In the shadow of the welfare state : the role of payday lending in poverty survival in Australia

A defining characteristic of contemporary welfare governance in many western countries has been a reduced role for governments in direct provision of welfare, including housing, education, health and income support. One of the unintended consequences of devolutionary trends in social welfare is the development of a ‘shadow welfare state’ (Fairbanks, 2009; Gottschalk, 2000), which is a term used to describe the complex partnerships between statebased social protection, voluntarism and marketised forms of welfare. Coupled with this development, conditional workfare schemes in countries such as the United States, Canada, the UK and Australia are pushing more people into informal and semi-formal means of poverty survival (Karger, 2005). These transformations are actively reshaping welfare subjectivities and the role of the state in urban governance. Like other countries such as the US, Canada and the UK, the fringe lending sector in Australia has experienced considerable growth over the last decade. Large numbers of people on low incomes in Australia are turning to non-mainstream financial services, such as payday lenders, for the provision of credit to make ends meet. In this paper, we argue that the use of fringe lenders by people on low incomes reveals important theoretical and practical insights into the relationship between the mixed economy of welfare and the mixed economy of credit in poverty survival.

Phase two of the National Credit Reforms : examining the regulation of payday lenders

This study seeks to analyse the adequacy of the current regulation of the payday lending industry in Australia, and consider whether there is a need for additional regulation to protect consumers of these services. The report examines the different regulatory approaches adopted in comparable OECD countries, and reviews alternative models for payday regulation, in particular, the role played by responsible lending. The study also examines the consumer protection mechanisms now in existence in Australia in the National Consumer Credit Protection Act 2009 (Cth) (NCCP) and the National Credit Code (NCC) contained in Schedule 1 of that Act and in the Australian Securities and Investments Commission Act 2001 (Cth).

Regulating the cost of small loans : overdue or overkill?

Small-amount short-term lending began in 1994 in response to the initial exemption of such loans from consumer credit regulation. Growing demand for such loans now produces industry turnover of approximately $800 million each year. Regulators recognised early the need for consumer protection due to the vulnerability of borrowers and the emergence of various predatory practices. This led to reforms designed to regulate these loans, prevent particular misconduct and provide remedies against injustice. Some were enacted as part of the National Consumer Credit Protection Act 2009 (Cth), which also imposed licensing and responsible lending requirements on lenders and increased consumer access to remedies. The Government has now introduced the Consumer Credit and Corporations Amendment (Enhancements) Bill 2011 which limits the price that can be charged for credit and restricts access to small loans. This article examines the extensive reforms which have taken place in this sector, and compares these regulatory approaches with the “bright line approach” of the Enhancements Bill. The article argues that the repercussions of this step will require careful monitoring to ensure that further harm is not suffered by those least able to bear it, and that the government will also need to facilitate other, more sustainable, solutions to the problem that small loans are currently used to solve. After we wrote this article, the Report of the Parliamentary Joint Committee on Corporations and Financial Services and the Report of the Senate Economics Legislation Committee on the Enhancements Bill were released. These are referred to in a postscript.

A sustainable model for supporting entrepreneurship in developing countries

Principal Topic Small and micro-enterprises are believed to play a significant part in economic growth and poverty allevition in developing countries. However, there are a range of issues that arise when looking at the support required for local enterprise development, the role of micro finance and sustainability. This paper explores the issues associated with the establishment and resourcing of micro-enterprise develoment and proposes a model of sustainable support of enterprise development in very poor developing economies, particularly in Africa. The purpose of this paper is to identify and address the range of issues raised by the literature and empirical research in Africa, regarding micro-finance and small business support, and to develop a model for sustainable support for enterprise development within a particular cultural and economic context. Micro-finance has become big business with a range of models - from those that operate on a strictly business basis to those that come from a philanthropic base. The models used grow from a range of philosophical and cultural perspectives. Entrepreneurship training is provided around the world. Success is often measured by the number involved and the repayment rates - which are very high, largely because of the lending models used. This paper will explore the range of options available and propose a model that can be implemented and evaluated in rapidly changing developing economies. Methodology/Key Propositions The research draws on entrepreneurial and micro-finance literature and empirical research undertaken in Mozambique, which lies along the Indian ocean sea border of Southern Africa. As a result of war and natural disasters over a prolonged period, there is little industry, primary industries are primitive and there is virtually no infrastructure. Mozambique is ranked as one of the poorest countries in the world. The conditions in Mozambique, though not identical, reflect conditions in many other parts of Africa. A numebr of key elements in the development of enterprises in poor countries are explored including: Impact of micro-finance Sustainable models of micro-finance Education and training Capacity building Support mechanisms Impact on poverty, families and the local economy Survival entrepreneurship versus growth entrepreneurship Transitions to the formal sector. Results and Implications The result of this study is the development of a model for providing intellectual and financial resources to micro-entrepreneurs in poor developing countries in a sustainable way. The model provides a base for ongoing research into the process of entrepreneurial growth in African developing economies. The research raises a numeber of issues regarding sustainability including the nature of the donor/recipient relationship, access to affordable resources, the impact of individual entrepreneurial activity on the local economny and the need for ongoing research to understand the whole process and its impact, intended and unintended.

Resilient creative economies? Creative industries on the urban fringe

The relationship between culture and the economy is of growing interest to researchers, writers and policy makers. Advanced economies have become increasingly ‘culturalised’, pushing culture from the periphery to the centre of policy concerns and action. The economic downturn commencing in late 2008 generated predictions that ranged from the apocalyptic to the sanguine, across all sectors. This article offers an insight into the relationship between the economy, the creative industries and their geographic localities. It investigates creative industries situated away from the urban core, and located in the outer suburbs of Melbourne and Brisbane. We suggest that for creative industries situated in outer suburbs, there are characteristics that may contribute to their economic resilience.

Educating for the creative economy in emerging countries

In 1972, the United Nations (UN) Conference on the Human Environment expressed a growing realization that economic and social progress needed to be balanced with a concern for the environment and the stewardship of natural resources. The hard-to-grasp concept of "sustainable development" was first defined as "development that meets the needs of the present without compromising the ability of future generations to meet their needs" (World Commission on Environment and Development [WESDJ, 1987, p. 43). This definition contains two concepts: first, "human needs," with priority given to the world's poor, and, second, the environment's limits for meeting the state of technological and social organization (WESD, 1987, p. 43). At the 2002 World Summit on Sustainable Development (UN, 2002a), the focus on environmental protection broadened to encompass social justice and the fight against poverty as key principles of development that is sustainable. Three interdependent and mutually reinforcing "pillars" were recognized: economic development, social development, and environmental protection. These pillars must be established at local, national, and global levels. The complexity and interrelationship of critical issues such as poverty, wasteful consumption, urban decay, population growth, gender inequality, health, conflict, and the violation of human rights are addressed in all three pillars (Pigozzi, 2003, p. 3). Following the concept of sustainable development, we argue that the challenge for developing countries in contemporary society is to meet the very real need for economic development and opportunities for income generation, while avoiding the unintended and unwanted consequences of economic development and globalization. These consequences include social exclusion, loss of cultural heritage, and environmental and ecological problems.

In a perfect world it would be great if they didn't exist : how Australians experience payday loans

In the last few decades payday loans have mushroomed in many developed countries. The arguments for and against an industry which provides small, short-term loans at very high interest rates have also blossomed. This article presents findings from an Australian study to contribute to the international policy and practice debate about a sector which orients to those on a low income. At the heart of this debate lies a conundrum: Borrowing from payday lenders exacerbates poverty, yet many low-income households rely on these loans. We argue that the key problem is the restricted framework within which the debate currently oscillates.

Teacher Education for High Poverty Schools

This volume captures the innovative, theory-based, and grounded work being done by established scholars who are interrogating how teacher education can prepare teachers to work in challenging and diverse high-poverty settings. It offers articles from the US, Australia, Canada, the UK and Chile by some of the most significant scholars in the field. Internationally, research suggests that effective teachers for high poverty schools require deep theoretical understanding as well as the capacity to function across three well-substantiated areas: deep content knowledge, well-tuned pedagogical skills, and demonstrated attributes that prove their understanding and commitment to social justice. Schools in low socioeconomic communities need quality teachers most, however, they are often staffed by the least experienced and least prepared teachers. The chapters in this volume examine how pre-service teachers are taught to understand the social contexts of education. Drawing on the individual expertise of the authors, the topics covered include unpacking poverty for pre-service teachers, issues related to urban schooling as well as remote and regional area schooling.

Re-thinking teacher quality in high-poverty schools in Australia

As is the case globally, Australian schools that serve high-poverty communities most often employ the least experienced, least prepared teachers. Beginning with a discussion of poverty in Australia this chapter draws on 6 years of learnings from Australia's National Exceptional Teachers for Disadvantaged Schools (NETDS) program to examine how social justice can be taught within a mainstream Initial Teacher Education program in an increasingly neoliberal climate where teacher education curriculum around social justice struggles to find a place within the current discourses of quality teaching and its preoccupations with standards, accountability, and high-stakes testing.

Critical success factors for positioning Australian business talent in the global knowledge economy : a current research agenda

"Globalisation‟ and the "global knowledge economy‟ have become some of the most common "buzzwords‟ in Australian business, economic, and social sectors in the past decade. Further, knowledge service exports are a growing sector for Australia that utilise complex technical and creative capacities, increasingly rely on virtual work innovations, require new socio-technical systems to establish and maintain effective client relationships in global contexts; and – along with other innovations in the electronic age – may require novel coping abilities on the part of both managers and their employees to achieve desired outcomes (Bandura, 2002). Accordingly, this paper overviews such trends. The paper also includes a research agenda which is a "work-in-progress‟ with a major global company, Shell (Australia); it highlights both the objectives and proposed methodology of the study; it also outlines anticipated key benefits arising from the research.