13 Feb 2012

New fines legislation criticised

11:26 am on 13 February 2012

Some of New Zealand's top lawyers are criticising new legislation taking effect on Monday making it more difficult for people with unpaid fines to buy items on credit or get loans which they can't afford.

The Courts and Criminal Matters Bill will allow outstanding fines to be included on individual credit reports and also strengthen the court's Warrant to Seize Property powers.

The Government says the law will encourage people to pay the money quickly in fear that their tarnished credit history will stop them from borrowing in the future.

More than $637 million of fines are lodged in the Ministry of Justice's database at present.

Lawyer Lorraine Smith says while it is a good move for lenders, it is likely those with fines already have chequered credit histories.

Barrister Ron Mansfield says tarnishing a person's credit history will only make the person rely on government assistance more, when they can not find jobs, a house, or afford power and food.

"In my view it may be counter-productive. Landlords and future employers do credit checks so if people don't have a job or don't have a home and want to better themselves financially so they can pay outstanding fines, they may be prevented from getting a home for their family or a job - and hence will be worse off."

But Courts Minister Chester Borrows dismissed the criticism on Monday, telling Radio New Zealand's Morning Report programme the Government has a responsibility to recover fines.

Mr Borrows says it is better for prospective employers and lenders to be aware of a person's debts.