Dear Prime Minister Christopher Luxon, Minister for Social Development, Employment & Child Poverty Reduction, Community and Voluntary Sector Louise Upston, Minister for Finance, Public Service, and Social Investment Nicola Willis, Minister of Commerce and Consumer Affairs Andrew Bayly, Chief Executive, Ministry of Social Development Debbie Power.

We are a collection of Financial Mentors and Building Financial Capability and Budgeting Services writing to request that Government Ministers and the Ministry of Social Development (MSD) urgently review the funding for our sector.

We provide essential support, hope and guidance to whānau experiencing financial hardship and distress. We are concerned that 44 essential well-established services have lost their funding and many others have had their funding reduced.

Financial Mentors anticipate that the under-funding of Building Financial Capability and Budgeting Services will drive their communities deeper into poverty and debt.

The 2023 FinCap Voices Report shows that Financial Mentors are effective and that the return on investment is not only high, but they achieve real and measurable positive financial outcomes for whānau.

But with the Covid funding being removed from the sector this leaves just $19 million across more than 200 Building Financial Capability and Budgeting Services and over 800 Financial Mentors.

There are over 800 trained Financial Mentors, but funding for only 180 FTEs has been allocated to the sector by MSD, and as a result of the latest procurement round, MSD will no longer fund 44 essential Building Financial Capability and Budgeting Services after 1 July.

These services are well-established in their communities and have long-standing trusted relationships with the people that they serve, but they may have to shut their doors or operate at reduced capacity from 1 July.

MSD told our sector that it would aim to inform providers six months in advance of 1 July, but it is still unclear which services have been funded.

Financial Mentors across the motu are gravely concerned that many desperate whānau will be left in the lurch. There is concern about the impact this will have on communities and concern that some communities will now be left without a Building Financial Capability or Budgeting Service at all.

We fear it will put additional pressure on an already strained essential services.

Building Financial Capability and Budgeting Services are already struggling to meet rapidly increasing demand due to the cost-of-living crisis. Data provided by FinCap shows Financial Mentors caseload increased by over 20,000 people between 2022 & 2023 which is a 40% increase. The year-on-year growth in demand has been met with a reduction in funding and likely a reduced number of Mentors working in the sector.

Financial Mentors are part of a wider eco-system and provide a service that intersects with multiple agencies. Social Workers, Mental Health care providers, social and transitional housing providers, micro-finance providers, KiwiSaver providers, credit providers, banks, Work & Income, Kāinga Ora, food banks and more rely on Building Financial Capability and Budgeting Services to support their clients and it is often a requirement to see a Financial Mentor before receiving assistance.

Having to wait for a Financial Mentor due to reduced capacity will add pressure to this system and it will directly impact the people that need support the most.

What does this all mean for the people we serve, more debt, stress and increased mental health issues and a rise in family violence?

Food, housing and other essentials have become increasingly unaffordable. Many whānau are not able to put food on the table or a roof over their heads. Financial hardship, stress and mental health issues are inextricably linked, and the link between family violence and economic stress is well documented. The fear is that without the vital support of a Financial Mentor these issues will be exacerbated.

The impact of this decision will not be reported on by our clients, they already feel shame asking for help, and are not likely to complain or report that no one is there to help them. But it will show in the statistics, more mental health issues and other negative outcomes.

The people of Aotearoa are struggling in the current cost-of-living crisis and have been let down by the decision to reduce the number of funded Building Financial Capability and Budgeting Services.

The following Financial Mentors and Building Financial Capability and Budgeting Services are urging Government Ministers and the Ministry of Social Development to immediately review the decisions that have been made that will result in 44 essential established services losing Government funding from 1 July.

We are also asking the Government to take action to increase the level of funding to our sector and ensure that our services are funded adequately now and into the future, so that we can support whānau in need.

Sincerely,

Mohanan Morganan - Papatoetoe Budgeting & Family Services, Maataa Waka - Ki Te Tau Ihu Trust, Sharon Grant - Financial Mentor & Service Manager - Budgeting Services North Canterbury, Natasha Nicholson-Samuel - Whanau Family Support Services Trust, Hinengakau - Maatua Whangai, Paul Williams - Board Chairperson -Tamaki Budgeting, David Cameron - Budget Manager – CAB – Wellington, Christine Liggins - CEO and Co-founder – Debtfix, Sheree Sadler- Manager- Timaru Budget Advisory Trust, Andrew Henderson - Executive Officer - Dunedin Budget Advisory Service Inc, Tony Agar – Manager - Hamilton Budgeting Advisory Trust, Whanganui Budget Advisory Service Inc, Nicky Patterson - Te Kauwhata Community House, Claudette Wilson - General Manager - North Harbour Budgeting Services Inc, Jocelyn Merwood – Manager - New Plymouth Budget Advisory Service, David Baines - Kingdom Resources Ltd, Teresa White - General Manager – Auckland Central Budgeting, Te Aroha Family Budgeting Services Inc, Heather Lange - Family Finances Service Trust – Upper Hutt, Clayton Rangitutia - Mana Whakahaere - Te Puna Hauora o Te Raki Paewhenua, Kootuitui budgeting service Papakura, Sharon Grant - Financial Mentor & Service Manager - Budgeting Services North Canterbury, Bronwyn O’Sullivan - Morrinsville Ezekiel Budgeting Service, Papakura Budgeting Service Inc, Taupo Budget Advisory Service Inc, Kim White - Overdale Family Financial Services - Overdale Community Centre Charitable Trust, Barb Timms - Manager Te Whare Putea Trust – Kaikoura, Lyn Kirton - Financial Mentor - Te Whare Putea Trust – Kaikoura, Anne Lee - Financial Mentor - The Umma Trust, Ngaruawahia Community House, Jessica Morrison – Eastern Coromandel Community Services Trust, Lee-Anne Michelle & Amy Senada - Clutha Budget Advisory Service, Nicky Patterson - Te Kauwhata Community House, Gabby Byrne - General Manager - Cambridge Community House Trust, Dianne Harris - Financial Mentor Co-ordinator - Whangarei Anglican Care Centre/Te Whare Oranga, Maria Marsh - Manager - Te Puna Waiora / Desert Spring Ministries Trust, Ann Williamson- Executive Manager - Manchester House Social Services, Piki Te ora Hiroa - Pou Whakahaere - Nga Iwi O Mokai Patea Services, Eve Lafferty – Social Services Manager - Christchurch Methodist Mission, Rachel Robinson – Building Financial Capability Kahukura, Sisi Fale – Geneal Manager – Strive Community Trust, Indran Mylvaganam – Manager / Financial Mentor – Financial Freedom Trust, John Marsden – Te Puna Hauora, Tokaroa Budget Advisory Services, John Girling – Foxton Districts Budget Service, Kapiti Family Budgeting Service, Tania Huata-Kupa - Connector/Coordinator/Financial Mentor – Ngāti Pāhauwera Development Trust, Marianne Wright - Waimarino Budget Service Inc, Poutini Waiora, Financial Mentoring Service (Budget Advisory Service Whakatane Inc), Maria Koch - Office Manager - Mohua Social Services, Treena Raupita - Coromandel Budget Services, Lyn Fletcher - Financial Mentor - kaipara Budgeting Service, Sarah Beisly Paeroa Financial Mentor – Paeroa Community Support Trust, Anne Adde Compassion Trust - Financial Mentoring Service, Sandra Muirhead - Financial Mentor, Christine Benner - Financial Mentor - Northern Community Family Services, Tracy Stowers - General Manager - Vaiola Pacific Island Budgeting Service, Family & Financial Solutions Trust - Marie Woolnough Treasurer and Kim Tawa Secretary (Governance), Anita Westley - Service Manager and Financial Mentor, Olivia Manu - Financial Mentor, Katie Watt - Financial Mentor.

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