Social Security (Child Benefit) Amendment Bill

I move, That the Social Security (Child Benefit) Amendment Bill be now read a first time. At the appropriate time I would have liked to move that the Social Services Committee consider this bill. However, I understand that Dr Cullen and his Labour Government have decided to place a fiscal veto on it, which means that this bill’s first reading will also be its last. I know that other political parties in the House tonight, and a large number of church and community organisations and trade unions, will be as disappointed as I am that Labour will not even consider allowing this bill to go to the select committee for consideration.

The intention of my bill is simply to restore the family benefit, which we lost as recently as 1991. That is hardly a radical demand, and one that many, many people support as one step towards improving the situation in which our country finds itself at present. Despite economic growth and comparatively low unemployment, nearly a third of our children still live in poverty. Everyone here has now been well and truly alerted to the situation of families, like the one quoted in the Sunday Star-Times last weekend, who still struggle to survive on what appear to be reasonably high incomes.

Even if Labour had decided to vote against this bill in the long run, it could at least have had the decency to allow it to be referred to a select committee for consideration, in the context of the reforms that I believe that Dr Cullen and Steve Maharey are planning to make in the Budget. Surely the idea of restoring the equivalent of the former family benefit at the very low level of $15 a week for the first child and $10 a week for subsequent children is not so out of hand, and the public submission and select committee consideration process could have been permitted to occur.

In putting forward the introduction of a universal child benefit as a member’s bill, the Green Party is restating one of its major policy demands—that Aotearoa New Zealand should start putting children first. For far too long we have had an economy and a culture that act in a way that, both in theory and in practice, mean that children do not count. We would very much like to turn that round, and I am sure that many other MPs in this House feel the same way. But it is what we do about it that matters, not the sentimental verbiage that tends to be churned out on anything to do with children and families.

The Green Party sees the universal child benefit as one small step that this country could take towards eliminating child poverty. Of its own it will not do it, of course, and we do not want to negate other measures, like reforming family assistance and family support, improving abatement regimes, and/or increasing subsidies for childcare. However, apart from anything else, we believe it is high time that children were accorded the same economic respect that we accord our older generation. If we can provide a universal benefit in the form of national superannuation to everyone aged 65 and over at hundreds of dollars per week, I fail completely to understand why we cannot afford to provide a universal benefit to all children under 18 at a level of $15 and $10 a week. We have costed the universal child benefit proposal in this bill at roughly $650 million a year, but when this is put up against the overall cost of national superannuation, against the Cullen superannuation fund, and within the context of current Budget surpluses, this pales into insignificance. We believe that this would be a very small price to pay to get serious about how we treat children and parents.

Some people say, as this Government may, that in a modern society like ours it is archaic to think that we can afford such a measure of social equity. However, I point out that even in the UK a universal family benefit has been retained to this very day, at the much higher rate of around $47 a week for the first child, even after all the years of Thatcherism and a right-wing Labour Government. Why does New Zealand continue to lag so far behind in the way we view the coming generation, who, after all, will be the ones who work to pay the taxes that will help pay the superannuation for people like many of us in the House tonight when we reach 65?

All children deserve the best possible start in life. Even the very low amounts I am proposing in this bill would make a huge difference in terms of what parents and low-income families can offer their children. For example, the primary caregiver of a two-child family would get an extra $25 a week in the hand, and the poorer the family the more proportionally they would be assisted. Twenty-five dollars is a lot of money to a family whose budget provides, for example, nothing for clothes, nothing for presents or school fees, and nowhere near enough for a good diet. We have to start somewhere in redressing the balance between the universality we offer the over-65s through national superannuation and the very inequitable and targeted assistance we offer to families with children.

We should also be getting beyond the ridiculous differentiation between families where the parent or parents are in work and those in which the parents are out of work. One of the biggest injustices implicit in our current welfare and tax regime is that both National and Labour seem to support giving more to working families, totally ignoring the gross innate inequity of making children suffer because of their parents’ unemployment, sickness, or long-term disability. Universal provision of benefits, like the one proposed here, is one simple way to get beyond the constant dilemmas and contradictions posed by the infinite gradations and degradation of targeting. Targeted systems create poverty traps where, for some, increases in parents’ incomes are less than the subsidies and benefits lost. In some families, even comparatively well-off ones, the small amount of money paid through a universal child benefit could well be the only discretionary income that primary caregivers have to spend on themselves and their children.

I am sure some people will remember, as I do, the way in which, in the good old days of the family benefit, for some mothers, even in quite high-income families, this was the only money they ever had control of to spend as they wished on their children. Some may also remember the way in which so many people in my generation and earlier were only able to afford to buy their first home because they could capitalise the family benefit for a deposit. Such a scheme would be a wonderful boon as we live through yet another ongoing housing crisis, where the lack of affordability and access to deposits prevents many families from even dreaming of owning their own home.

When this bill was drawn from the ballot last year I immediately wrote to many groups and people in the community asking for their support. The response was very positive, especially from groups whose focus lies with children, women, parents, and low-income families. I shall give the responses from a few of the many organisations that wrote back.

The National Council of Women sees this bill as an ideal and appropriate vehicle for replacing the child tax credit with the universal benefit for children, indexed to the consumer price index—going rather further than I have—and urges Labour to vote in favour of the bill. The New Zealand Council of Christian Social Services supports the bill being referred to the select committee so that there can be meaningful discussions about how to improve family support measures, and notes that had family support been indexed to inflation it would now be worth $74 a week for one child, instead of $47, and it says the complete inadequacy of the system must be addressed. The Public Health Association says it is crucial that this bill makes it through the select committee process as part of the development of real discussion and action on a comprehensive strategy to end child poverty. These are just a few examples of the comments that have come in, and I am aware that many more similar ones have been sent to Labour members and Ministers.

I am looking forward with interest to see how the Government votes tonight. I continue to hope that Labour members will see their way clear, along with at least one or two other parties in this House, to supporting this bill through to the select committee. I am also looking forward with interest to what this month’s Budget will bring to children and families. I know that Dr Cullen and the Hon Steve Maharey are promising handsome handouts to families. I hope they are right. I also hope that what they are bringing in will help alleviate the poverty and deprivation across all families, not just those lucky, educated, skilled, and/or healthy enough to be in paid employment.

Reference has been made to a financial veto. By Standing Order 314, such a veto can be exercised only at the third reading of a bill. Therefore a veto is not relevant at this stage to the progress or otherwise of this bill.

I want to begin my short contribution by complimenting the previous speaker, Sue Bradford from the Greens. One of the things I have enjoyed doing over the last few years is working with someone who has the dedication that Sue Bradford has to these issues. She not only talks about them, but she has lived them. She comes into this House with a track record that tells us she knows what she is talking about, because she has been there and worked with people in those situations. So any comments I make this evening I certainly want to preface with those remarks, which show I understand the sincerity of what Sue Bradford is bringing before us in the Social Security (Child Benefit) Amendment Bill.

But to cut to the chase in terms of where the Government will stand on this bill, I say that we will vote against it. Let me explain why we will do that. We will do it for a number of reasons. The first is that Ms Bradford is right. Later on this month we will introduce another Budget from the Labour Government. That Budget has been signalled as one in which we will be dealing with many of the issues that Ms Bradford is raising in her bill, in the sense that we want to do some things that will be very helpful for families, children, beneficiaries, and working families, within that middle ground of income within New Zealand. We have chosen to target our resources to those families in this Budget. It will not be heaps in the sense that the member described it, but it will certainly be a decisive step forward for families that are in that middle group.

But what we have had to do is make some decisions about priorities in this Budget, as we have in others, and as I will come back to. We have had to ask ourselves how we can get something that is meaningful into the hands of modest and low-income New Zealand households, so that they can see a sizeable difference in what is happening to their incomes. The member pointed out before—and I have not done the figures so I will just take Ms Bradford’s figures and work on those—that this policy was costed by the Greens at $650 million. That has actually been the sum for the Budget for a number of years, until now. So if we were to do that, we would work our way along the front bench of this Government, starting with Mr Hodgson and asking what he needed for energy and for science, research, and technology, moving to Mrs King and asking how to get the orthopaedic waiting lines down, moving on to Mr Goff and talking about the fact that he is trying to get our trade and foreign affairs going, and then getting to me and talking about tertiary students.

💬 Rod Donald: The eco tax, the super fund.

I know that Mr Donald would like to see a 48c in the dollar tax rate, which would have to go on to the middle-income New Zealanders we are trying to give money to right now—[Interruption] I am afraid it would.

So we are in the situation where I am sitting here, arguing about what I would do for students and how I would invest in tertiary education, and then we move to Jim Anderton, who would talk about what he would do for regional New Zealand, and on it would go. What I am saying is that it is about priorities.

I guess I would say to Ms Bradford that in other words we agree, but what I would like to do is use the money we do have available to us in a way that can make a real difference to the people we are aiming for. I am sure that those people the Greens are not too worried about right now are high-income New Zealanders, who may have a child. They are not too worried about them. The Greens may make the argument that it is good to have the benefit right across the whole community, because that binds us together as a collective into the policy, but I am sure the Greens do not go to bed each night worrying about people with $150,000 a year, and their children. They are talking about the same people we are. They are saying they would really like to see those middle-income and low-income New Zealanders get something that would make a difference to their lives.

So that is the other issue: not only are we going to try to do something in this Budget, but we are going to try to prioritise our spending, and that means that $650 million on one policy is not really a runner. We have to spend some time thinking about how we can maximise it, and that is the second point I want to make.

The third broad point is that often when we get into these debates there is a sense that nothing has happened. Well, a lot has happened over the last 4 years. I know that both the Green members in the House and the Labour and Progressive members share a view that there was a major social deficit in 1999. There had been major cuts to the income of beneficiaries during that 1990s period. For example, when Ruth Richardson delivered her Budget, up to 31 percent of the income of beneficiaries disappeared overnight. In fact the food bank industry was created by that. We know that in the area of health, to go to the market model simply did not work. We know that 13,000 houses were sold in the State sector area, and on and on it went. So we arrived at 1999, and we all shared the view that there was a major issue: poverty had become a reality for New Zealanders and things had to be done about it.

Well, we have not been sitting here waiting for this coming Budget. We have introduced things like income-related rents, which cost a lot of money. That means 56,000 households in New Zealand are now in stable houses with rents they can afford. We have introduced primary health organisations, which means that the cost of health care is dropping. We had already lowered the costs to families who take their kids to the doctor. Every single year that we have been in power we have introduced the lifting of the minimum wage for youth and adult workers. We have introduced the Employment Relations Act, and I heard today that even people on the other side of the House such as Peter Brown are saying that the Act is working extremely well—after it was once claimed that it would cause a lack of growth, and so on. It is working fine, and there is a more civilised arrangement growing between employers and employees as they try to share good wages. We have seen wages go up over this period of time.

Sue Bradford would know that one of the key policies of this Government has been to give the full entitlement to people who are on a benefit, so we are on our way to paying out $60 million in special benefits at the present time. We started at $7 million. That means many more households are getting their entitlement—an entitlement they should get. We are not a Government that just gives away money, but we said that if people were entitled to a part of the benefit system the previous Government would not let them access, we would give it to them. And we have been doing that. We know that right across the benefit system there have been changes that have put $5 here into a household, $40 there into a household. There have been income-related rents, lower costs for going to the doctors, more money going into State houses, money going into low decile schools to ensure that the quality of education is there for kids—and on and on it goes.

I say to the member that one of the most important things we have done on this side of the House is that we have measured what we have done. No other Government in this country has done that. We have run living standards research, and we have held ourselves accountable as to whether we have moved forward. We know we have—unlike previous Governments who have not spent the time on asking whether they have made a difference with their social policies. This Government has made it transparent. Anybody can go to the website of the Ministry of Social Development and Employment and ask how we are doing on poverty measures and on key issues like housing, and ask whether we are making a difference. Yes, we are. After 4 years, we are about to release the second of our social reports and it will be seen, once again, that we are healthier and better educated. We are dealing with poverty and with all the kinds of issues I know that that member wants to see dealt with. So I just want to say to the member, that is my third major point.

I would encourage her to know that we have not just been sitting around—as she pointed out herself—saying the rhetoric. People are very keen on just saying: “Here’s the next piece of rhetoric about children and families.” We have not done that. We have tried to work our way steadily through an agenda over the past 4 years, with limited resources. They are always limited resources, and we always have to prioritise, we know—but we have made a genuine difference.

I want to mention two things in the minute or so I have left. One is the change in the behaviour of the Department of Work and Income. The member will know that when we came into Government there were large caseloads. My own caseload in Palmerston North often ran to six or seven pages of people who were with the department; I now have a half page of people from that department. Those six or seven pages were all people who were in desperate circumstances and who could not access things from the department. We now have a group of people, case managers, who are proactively seeking to do their best for people in real need.

Most important, they have put people into work. I do not believe, as Donna Awatere Huata has often said, that any job will do, and neither does Sue Bradford. We want living wages for people—real jobs, living wages. Over the last little while we have seen more and more people getting into those jobs, because we have a good, strong economy. We have seen 176,000 people get jobs—more people than 5 years ago when Labour came into Government. We are at a 16-year low for unemployment. People are earning an income, and that is why in regions like mine, and like her own, we are beginning to see that real sense of optimism around our communities. Yes, there is a long way to go, but if any Government has made a difference, it is this one. It has steadily chipped away at those issues.

So in opposing this legislation, and in saying that Labour cannot support it, I want to reassure the member that we respect her stand on those issues, and assure her we are doing things about them. We are making a difference, and I look forward to being able to sit down and talk with her at Budget time. I am sure she will say: “Even more please.”, but I hope she will be at least satisfied we once again have made a major contribution.

The ASSISTANT SPEAKER (Hon Clem Simich): The remaining speakers have 5 minutes, with a bell at 5 minutes.

The National Party does not support this member’s bill—not because we have a disinterest in children or are disinterested in child welfare and protection, but because we do not think the bill really takes the country any further in trying to deal with some of the tough issues we face as a nation. This bill states that the child benefit is a must to: “… restore a benefit that is necessary for the protection and development of New Zealand children.”

We have seen no evidence that giving families another $15 a week will make that sort of difference, and protect some of the children we have seen in the headlines just in the last few months. Over the weekend we saw the McLachlan family in the news. That family earns $55,000 a year. Although this child benefit would return some money to them, in a sense we are looking at just another way of income churning. We are taking money off many New Zealand working families, only to give it back to them in another form.

We have a system at the moment that is incredibly complicated and complex. Very few New Zealand families understand the way it works. We have family support, a family tax credit, and childcare subsidies. Tonight we are debating whether to add a child benefit to that system. We are taking money from people, only to give it back to them. On this side of the House we believe that New Zealanders are better able to determine how they want to spend the money they earn. We think there are better initiatives, in terms of reducing taxes, to give people the opportunity to decide how they want to spend their money. We do not see that just continually whittling away the amounts that New Zealanders earn by taking it from them, spending it on administration and then handing it back, takes the country any further ahead. I understand some of the good stories about the family benefit in the 1960s and 1970s, but it is a different world today. I do not think that $15 a week would have made one skerrick of difference to the Saliel Aplins, the Coral-Ellen Burrowses, and the families that have unfortunately been brought to the nation’s attention.

The problem with this bill is that we cannot guarantee this money will be spent on children. We have seen no evidence—certainly no evidence presented in the explanatory note—that this will make a big difference to some children, in terms of their protection, development, and welfare. We are looking at a sum of about $780 a year. Why not give that back to families in taxes? Why not give that back to them so they can spend it on things that are important to them? At the moment we are a country that faces all sorts of problems. We have children lining up because they cannot get grommet operations. They sit in classrooms and cannot hear the teachers so, hello, it is no surprise that we are unable to get good outcomes from our education system. But in terms of the child benefit that we are debating tonight, all that is just small potatoes.

Some of the biggest issues this country faces come from the fact that we have 250,000 children living in welfare-dependent homes. One of the things we know is that in those welfare-dependent homes there is not a lot of extra money to spend on the things that many middle-class families aspire to give their children—the soccer boots, the school camps, the school fees, the music lessons, etc. Giving families $15 a week will not make a big difference. I think we should look at some of the more macroeconomic issues and also look at returning a greater amount of money through the tax system.

It is very interesting to hear the Minister, Steve Maharey, dish out some of the rhetoric that I believe Sue Bradford was referring to when she made her initial speech. Sure, he can talk about some of the benefit cuts that were made in the 1990s, but is it not interesting that Labour has not reversed any of those decisions? Labour understands the importance of the difference between welfare and work, and the motivations that any country has to provide for people, to ensure they move on to a better way of life.

This side of the House will support things that will make a genuine difference to children, and that is why we are working pretty hard to raise a lot of issues about the Department of Child, Youth, and Family Services, such as the fact that there are 6,000 children who have not even had their cases allocated to a social worker. That is where we think some of the focus should be—not on this sort of piecemeal initiative.

First of all, I respect the proponent of this bill, Sue Bradford. I know she has done a lot of work on this bill, that in proposing it she is heartfelt and sincere, and I acknowledge that. Also, on a very personal note, I was a child raised under a family benefit system, and when my children were very young, I received the family benefit as a parent. It was a good system, but it was not perfect. I remember that my husband earned $16 a year too much for us to be able to capitalise on the family benefit to buy our first home. It meant that we had to have a second mortgage of $2,500 at 14 percent, as opposed to my husband’s rehab loan at 3 percent. I am looking at one of my colleagues across the House, Bill Gudgeon, a former serviceman who understands what a rehab loan is. Our getting rid of that second mortgage at an awful interest rate of 14 percent was a priority, and we bemoaned the fact that we were not eligible to capitalise on the family benefit because my husband earned $16 a year too much.

The family benefit is an important part of our social history. In 1972, the year our eldest child was born, the benefit was increased to $3 per week as opposed to $1.50, and there were cries that there would be a population boom. If only we had had a population boom after 1972, it might have been quite good for this country, but the dire predictions that were made at that time did not come to pass. That is just a personal comment on the history of the family benefit as we know it.

As my colleague Steve Maharey commented also, the forthcoming Budget, which, of course, members on this side of the House are very much looking forward to being made public, means that in effect Sue Bradford’s bill will be superseded by what the Budget will be able to introduce for working families in New Zealand, and young families in particular.

It is part of our political history to place a priority on addressing child poverty. That is not something that can be addressed and corrected in a short span of time. In fact, I think today’s event, with the culmination of the hīkoi on the forecourt, is very much about people’s impatience to have income inadequacies addressed in a short period of time. That does not always occur overnight. But I know, and speak with confidence, that the forthcoming Budget will see many improvements to family income assistance.

I understand that when one is trying to address the serious shortcomings in income that have occurred over the last decade or so, that assistance cannot come quick enough for a number of people. But it is something that has to be addressed in a systematic, planned, and programmed way, so that assistance is targeted to where the most need is. We look forward to that being promulgated later on this month.

I conclude by saying that I know this bill has been put forward with sincerity, but I also look forward to the Budget, which will address many of the issues that the member promoting this bill also wishes to see addressed in as quick a time as possible.

First of all, I compliment Sue Bradford on the compassionate service she wishes to render to those less fortunate families. New Zealand First supports the Social Security (Child Benefit) Amendment Bill to the select committee. We support the vision that each child born requires nurturing, the best of parenting skills, and assistance to achieve an adequate standard of living.

The explanatory note indicates that children must be ordinary residents of New Zealand to qualify. Another provision specifies the way in which the benefit commences and terminates in respect of all children in New Zealand. The emphasis is on New Zealand citizenship. New Zealand First stands to ensure that taxpayers’ revenue will not be subject to abuse but will be accounted for to its rightful recipients as citizens of this nation. That means that children must ordinarily be resident in New Zealand to qualify.

According to the bill, each child will be entitled to a specified amount paid to a principal caregiver. As was related by the speaker from the National Party, there needs to be control in that area also. As recommended by our caucus, New Zealand First will discuss those and other issues in the select committee. A question that needs to be asked is how the chief executive will identify and be satisfied that each child is ordinarily a citizen of New Zealand. New Zealand First will query that method.

It is obvious that there is a need for assistance to some of our families, whether it is through education, health, or employment. If this bill will assist families to get on their feet, New Zealand First supports it to the select committee.

This member’s bill raises a raft of questions that probably need reclarifying for the public good. The questions are: what are the advantages and disadvantages of universally targeted benefits? From an equity perspective, we know that financial supplements that are available to everyone certainly cannot be accused of being discriminatory. We also know that low-income families would welcome a subsidy that did not disappear as soon as they started to get ahead financially. On the flipside, we have to ask what percentage of the hundreds of thousands, and possibly millions, per year that this bill would cost would be spent—and probably wasted—on well-heeled families.

A second and perhaps more important set of questions needs to be asked about family poverty in New Zealand—how we quantify poverty, how we sustainably lift incomes, how we best help families to move beyond financial dependency towards financial autonomy. United Future has serious misgivings about whether this proposal is the very best way to improve the overall outcomes for low and middle-income families. However, we will support the first reading of this bill, because it provides us with a chance to more fully debate the realities of poverty as they occur within the New Zealand context, and the chance to facilitate, at a select committee level, the discussion that so desperately needs to happen around this issue.

It is a discussion that United Future would welcome. For instance, United Future would like to see the debate reconfigured from its usual format, which is to focus on child poverty, and instead address the context that is facilitating the poverty, which is the family. While the plight of children may act as our motivation, it is by identifying and understanding the risks and strengths of the adult, or adults, charged with the responsibility of caring for those children that will best provide solutions for the child living in poverty.

The key seems to be to take the skills that low-income families use to survive and use them to develop strategies that will see them thrive. Just throwing a bit more money at a family is really, of itself, unable to lift it out of poverty. A whole range of factors contribute to a family’s lifestyle, but that does not mean that we should ignore low-income levels. It is clear that if a family’s income is too low, then that family will remain trapped and struggling to maintain even the basics.

United Future believes that we are well overdue as a nation for an in-depth debate on poverty in the New Zealand context. On nearly a daily basis, members of this House demonstrate combined concern about those who fall through the proverbial cracks in our society. We are united in our concern but divided in our solutions, and that is the nature of politics.

United Future has always been upfront about the fact that it prefers tax cuts and income splitting to benefits as the mechanism for delivering better financial outcomes for all New Zealanders, particularly families. For that reason, United Future is unlikely to support this bill beyond this point, but as the family-focused party, we welcome the opportunity it could provide us all. That opportunity is to listen to those who work at the coalface of social services to the families of this country, to put aside our unworkable ideologies, and to genuinely and pragmatically work towards some workable solutions for the New Zealand families who at present fall within international parameters of poverty. We will support this bill at the first reading.

Debate interrupted.

The House adjourned at 9.58 p.m.