacting Centrelink, Rosemary confirmed that what she had reported was the same as what was on the paperwork. She admitted to assuming that would “be the end of it.”</p> <p>Officials at Centrelink eventually told Rosemary that it came down to a “glitch”, and after a review, the total of her debt was reduced to $6,600. </p> <p>Of her Robodebt experience, Rosemary said, “it was a very dark period of time for me and one that is very difficult to re-live. My mental health and physical health, at that stage, were at a very low ebb.”</p> <p>A second review brought a new letter to Rosemary in December 2016, this time stating that her debt had been reduced to $120. </p> <p>Finally in 2020, Rosemary was informed by Centrelink that she would be refunded the $120, with the Coalition government winding up the unlawful scheme - ruled as such by the Federal Court in 2019. It is suspected that more than 381,000 people were affected, and that over $750m was wrongfully recovered from the victims. </p> <p>“I was shocked and angry by this time to think they could initially cause such a traumatic experience to anybody accessing support from a pension,” Rosemary told the Royal Commission, “it will continue to remain with me forever. It’s just something I will never get over and it has had a huge impact on my physical and mental wellbeing … </p> <p>“That they could turn someone’s life upside down and still get it so wrong over and over again.”</p> <p><em>Image: Getty Images</em></p>

Money & Banking

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Qantas staff to be given $5,000 bonus

<p dir="ltr">Qantas has announced a nice $5,000 bonus to 19,000 of its employees as the carrier continues to recover after Covid. </p> <p dir="ltr">The Australian carrier’s net debt had risen to an eye-watering $6.4 billion due to next to no flights during the two years of closed borders. </p> <p dir="ltr">The net debt now sits well below pre-covid levels at $4 billion as more customers are opting to travel with Qantas. </p> <p dir="ltr">Qantas is now set to give 19,000 of its employees a one-off recovery boost of $5,000.</p> <p dir="ltr">In addition to the bonus, Qantas group will look at increasing permanent wages by two per cent, which were also frozen during lockdown and closed borders. </p> <p dir="ltr">It is expected that the entire ordeal will cost Qantas a whopping $87 million in the 2022 Financial Year. </p> <p dir="ltr">Qantas CEO Alan Joyce said recovery of the carrier began in December when the company decided to bring its workers back before borders opened. </p> <p dir="ltr">“It’s been a tough few years for everyone in aviation but we promised to share the benefits of the recovery once it arrived,” he said. </p> <p dir="ltr">“For our people, the recovery really started last December when we made the decision to bring everyone back to work ahead of schedule and well before all borders opened.</p> <p dir="ltr">“In February, we announced a bonus scheme that gives employees at least 1000 shares in the national carrier if key conditions are met, which are on track.</p> <p dir="ltr">“We’re announcing a one-off payment that goes some of the way to acknowledging the sacrifices our people have made, including long periods of no work and no annual wage increases. It also recognises the great work they are doing as we restart the airline, which has been challenging for everyone.</p> <p dir="ltr">“This comes at a time when travel demand is rebounding but our people are facing a unique set of cost of living pressures, which frankly they’d be in a better position to handle if aviation hadn’t been so badly hit over the past two years. That’s now changing.</p> <p dir="ltr">“We can’t afford to permanently increase salaries beyond the two per cent threshold we’ve set, but we can afford to make this one-off payment on top of the Qantas share rights we’ve already given.</p> <p dir="ltr">“Getting our permanent cost base right is how we’re able to reinvest, which ultimately means more opportunity for our people.</p> <p dir="ltr">“The structure of our business means many of our people see their salary increase significantly as their careers progress. That progression often relies on the business growing, so the recent investments we’ve announced in new aircraft and new ventures will see employees share in the benefit as the national carrier enters a new phase.” </p> <p dir="ltr"><em>Image: Qantas</em></p>

Money & Banking

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Cancer patients go untreated due to hospital debts

<p dir="ltr">A cancer centre in Palestine is turning away patients for the first time in its history, with some 500 patients turned away since September last year for one reason - it’s owed $96 million ($NZ 105 million).</p> <p dir="ltr">The cancer unit in the Augusta Victoria Hospital in eastern Jerusalem is owed the funds from the Palestinian Authority (PA) and is unable to buy the chemotherapy drugs needed to treat patients, according to the <em><a href="https://www.bbc.com/news/world-middle-east-60829319" target="_blank" rel="noopener">BBC</a></em>.</p> <p dir="ltr">“It’s the first time in our history that we’ve been forced to take the decision not to accept new patients,” Dr Fadi al-Atrash, the hospital’s deputy CEO, told the <em>BBC</em>.</p> <p dir="ltr">“We’re facing a very critical situation where we might be forced to close some departments in future. We might have to stop the treatment of patients already in our care.</p> <p dir="ltr">“It means that more people might die of cancer because they’re not receiving their treatment on time, or according to the right schedule.”</p> <p dir="ltr">A lack of funds for healthcare isn’t the only problem for the PA, which says it’s facing the worst financial crisis since it began 30 years ago, due to a combination of the pandemic, inflation and the Palestinian conflict with Israel.</p> <p dir="ltr">Salem al-Nawati, a 16-year-old with leukaemia from Gaza, collapsed outside the PA Health Ministry in Ramallah earlier in the year and was declared dead soon after.</p> <p dir="ltr">His uncle, Jamal al-Nawati, was fighting to secure a hospital bed for Salem, and detailed the barriers his nephew faced in accessing treatment.</p> <p dir="ltr">Since hospitals in Gaza are ill-equipped to treat many serious cases of cancer, Salem was given a medical referral and PA financial guarantee for treatment in a private hospital in Nablus.</p> <p dir="ltr">However, after being initially refused a travel permit by Israel, Salem arrived for treatment a month later and was turned away from the Nablus hospital because its bills hadn’t been paid by the PA.</p> <p dir="ltr">“I was wondering what we’d done wrong, what had this poor patient ever done?” Mr al-Nawati said.</p> <p dir="ltr">“Salem’s condition was deteriorating hour-by-hour, day-by-day. He was so sad, asking me why he was being refused treatment, and I was doing my best to reassure him.”</p> <p dir="ltr">Though an influential family friend intervened, resulting in the PA offering to send Salem to an Israeli hospital, his permit didn’t allow him to travel there.</p> <p><span id="docs-internal-guid-b31a38f8-7fff-8814-5572-e68c5e23bcab"></span></p> <p dir="ltr"><em>Image: Getty Images</em></p>

Caring

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Want to become debt-free this year?

<p><strong>Simple tips that help you live debt free</strong></p><p>Getting into debt can be incredibly stressful. Constantly worrying about paying your debt while still having enough money to stay afloat can make you feel lost like you’re running in a never-ending maze. There are ways to stay out of debt, though. You can avoid these 15 money mistakes that are costing you thousands, learn 5 steps to avoid the credit card trap and even learn what rich people never ever buy to help you save a couple of bucks. You can also pick up these smart habits to help you live debt-free.</p><p><strong>Set goals</strong></p><p>Having a plan means having a purpose. “[People] that lead healthy financial lives more often than not have clear financial goals and are actively working towards them,” says Yoni Dayan, chief editor of Money Under 30; he adds that “if you have a good ‘why’ to save, the ‘how’ will come much more naturally.”</p><p><strong>Wait to buy </strong></p><p>“If you have trouble with impulse spending, waiting a few days is a great habit,” Joe Udo of blog Retire By 40 explains. “You may find a lower price or simply realise that you don’t need it after all.” While this is particularly helpful when it comes to big-ticket items, like a new TV or even a new car, it can also apply to everyday buys that can add up over time.</p><p><strong>Turn off auto-pay</strong></p><p>Financial planner, Shannah Compton Game, recommends removing all auto-pay or auto-fill options on sites where you shop frequently. This forces you to “think about how much money you’re spending before you hit the ‘buy now’ button,” she says</p><p><strong>Pay as you go </strong></p><p>Surprise parties are great. Surprise bills are not. To avoid owing at the end of the month, Erica Gellerman, creator of The Worth Project, suggests treating your credit card like a debit card. “For example, if I swipe on lunch for $10 and gas for $40 I’ll use the credit card app on my phone that night to transfer $50 from my checking account,” she explains. “That way I’m not spending money that I don’t have.”</p><p><strong>Pre-pay your credit card</strong></p><p>This tip from Compton Game is pure genius: “Pre-pay your credit card for however much you’ve budgeted for the week for your expenses,” she advises. It will help keep your bank balance in check and stop you from spending money you don’t have.</p><p><strong>Don't carry a balance</strong></p><p>There’s a two-word reason: interest payments. Udo says that when he uses credit cards, “I always make sure to pay the bill in full every month. I get all the convenience without having to pay interest to the bank.” If you can’t pay it all, a good rule of thumb is to never carry more than 30 per cent of your credit limit to the next month. Bonus: paying off your balance every month is a good way to boost your credit rating.</p><p><strong>Use cash</strong></p><p>Another thing to consider if you find yourself holding a hefty credit card bill when the 31st rolls around, is to start paying with cash. Udo explains that not only does this make sure you’re living within your means but “the physical action of handing over cash to someone else is a lot more difficult than swiping a card.”</p><p><strong>Automate your savings</strong></p><p>Remembering to set aside money each month is tough. Fortunately, financial planner, Sophia Bera, has a sneaky solution. “Automate your savings and retirement contributions so you don’t have to think about it yet you’re consistently making progress on your goals.”</p><p><strong>Find inexpensive alternatives</strong></p><p>More free time often involves spending more money, from brunch to happy hour to window shopping (which turns into actual shopping). “Nothing is wrong with these activities, but when I was doing them out of habit, I realised that so much of my spending was on things that I didn’t really care that much about,” Gellerman says. Now she keeps a list of budget-friendly activities to swap out for her pricier pastimes, like inviting friends over or going on a walk.</p><p><strong>Have a good attitude </strong></p><p>As new age-y as it may sound, the law of attraction applies to money, too. The better your attitude is towards your finances, the better your finances will be. “Come at money from a place of enjoyment and abundance instead of fear or scarcity,” Taylor Simpson, founder of The Money Mindset Masterclass says. “Know and believe money comes to you easily – when you feel this, you’ll live it.” One way to do that? Say “thank you” when you spend money to start seeing it as something that comes and goes effortlessly.</p><p><strong>Create an emergency fund</strong></p><p>According to a recent survey by Mozo, only 25 per cent of Australians have the savings to stay afloat when faced with unforeseen circumstances. To prevent going into debt, however, you should have enough set aside that you could cover a minimum of three to six months worth of living expenses in case something drastic should happen.</p><p><strong>Don't boost your budget</strong></p><p>No matter what. That means even if you get a raise, start a side gig or even win the lottery – stay firm to your original budget. Better yet, funnel all that extra income directly into your savings or retirement fund, so you won’t even feel like you’re missing anything.</p><p><strong>Skip the take-away coffees</strong></p><p>Yes, you’ve heard it before but it bears repeating: Time, in partnership with NextAdvisor, broke down exactly how much you’d save if you swapped your twice-daily coffee habit with home-brewed coffee – and it’s a lot. Assuming you spend $3.95 on your cappuccino, twice a day, you could be losing over $2,800.00 per year – compared to spending just $100 per year with home-brewed coffee. Something to keep in mind is that number could be more or less, depending on your order. If you have a more expensive coffee habit, prepare to spend more per year.</p><p><strong>Track your progress</strong></p><p>If you have a financial goal in mind, say to save up an emergency fund by the end of the year, track your progress to see how you’re doing. Seeing that number increase each time you look can give you the motivation to keep your smart spending habits on track. Or, if you don’t see it increase as much as you’d like, you can adjust your spending habits to get back on track. Either way, tracking how much you save will help you figure out if your saving habits are efficient or not.</p><p><strong>Compare prices</strong></p><p>It’s tempting to grab something we want or need as soon as we see it, but smart spenders know to compare prices and see where to get the best deal. They utilise fliers, apps, and websites to compare prices. For instance, MotorMouth, which makes it easy to compare the price of fuel at one servo with the others, highlighting the cheaper and more expensive service stations right across the region.  Comparing prices can cut your spending and allow you to put extra money aside.</p><p>This article originally appeared on <a href="https://www.readersdigest.com.au/food-home-garden/money/15-everyday-habits-of-debt-free-people">Reader's Digest</a>. </p>

Retirement Income

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Prince Andrew settles debt on Swiss chalet ahead of potential sale

<p dir="ltr">Prince Andrew has settled the outstanding debt on his seven-bedroom Swiss ski chalet, potentially enabling him to sell it in order to finance his court costs.</p> <p dir="ltr">The previous owner of the £17 million home in Verbier had taken the Prince to court after he allegedly failed to pay the final installment. However, Isabelle de Rouvre recently told the<span> </span><em>MailOnline,<span> </span></em>“The war is over. He has paid the money.”</p> <p dir="ltr">That could mean that last week’s trip to the chalet by ex-wife Sarah Ferguson and daughters Beatrice and Eugenie could be the last time the family visits.</p> <p dir="ltr">Multiple reports have said the Duke of York wants to sell the property in order to raise money for his legal battle with Virginia Giuffre, who is suing Andrew for allegedly sexually assaulting her when she was a teenager, and who is seeking unspecified damages, which could amount to millions of dollars. The Queen has reportedly refused to fund any court bill or potential settlement, forcing Andrew to find the money himself.</p> <p dir="ltr">It’s thought that Andrew paid between £17 million and £18 million for the chalet in 2014, agreeing to pay in installments. £13 million came from a mortgage and the rest was to be paid in cash, but de Rouvre, a French socialite, accused them of not paying the final £5 million in 2019, and took the issue to court, seeking payment as well as £1.6 million in interest. The total amount sought by Ms de Rouvre worked out to roughly $12,477,522AUD.</p> <p dir="ltr">Ms de Rouvre told the<span> </span><em>MailOnline,<span> </span></em>“I sold it two months ago, or was it one. Maybe six weeks ago.</p> <p dir="ltr">“Anyway, I sold it to the Yorks and we made an agreement. That is the end of the story thankfully. The war is finished. It is the end of the matter. I have nothing to do with it now. That’s all.</p> <p dir="ltr">“I don’t know what they are doing now. They were here at Christmas but I only know that because I read it in the press. I did not see them. So Happy Christmas and that’s that. The end.”</p> <p dir="ltr">The sale of the chalet would leave Andrew owning no property in either the UK or abroad.</p> <p dir="ltr">The duke is awaiting a ruling from Judge Lewis Kaplan on whether he will face a full civil court case over the allegations, which he has consistently denied. His legal team has argued Ms Giuffre waived her right to sue when she signed a $500,000 settlement agreement with Jeffrey Epstein in 2009.</p> <p dir="ltr"><em>Image: Steve Parsons - WPA Pool/Getty Images</em></p>

Real Estate

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Afterpay enters Aussie pubs, experts warn of “debt spiral”

<p><span style="font-weight: 400;">Afterpay – the popular buy now, pay later (BNPL) service – has made the jump from retail stores to over 160 Aussie pubs.</span></p> <p><span style="font-weight: 400;">But consumer advocates are worried that the move could send some people into a “debt spiral”.</span></p> <p><span style="font-weight: 400;">Australian Venue Co (AVC) has become the first hospitality group to partner with Afterpay as part of its ‘Dine Now, Pay Later’ offering – which rolls out across its venues from November 15.</span></p> <p><span style="font-weight: 400;">AVC CEO Paul Waterson said the decision was driven by customer demand, who he said have shifted away from credit cards, as well as a desire to offer convenient experiences for guests, </span></p> <p><span style="font-weight: 400;">“We’re not afraid to go first. As a group, we seek out other industry leaders who we can work with to innovate on behalf of our customers,” he said.</span></p> <p><span style="font-weight: 400;">“We are looking forward to our guests being able to choose an alternative, innovative way to pay for dining out at our pubs.”</span></p> <p><span style="font-weight: 400;">However Katherine Temple, the policy and campaigns director at the Consumer Action Law Centre, said the centre has seen more people struggling with BNPL debts, making the move from AVC all the more concerning.</span></p> <p><span style="font-weight: 400;">“Often buy now, pay later is part of a larger debt so people are also struggling with existing credit card debts or personal loans or utility loans, so it’s rarely the only type of debt when they come to us,” she told </span><em><a rel="noopener" href="https://www.news.com.au/finance/money/costs/afterpay-moves-into-hospitality-with-australian-venue-co/news-story/b569dcf94efcde0e5eef2ba79852c24f" target="_blank"><span style="font-weight: 400;">news.com.au</span></a></em><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">“The debt varies but it can be [from] a couple of thousand dollars up to tens or hundreds of thousands of dollars of debt and we are hearing from people of all ages and walks of life that are using these products now.”</span></p> <p><span style="font-weight: 400;">James Hunt, a policy advisor at Financial Counselling Australia, told </span><a rel="noopener" href="https://www.goodfood.com.au/eat-out/news/twobeer-pub-trip-or-sixweek-hangover-afterpay-comes-to-the-pub-20211104-h1zlwk" target="_blank"><span style="font-weight: 400;">Good Food</span></a> <span style="font-weight: 400;">that Afterpay and other BNPL companies aren’t required to check if customers can afford the repayments, “so unfortunately many people are ending up with unmanageable debt”.</span></p> <p><span style="font-weight: 400;">Ms Temple shares those concerns, citing a lack of safeguards “to ensure people can afford to make repayments”, which she says exacerbates “financial hardship and money problems”.</span></p> <p><span style="font-weight: 400;">“Buy now, pay later is everywhere now and is normalising debt particularly for younger people,” she said.</span></p> <p><span style="font-weight: 400;">A spokesperson for Afterpay said the company enters new consumer markets based on demand.</span></p> <p><span style="font-weight: 400;">“As credit cards steeply decline, Australians are looking for smarter ways to manage their budget, using their own money, and avoiding interest and debt traps,” they said.</span></p> <p><span style="font-weight: 400;">They also said the Afterpay’s product has built-in spending rules to ensure customers don’t pay interest or revolve in debt.</span></p> <p><span style="font-weight: 400;">“Customers are unable to continue using Afterpay if they are late on a single instalment,” they added.</span></p> <p><span style="font-weight: 400;">However, customers do pay some fees if they miss a payment, with Afterpay collecting a whopping $70 million in late fees in 2020.</span></p> <p><span style="font-weight: 400;">The Australian Securities and Investments Commission (ASIC) also criticised Afterpay, Zip, and other BNPL providers for charging excessive fees.</span></p> <p><span style="font-weight: 400;">In a report released last year, the regulator found that one in five BNPL users are missing payments.</span></p> <p><span style="font-weight: 400;">It also found that 15 percent of users had taken out additional loans to pay for the services.</span></p> <p><span style="font-weight: 400;">As for Afterpay’s place in pubs, chief spokesperson for CANSTAR Steve Mickenbacker said it could be especially challenging to navigate.</span></p> <p><span style="font-weight: 400;">“You visit a pub, perhaps budgeting to buy two drinks … BNPL puts you in a position to turn those two drinks into eight,” he said.</span></p> <p><span style="font-weight: 400;">“Without self-discipline, that two-beer pub trip could become a six-week hangover.”</span></p> <p><em><span style="font-weight: 400;">Images: Getty Images</span></em></p>

Money & Banking

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Squid Game is influenced by the horror of survival comics and real-life debt

<p><em>Note: The following article contains spoilers about “Squid Game.”</em></p> <p>Is the Netflix Korean sensation <em>Squid Game</em> <a href="https://www.nme.com/reviews/tv-reviews/squid-game-review-netflix-k-drama-3056718">an allegory for late capitalism</a>? The response to the show is similar to <a href="https://www.britannica.com/art/morality-play-dramatic-genre">medieval morality plays that attempted to hammer home the eternal damnability of the Seven Deadly Sins</a>.</p> <p>I’m a university literature professor who specializes in film and video media. This means that I’m usually on the hunt for “constitutive contradictions” — <a href="https://doi.org/10.7208/9780226670973-010">those hypocrisies that may defy the rule of law and common sense, but are required in allegedly just, democratic, ultra-advanced capitalist societies</a>.</p> <p>And so, I’m undecided between a red button and a green button of the types that figure in <em>Squid Game</em> Episode 2’s mockery of an election. If allegory is a story or performance conveying deeper or hidden meaning that its audience must work to interpret, the show would qualify based on audience reaction alone. But maybe it isn’t at all allegorical, in that <em>Squid Game</em> makes what little covert evil and hypocrisy may remain in our world so graphically, unmistakably overt.</p> <h2>Alternatives to capitalism</h2> <p>This series socks us with what cultural theorist Mark Fisher called “<a href="https://libcom.org/files/Capitalist%20Realism_%20Is%20There%20No%20Alternat%20-%20Mark%20Fisher.pdf">capitalist realism</a>” — the impossibility of imagining an outside to the political-economic system in which most of us live, let alone an alternative to it.</p> <p>But when asked if he deliberately set out to expose the dehumanizing and even lethal effects of late capitalism, <em>Squid Game</em> creator Hwang Dong-hyuk laughed off the suggestion that his blockbuster series delivers any “profound” point or message.</p> <p>“The show is motivated by a simple idea,” he told the <em>Guardian</em>. “<a href="https://www.theguardian.com/tv-and-radio/2021/oct/26/squid-games-creator-rich-netflix-bonus-hwang-dong-hyuk">We are fighting for our lives in very unequal circumstances</a>.”</p> <p>Hwang referred to his own experience of the <a href="https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html">2009 global economic downturn</a> as an inspiration for the series, which saw financing for his film projects dry up and compelled him, his mother and grandmother to take out loans.</p> <p>Drawn to the hardcore survivalist games depicted in Japanese and South Korean comic books, Hwang pondered just how bad things could get and how far he might go to keep himself and his family alive. He didn’t need to look far to find cautionary tales.</p> <p><iframe width="440" height="260" src="https://www.youtube.com/embed/N0p1t-dC7Ko?wmode=transparent&amp;start=0" frameborder="0" allowfullscreen=""></iframe> <br /><span class="caption">‘Squid Game’ creator Hwang Dong-hyuk named Japanese manga and cult movie ‘Battle Royale’ as one of his influences.</span></p> <h2>Real-life events</h2> <p>The back story of <em>Squid Game</em>‘s protagonist, Seong Gi-hun, is a fictionalized retelling of the violent 2009 <a href="https://www.thenation.com/article/culture/squid-game-review/">clash between car manufacturer Ssangyong and 1,000 of the over 2,600 employees</a> Ssangyong laid off. Striking workers stood down a brutal alliance of private security forces and Korean police for 77 days. Thirty strikers and a few of their spouses lost their lives — many to suicide — during the strike and its aftermath in the Korean courts.</p> <p>Continued under- and unemployment, loss of property and accumulated debt (<a href="https://www.bloomberg.com/graphics/2021-coronavirus-global-debt/">compounded by the COVID-19 pandemic</a>), has meant that in 2021, personal debt in South Korea climbed to <a href="https://www.theguardian.com/world/2021/oct/08/squid-game-lays-bare-south-koreas-real-life-personal-debt-crisis">105 per cent of GDP</a>. Canada’s average household debt <a href="https://tradingeconomics.com/canada/households-debt-to-gdp">skyrocketed to 112 per cent of GDP in the first quarter of 2021, before dropping to 109 per cent in the second quarter</a>.</p> <p>“We are all living in a Squid Game world,” Hwang told the <em>Guardian</em>, without pretension or exaggeration.</p> <h2>Financial demands</h2> <p>Actor Lee Jung-jae as Seong Gi-hun is riveting as our everyman. Like millions of workers displaced and discarded worldwide, <em>Squid Game</em>’s protagonist Gi-hun tries to stay afloat in the service and gig economies, with a fried chicken restaurant that quickly fails, and then as a driver.</p> <p>He takes out loans from banks and loan sharks that tenuously prop up his gambling addiction. Gi-hun’s ex-wife has remarried, to a gainfully employed man, and is planning to move with him to the United States, along with Gi-hun’s daughter. The new husband can afford to celebrate his stepdaughter’s birthday with dinner at a steakhouse (uttered in English, so all know it’s a big deal), while Gi-hun can only pay for a hot dog and fish cake fast-food snack, and a tragicomic inappropriate gift clawed out from an arcade game.</p> <p><iframe width="440" height="260" src="https://www.youtube.com/embed/t6YuqFh5htw?wmode=transparent&amp;start=0" frameborder="0" allowfullscreen=""></iframe> <br /><span class="caption">Despite his financial situation, Gi-hun tries to redeem himself on his daughter’s birthday.</span></p> <p>An inveterate gamer and perennial optimist with an endearingly expressive face, Gi-hun lives on the cusp of the Big Payoff — whether off-track betting, withdrawing money from his mother’s bank account or accepting an invitation to play a <a href="https://www.radiotimes.com/tv/drama/squid-game-paper-flip-ddakji-how-to-play/">game of ddakji</a> in a Seoul subway station.</p> <p>But like all games of chance in the nine-episode series, it’s clear that this one — where players toss paper tokens in an attempt to flip over their opponent’s tokens — is rigged from before the start. It’s also clear that all 456 competitors (Gi-hun is No. 456) are in a <a href="https://www.merriam-webster.com/dictionary/battle%20royal">battle royal</a> for their lives and a giant cash jackpot, which lends the show its highest-stakes, highest-concept brand of suspense.</p> <h2>Contradictions</h2> <p>What may be less clear — and potentially the stuff of constitutive contradictions and ironies galore — is why record numbers of viewers have flocked to <em>Squid Game</em>. The series is <a href="https://www.thenation.com/article/culture/squid-game-review/">the most watched Netflix series ever</a>, beating out previous ratings champion <em>Bridgerton</em>. Bloomberg News estimates <em>Squid Game</em>’s worth to Netflix to be <a href="https://www.marketwatch.com/story/squid-game-is-worth-nearly-900-million-to-netflix-report-11634511855?mod=article_inline">close to US$900 million</a>.</p> <p>The whole series, however, only <a href="https://www.marketwatch.com/story/squid-game-is-worth-nearly-900-million-to-netflix-report-11634511855">cost about $21 million to make</a>, while creator Hwang lost six teeth from all the stress and has received no performance-based bonuses. He also doesn’t want to be forever known as “the Squid Game guy.”</p> <p><a href="https://images.theconversation.com/files/429792/original/file-20211102-39236-6iqujn.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/429792/original/file-20211102-39236-6iqujn.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="An aerial view of Seoul, showing highrises and shanty towns" /></a> <span class="caption">Personal debt in South Korea climbed to 105 per cent of GDP in 2021.</span> <span class="attribution"><span class="source">(Shutterstock)</span></span></p> <p>An unidentified Korean part-time food delivery driver told the <em>Guardian</em>: “You have to pay to watch [the show] and I don’t know anyone who will let me use their Netflix account.… In any case, why would I want to watch a bunch of people with huge debts? <a href="https://www.theguardian.com/world/2021/oct/08/squid-game-lays-bare-south-koreas-real-life-personal-debt-crisis">I can just look in the mirror</a>.”</p> <p>Why indeed would anyone in financial straits like any of the players in the series want to watch <em>Squid Game</em>? I’ve searched the internet, without success, for a ballpark number of the 142 million households that tuned in globally who may have signed up for a Netflix free-trial period to do so.</p> <p>Hwang is currently in discussions with his streaming empire paymasters <a href="https://www.hollywoodreporter.com/tv/tv-news/squid-game-creator-season-2-meaning-1235030617/">over potential additional seasons as well as his other film projects</a>. Considering <a href="https://www.fool.com/investing/2021/08/05/netflix-subscriber-growth-accelerate-through-2025/">industry growth predictions</a>, what will some viewers pay or sacrifice to keep watching <em>Squid Game</em>?</p> <p>More to the point, why would they? I think an answer to the late-capitalist allegory question hinges on what audiences see reflected back to themselves on screen. One viewer might recognize their own challenging situation in a character’s story, while another sees suffering of an unimaginable kind.</p> <p>These divergent vectors of identification may determine whether there is or isn’t any profound or hidden meaning to <em>Squid Game</em>. They may also influence new, gruesome games of chance, manipulation and life-or-death next season. We’ll have to stay tuned to find out.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/170514/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><span><a href="https://theconversation.com/profiles/elaine-chang-1283642">Elaine Chang</a>, Associate Professor, English and Theatre Studies, <em><a href="https://theconversation.com/institutions/university-of-guelph-1071">University of Guelph</a></em></span></p> <p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/squid-game-is-influenced-by-the-horror-of-survival-comics-and-real-life-debt-170514">original article</a>.</p> <p><em>Image: Shutterstock</em></p>

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Picasso’s daughter exchanges famous artworks for a tax bill settlement

<p><span style="font-weight: 400;">The French Government has negotiated a unique deal with Pablo Picasso’s daughter, </span><span style="font-weight: 400;">Maya Ruiz-Picasso, to settle an inheritance tax bill. </span></p> <p><span style="font-weight: 400;">France is set to receive six paintings, two sculptures and a sketchbook by the world-famous artist, as French finance minister Bruno Le Maire announced during a press conference at the PIcasso Museum. </span></p> <p><span style="font-weight: 400;">“It is an honour for our country to welcome these new artworks by Picasso. They will enrich and deepen our cultural heritage,” Le Maire wrote on Twitter.</span></p> <p><span style="font-weight: 400;">Le Maire presented one of the artworks at the press conference: the 1938 painting called </span><span style="font-weight: 400;">Child with a Lollipop Sitting Under a Chair</span><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">According to Picasso’s grandson Olivier Widmaier-Picasso, the painting depicts his mother Maya as a child. </span></p> <p><span style="font-weight: 400;">French citizens have been permitted to settle debts similar to Maya’s with a payment of profitable art, books, and collectibles of national importance since 1968. </span></p> <p><span style="font-weight: 400;">The collective total of the nine objects given by Picasso's daughter was not publicly disclosed. </span></p> <p><span style="font-weight: 400;">According to France’s culture minister Roselyne Bachelot, the artworks will enter the national collections at Paris’s Musée Picasso in 2022, and will be exhibited as a whole to the public in the spring of 2022.</span></p> <p><span style="font-weight: 400;">“It is with deep emotion that I come to celebrate the entry into the national collections of the works,” said Bachelot, who called the donation an “exceptional event.”</span></p> <p><em><span style="font-weight: 400;">Image credit: French Ministry of Culture</span></em></p>

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