ANOTHER FINE MESS
FINES HAVE BECOME A BARRIER TO CREDIT
THE GOVERNMENT’S ‘‘super priority’’ scheme to get people to pay off overdue court fines appears to be working because some who owe money are finding it increasingly difficult to borrow.
Until February 2012, people with unpaid fines could borrow money from lenders without impediment.
Since then, any new loans made to buy assets put lenders in an unenviable position because the Government can seize such assets, sell them and use the proceeds to clear the borrower’s unpaid fines.
That, according to Ministry of Justice figures, resulted in lenders checking the debts of over 370,000 prospective borrowers to find they owed a collective $14.9 million in unpaid fines, reparations, offender levies and court costs.
The would-be borrowers then cleared $6.9m of those fines, the figures show, though there is no data on how they were paid, and whether they were paid fully or in part through loans.
The scheme is just one of a number of moves the Government has made to collect a massive build-up of unpaid fines that had, the Government felt, brought the whole system of fines into disrepute.
In addition to creating the super-priority system, the law also allows data-matching. If a speeding fine is levied on someone for whom the courts have no address, the address can be updated if the offender has given it to Work and Income or the IRD, for example.
That data-matching resulted in $63.75m being collected in the 2011/12 financial year.
Other measures the Government has devised to get old fines paid include limiting creditors’ access to benefits and allowing the courts to resentence non-payers to prison or home detention.
The collection arm of the Ministry of Justice, which has an annual budget of just under $66m, also has the ability to seize property, make compulsory deductions from a person’s income or bank account and stop people from travelling.
The overall clamp-down has contributed to a significant drop in unpaid fines, reparations and offender levies, from $806m at the end of June 2009, to $568.5m at the end of May; however, the rate at which unpaid fines are being collected has slowed, indicating the low-hanging fruit has been harvested.
In the financial year ending June 2009, $240.4m of fines were collected. That rose the following year to $254.8m, dipping to $251.5m the following year. In the 2011/12 financial year, it fell again to $222.6m, and looks likely to come in at roughly that amount again this year.