Estimates Debate — Vote Social Development

It is very interesting to hear the comments made by the Minister for Social Development and Employment when he reflects on the past few years. We have just had the best economic conditions in a generation, and, certainly, in my lifetime, but very little of that—none of it, in fact—has anything to do with what the Government has done in the social development area. It is also interesting to see the absolute amnesia that some Labour Party members have about the reforms in the 1980s and the 1990s. Although they carry on and complain about the changes that were made to the benefit system, very few changes were made by this Government when it came into Government. It did not put the benefit levels back up again. It whinged on about it and talked about it, but it did not put the benefit levels up again, and it has not really undone any of the major reforms of the 1980s and the 1990s under the two successive Labour and National Governments.

Despite having had those excellent economic conditions, we now have more people dependent on welfare than ever. We have more people who are dependent on the State for their income than ever. When we look at the estimates and the Budget we see predictions that the numbers of people on all the major benefits will go up over the next few years. This is a time when we should see serious chunks taken out of the welfare system, yet we have seen a huge increase in the numbers on the invalids benefit and a 35 percent increase in the numbers on the sickness benefit.

I do not know where the Minister gets his figure of an 84 percent increase during National’s time, because if we look at the period 1993 to 1999 we see that the increase was about 14 percent, and that was an expected increase if we consider population growth and the expected rates of disability and illness. In the last 2 years before National left Government, the numbers on those benefits were going down. The number on the sickness benefit was in decline, yet if we compare that with the position during the first 2 years under Labour, we see that the number went up by 21 percent.

There was a reason for that. Most of the variables within the community remained constant, but we saw a huge change in Government policy that was ideologically driven. We now have over 330,000 New Zealanders of working age on a benefit, and in those households live 250,000 kids. That is a huge proportion of our community who are on welfare, and living a subsistence life in many cases; it is basically the population of Christchurch, Dunedin, and Invercargill put together. We should have bigger aspirations for our communities.

If we look at what was presented by this Government, we realise that we did not see any vision or a grand plan. We saw a lot of spending, which was supposed to bring in the votes, but I think New Zealanders saw through that. They looked at the Working for Families package, and they realised that the Government was embarking on a huge vote-buying exercise that was not designed to make a skerrick of difference to most New Zealanders’ lives. Why should they champion making more New Zealand families dependent on welfare?

On this side, we do not think that is something to crow about. We do not think it is a good thing to make more New Zealanders dependent on a State handout in order to live their daily lives. If we look at some of the respected members of our communities, such as teachers, policemen, nurses, and the Waihī family, for example, we find people who would be described as professionals saying they cannot get by in this country any more on basic salaries. We have to come to the realisation that this country is not a wealthy nation, and that we have to make some big changes if we are to become anything other than the retirement village of the South Pacific. We have to try to keep our best and our brightest on these shores, and not have them go off shore—[Interruption]—as I am sure many of the member for Otaki’s friends and university colleagues have done. We need to look at a better way of providing welfare, so that we can ensure that those who are in need get it but we do not create an ongoing trap.

We on this side have bigger aspirations. We do not believe that people who go on to welfare have to stay there. We believe that most people are capable of doing something, and that staring at a wall is not a great way to leave many New Zealanders. No wonder we see many New Zealanders go from the unemployment benefit to the sickness benefit! A lot of that increase comes from depression. Well, if there is anything to make anybody depressed it is being inactive and sitting at home, it is losing self-esteem, and it is having decreasing morale. That is why we are seeing some major changes.

I want to address the explosion in sickness benefit numbers and the failure of this Government to stem the surge. To begin with, I ask the Minister whether he has contacted Dr Andrew Causer and Dr Rod Hickey, whose comments appeared in the lead story in the New Zealand Herald yesterday. Those doctors were expressing concern that Work and Income case managers are advising people to go on to a sickness benefit, even though the doctors believe that most of them are not sick. The Minister made an outrageous statement earlier in the House saying that we were not providing him with information, but yesterday New Zealand’s largest national newspaper named two doctors, one of whom has been in contact with me. The Minister also has a Medical Council—an independent practitioners association—that has expressed huge concern about this issue.

I ask the Minister to take a call and tell us whether he and his department have been in touch with those brave medical practitioners. I say “brave” advisedly, because anybody who stands up to this Government is a brave person. I would like the Minister to tell us right now exactly what he has done about the concerns that those two doctors raised in New Zealand’s largest daily newspaper.

I received this correspondence from one of those doctors: “I am a GP. Many WINZ clients are sent to our clinic for sickness benefit forms to be completed. Most are unhappy with life rather than having true depression, and yet WINZ pushes them all on to a sickness benefit. I believe WINZ is being directed to push people on to the sickness benefit to make their job easier, because it means they no longer have to try to find work for these people, and also it makes the unemployment statistics look artificially good.”

The New Zealand Herald editorial also talked about this issue stating: “But if the doctors’ allegations are correct, it suggests subterfuge and a dereliction of departmental responsibility. Should it be established that a deliberate policy is being orchestrated, resignations should follow. Trickery of such nature would demand nothing less.” I suggest the Minister has failed New Zealand if, in fact, he has failed to follow up on the allegations made in the New Zealand Herald yesterday. The information I have claims that some 95 percent of many of the people who are currently going on to the sickness benefit are fit to work. If that is the case, I suggest that this Government is actually condoning benefit fraud on a massive scale.

The sickness benefit costs around $500 million a year. If we add the $1 billion a year that it costs New Zealanders to fund the invalids benefit, that is a massive amount of money. The New Zealand Herald actually makes the very interesting statement that most of the savings made in respect of the dole—savings this Government has crowed about over the last 18 months—are being swallowed up by greater spending on the sickness benefit and invalids benefit.

The sickness benefit was established, in the way that we know it, in the late 1930s. In 40 years only 7,500 New Zealanders were on a sickness benefit, but in just 4 years of this Labour Government the number has gone up by 11,000. Under its jurisdiction the number has gone up more than 1½ times what it took 40 years to reach. The only time that relentless rise in numbers actually halted was when the sickness benefit was put into a work-capacity testing regime. In other words, where case managers asked people: “What can we do to help you to get well enough to go back to work?”. That was all it was. It was done in the spirit that people were on a temporary sickness benefit because they were not able to work right there and then, but that they would get well enough to go back to work. That is the key issue this Government is failing to address.

That was a great contribution from Dr Muriel Newman. When the Minister stood up before and made some very interesting comments, he talked about food banks. Well, I would like to ask him: “Where are the food banks today?”. The food banks are there, they are growing, and organisers are constantly saying the banks are under stress. Those people are constantly saying that things are getting worse, not better, under this Labour Government. After 5 years of a Labour Government the food banks are still there and growing.

I have been looking at some of the initiatives under the social development portfolio, and some of the best things in that particular portfolio were put in place under a National Government: Family Start, Strengthening Families, and Social Workers in Schools were all initiatives under a National Government. They are all still there, but unfortunately because they are not initiatives of this Government, nothing much is happening with them. No improvements are being made, no increases are being made, and no expansion of Family Start is being made past the 16 areas it already works in.

Today I have been reading Making New Zealand Fit for Children:, a booklet from Unicef New Zealand. There are 40-odd pages about making New Zealand fit for children, and lots of things in relation to social welfare policy, or—what do we call it now—social development. I cannot find one thing in the booklet that says children need fathers. I look in there and cannot find one thing that says children need parents. There is nothing about that in there, and of course that is exactly in line with this Government’s and this Minister’s views that it does not really matter about fathers. It does not really matter about what structure a family is, but as long as it is a group of individuals who all feel like having the occasional group hug, then that will be a family.

Well, that is not a family—not by a long shot. It does not matter how many programmes this Government brings in to operate in that area—and there will not be that many—because until we get some absolute basics right and a Minister in the chair who understands that families need to function before they can do their job, we will not get any improvement.

Sitting suspended from 6 p.m. to 7.30 p.m.

Before the dinner break we were talking about things like food banks, and the fact that they are still here and growing. There was a certain amount of cackling coming over from the Government side at those comments so, fortuitously, I just happen to have a report from today’s New Zealand Press Association that states: “Hard-up Northland families are resorting to living in cars during winter, say emergency housing providers.” The date of the article is not 27 July 2000; it is 27 July 2004. It is today’s report, and continues: “Whangarei services say they are fully booked as families flock to them after relationship break-ups or to escape over-crowding or abuse. Some of their worst cases include: A woman living in a van with her two daughters, aged 7 and 14, for nearly four months.” What does the Minister say about that? The cases also include: “A woman and her two sons, aged 4 and 11, sleeping in a car for a week.”, and “A man in his 20s sleeping in a car with his 15-year-old brother for three days.” Whangarei services say that people are being forced out by expensive rents. They say it is the wet and cold weather that bring more people in—and the number is growing. They are saying that normally they get two or three calls a week, and now they are getting 25 or more.

That is what is happening under this Labour Government. So despite all the rhetoric and all the talk about how the Government is throwing money away—giving money here, there, and everywhere—the money is not getting where it needs to be.

That brings me to the issue of young Māori. I am really pleased to see Tariana Turia back in the Chamber today, and I am really pleased to see that, even if I do not agree with everything she says, she is a woman of principle. That is something this Labour Government is very, very slack about. That woman actually does stand up for people, and she does stand up for her own people, even if her views are somewhat misguided sometimes. But we should give her her due. She has acknowledged that the party that has done the most for Māori New Zealand is the National Party. We should remember that today.

I thank the members of the Opposition for the opportunity to talk about social development. It has been a debate, shall we say, and speakers have canvassed a number of issues. I want quickly to answer some of them.

We began with Katherine Rich acknowledging that we find ourselves, as she said, in excellent economic conditions. I thank the Opposition for that acknowledgment—that the stewardship of this Government does indeed go alongside some quite extraordinary economic conditions, as the Minister of Finance pointed out earlier today. I think one of the things that Katherine Rich often brings, with the leadership of Dr Brash, is a kind of honesty to these kinds of debates, and it was refreshing today to have an Opposition spokesperson so openly acknowledge that we are working in good economic conditions—indeed, in her own words, “excellent economic conditions”. They are, of course, attributable to the leadership that has been provided by this Government for over 5 years now. Many people, of course, on the Opposition did predict—

💬 Dr Muriel Newman: Absolute luck.

Hon STEVE MAHAREY:—that a change of Government to a Labour-led Government would lead to things like falling levels of employment, higher levels of unemployment, and an underperforming economy. I know they began by saying we had had luck for a year, then they said we had had luck for 2 years, then it was luck for 3 years, then it was luck for 4 years, and now even they are beginning to say, I think, that after 5 years maybe we are doing some things right.

Katherine Rich today had that kind of open honesty that is coming through from the National Party lately, as they acknowledge just how well things are doing. But I must say that from there she went downhill. She then began saying that the number of people on welfare had gone up. Ms Rich knows that that is not true. She knows that. We, in fact, are looking at a much lower number of people on benefits now than when we became the Government in 1999. Indeed, in just crude terms we are talking about a good 100,000 fewer people.

That is why, for example, when we look at the estimates we see we are returning so much money all the time to Treasury from the welfare budget, because we are coming under the forecasts all the time. So we are able to say: “We don’t need to pull that money down that you budgeted for us to get, because we’re seeing so many fewer people on a benefit, and they’re passing through so much more quickly.” That is something I think that Katherine Rich needs to go back to, and she needs to spend a bit of time getting in touch with those figures. I know that sometimes in politics it is a good idea to be unaware, shall we say, of the reality of the figures, so one can make one’s argument, but really after 5 years of watching the progress of this Government we do think it is probably time for her to have a look at them. She will understand that the numbers of beneficiaries across the whole board have dramatically declined in the last 5 years and that we are doing extraordinarily well.

She called for vision from the Government, and of course, all one has to do is visit the website to find lots of papers on strategies, and so on. But we are still waiting for one new idea from Katherine Rich. We have heard about times on benefits for people who do not work for the dole, and we have heard about work-capacity testing—all the failed ideas of the 1990s have been brought out again. Sometimes I wonder whether what the National Party is doing—because it knows it does not really have any ideas—is kind of pushing these ideas out so that people have something to talk about, while it hides the fact that it does not have a new idea about welfare, at all. So we would invite National Party members to give us a bit of vision, as Katherine Rich has asked for, because it would be very interesting to debate with them.

Then we went on to Judith Collins, who talked about the issue of people going across from the sickness benefit to the unemployment benefit. I just want to reiterate to people in the Chamber that Work and Income does not have a policy to encourage people off the unemployment benefit on to the sickness benefit. In fact, the Committee might like to share in some of the stats of the last little while—that is, over the past 6 years. From 1999 to now we have seen 1.1 million placements, so to speak, off the unemployment benefit—people moving off to go to something else. Only 73,000 of those went from the unemployment benefit to the sickness benefit during all of that time. Only 73,000 of that 1.1 million migrated, and 52,000 went the other way—that is, they went from the sickness benefit to the unemployment benefit. Because we want them to get a job of course. They get well, as people who are on the sickness benefit do, then they go back on to the unemployment benefit and go off, hopefully, into some kind of job. We have a good story to tell here, and I do thank Opposition members for giving us an opportunity to tell them about the April strategy, and how that is unrolling now and helping people who are on sickness or invalids benefits to begin looking at opportunities to get a job.

We then went on to Mrs Newman, who talked about the fact that I had asked her for cases that would tell us that doctors had been bullied into giving people forms that said they were sick. She went away this afternoon, when I asked her after the Committee rose, and she has given me a case. I will not read out the name because she told me she wants me to treat it with respect, but I just want to point out how this debate is based on such difficult information. This email says: “I believe Work and Income New Zealand”—it is not ‘Work and Income New Zealand’ at all these days; it is just ‘Work and Income’; the words ‘New Zealand’ have been gone for a long time—“is being directed to push people on to the sickness benefit to make their job easier, because it means they no longer have to try to find work for these people and also make the unemployment statistics look artificially good.” If we had a chance to talk to this doctor—because all I have here is “Hi, I’m a GP,”—I would say that it is not called Work and Income New Zealand; it is called Work and Income. There is no policy to push people from the sickness benefit—

💬 Hon Bill English: There is.

No, I tell Mr English that there is not. People who have a history in the organisation—and Mr English has because he was in Treasury—will know that one of the things that often triggers this debate is the reminder of what the criteria are for the sickness and invalids benefits. When doctors get that reminder they often reply and talk about it. They recently got a reminder and that is what probably triggered this person.

I say to this person that going on to the sickness benefit does not get someone out of looking for a job. Throughout they will be work tested, but I say to members on the other side that we will not work test the sickness benefit. Those people are sick. It might be the policy of ACT to do so, but we are not going to do it. Unlike the National Party we have lower caseloads, we have introduced enhanced case management, we have provided more money, we have provided more tools, and we will even get operations for these people, so they can return to work. In other words, it would not serve case managers at all to be saying: “I would like you on a sickness benefit.”, because then they would find themselves with an enhanced case-management process dealing with exactly the same people and trying to move them into part-time work.

So this doctor simply needs to pick up the phone, ring Work and Income, and ask: “Do you have a policy?”. We will say “No.” “What’s your name?” We could tell the doctor it is Work and Income, and not Work and Income New Zealand. We could also explain that it would do people no good at all to be back on the sickness benefit in terms of a job, because those people would find themselves very actively managed there as well—since April—to try to get them into part-time work. Now, I would say to Dr Newman that that is the problem with this debate. I do not have a doctor here, or a person I can go and see. This doctor is clearly wrong and if we could get in touch with him we would tell him so.

I say also to the member that on Thursday the national commissioner will be with the Medical Association. Its members have been invited because they asked to meet, today. The association has been asked to bring together all the information from actual doctors with actual cases to give to us, and we will deal with them. We do not want supposition, misunderstanding, rumour, or unsubstantiated things from the newspaper; we want real stories from the Medical Association. If any doctor in this country feels that he or she is being browbeaten into giving people sickness benefit forms to say they are sick when they are not, we want to get alongside that doctor and assist him or her to give good, sound medical judgments so that we get the right information.

The frontline of Work and Income is not staffed by general practitioners. We have to rely on what doctors say—and we will. We want to work with the Medical Association. Can we be more transparent or open than that? Can we try any harder than that? I will personally visit doctors, if they want me to, to tell them how they can work with us so they are not browbeaten by our clients or anybody else. How can we get more transparent and open than that? We cannot. That is the offer we are making, that is the offer Work and Income is making; and we will deal with that issue.

I thank members for the debate. It would have been good if it had been based on facts, but I enjoyed it anyway.

Vote agreed to.

Vote Foreign Affairs and Trade