Financial Review Debate — Ministry of Social Development

The financial review of the Ministry of Social Development takes some reading, because most of it is pretty depressing. In particular, a large amount of the review is taken up by the sickness and invalids benefits and the so-called strategy surrounding them. What we know is that under this Government, sickness and invalids beneficiary numbers have gone through the roof. We know that at the end of January this year, 120,000 people were in receipt of the sickness or invalids benefits. For a country of this size, that is an awful lot of people to be sick. It indicates a 38 percent increase in numbers since 1999. We know from that that the Labour Government under Helen Clark clearly makes people sick, despite the huge amount of extra taxpayer dollars that goes into the health budget every year. Clearly that strategy is not working. When we have asked the ministry why those numbers have gone up so much, its response has been that it does not know why that has occurred but that apparently it is halfway towards finding that out. How does the ministry know it is halfway towards finding that out, if it does not know what the answer is? The ministry has gone on to say that it thinks that a recent cause of the rise has to do with the reclassification of beneficiaries. In other words, the ministry is taking people off the unemployment benefit and putting them on the sickness benefit. That is acknowledged by the ministry. The Minister never acknowledges it, but the ministry staff have.

We know that there are 547 unemployed beneficiaries who have been unemployed for over 10 years. That is 10 years of those people’s lives wasted on the unemployment benefit, and 10 years of taxpayer dollars wasted on keeping them and their families, when they should be doing that themselves. That is 10 years of wasted life. We know that some people who are currently receiving benefits should not be receiving them, because they are not available for work. They are working in their family dairies or on little schemes that they have arranged with local collective organisations. People have those sorts of rorts going on, and we know that is happening because the people at the coalface of the Work and Income offices tell us so. They have a Minister who does not care enough to go in to bat for them and help them to do their job better. Their job is to be the gatekeepers of taxpayer dollars, not to dole out money time and time again and ask no questions.

The Minister has talked about a universal benefit, and that is referred to in the financial review. The universal benefit, as we found out today in the House, will have a multitude of add-ons. So far there are four that the Minister can remember, but we know there are more to come. The universal benefit will not do a scrap of good. This comes from the same Minister who took away the work test for people on the domestic purposes benefit whose children had gone to school. It is the same Minister, yet here he is talking about the universal benefit. It is supposed to fix the problem, but it will not do so.

We know that there is a huge amount of benefit fraud in this country. Again, we know that from the Work and Income staff who tell us that they are seeing it. We know it from the doctors who tell us that they are being approached with demands for sickness benefit forms. If they do not comply with those demands, the people will simply up and go to another doctor who will. The doctors know that if patients do that, they will lose the income from those patients’ families. The doctors know that their own kids can get attacked at school, and also that they themselves can be blacklisted. We have seen it happen. We have heard on the Social Services Committee about what happens to doctors who stand up and do the right thing.

Recently, I trotted around the country and visited various doctors, listening to them and asking them what they were finding. What I heard came as a shock. I heard of one particular town that had 19 doctors. Eighteen said no to one particular sickness benefit applicant, and the nineteenth said yes. The signal that sends out to those doctors is that they should not bother to try to do the right thing because someone else will not, and the doctor who tries to do the right thing is the poor mug who will not get paid and who will have to wear it next time.

💬 Hon Steve Maharey: Tell us who it is, then.

It is all very well for Government members to ask who the doctor is. We know what happened last year when doctors came out and said that was happening. It was on the front page of the New Zealand Herald. The first thing that the Minister said was that those doctors were complicit in fraud. That is just not good enough, because doctors are not actually trained to be the gatekeepers of taxpayer dollars; they are trained to be patients’ advocates and medical doctors.

The Minister said that he would fix the problem. But the first thing that he did when he came in was to get rid of the designated doctor scheme, which did fix it. Under the previous National Government sickness and invalids beneficiary numbers were going down, but under this Government they have skyrocketed. We have found that that is not because suddenly everyone has become old, which is what the Minister has told us. It is not because suddenly everyone has a bad back. We have looked at the numbers and seen that we are talking about people in their 30s and 40s who are suddenly sick. We in this party do not believe for a moment that suddenly 38 percent more people than 5 years ago are so sick that they cannot work. We do not believe that for a moment. We taxpayers are being told to believe that this country is suddenly sick. As I have said before, it clearly must be either the Government or the conditions that it has brought in that has caused that situation.

We have also been hearing about the amount of staff fraud that goes on. With regard to that issue, I say that the culture comes from the top. When we have a Government that goes around spending other people’s money willy-nilly with absolutely no understanding of accountability, we can expect that sort of culture to come on down. The culture is not set by the person in the lowest-paid job in an organisation; it is set at the top. The top happens to be the Prime Minister and the Minister. Their every word causes one to wonder what it is that they are saying, because one is never quite sure whether they are telling one exactly what they are supposed to.

There is also the issue of seasonal work, which has to be one of the biggest jokes around. The Department of Labour has told us that it will sort out the issue of seasonal work by bringing Thai fruit pickers into the Northland area, so that they can pick the fruit that all the unemployed people who are on the dole in Northland cannot pick. The department told us that Thai fruit pickers would come in and do the job, and that it would be a great thing. It is a great thing if one happens to be an orchard owner, with whom many people in the Opposition sympathise. But when I ask orchard owners whether the Thai workers can speak and read English so that they can comply with the occupational safety and health requirements, the answer I receive is that they cannot but that they are supervised.

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

I would like to come back to the issue of seasonal work and the difficulty that orchardists and market gardeners have found in getting anyone to pick fruit and asparagus over the last year. The ministry’s view is that the problem does not happen in Nelson or Hawke’s Bay. That will be news to orchardists who happen to be located in Nelson or Hawke’s Bay! The ministry says that it does happen and is a problem in Northland. Before the dinner break I was advising the Committee that the ministry felt that what it was able to do was to bring in Thai fruit pickers to work in Northland. But when I look again at the reasons given by the ministry as to why it is a problem in Northland, I see the reason is not that people have no encouragement to get off their bottoms and go to work, nor is it that people cannot be bothered. It is not for any of those sorts of reasons, which most of us would probably think were the reasons. The reason is that fruit pickers do not have good pay and employment conditions, such as—members should listen to this—the provision of toilets, which may cause difficulties. Apparently that is not a difficulty for the Thai workers. We are also told that transport is a difficulty. Well, it is obviously not a difficulty for the Thai workers, who come all the way from Thailand to pick fruit in Northland. It is obviously not, in fact, a difficulty that those workers do not speak or write English very well. Of course, the occupational safety and health requirements clearly cannot be met if people cannot speak or read the language. But we were then told in the select committee that that is not an issue because the Thai workers are supervised.

What that means, of course, is that we are supposed to expect that New Zealanders who have spent all their lives in this country, and who have spent huge amounts of their time on benefits, are not to be supervised, but that the Thai workers are. We say that that is not one law for all; it depends on where one comes from.

💬 Jill Pettis: They work in sweatshops.

Is the Labour member who was interjecting about sweatshops saying that it is OK to have sweatshops in New Zealand? We are not talking about that, at all. What we are saying is that people can come all the way from Thailand to work here under New Zealand conditions, yet we cannot find anyone in New Zealand to do the job.

We are witnessing the commodification of our seniors within the elder-care sector, due to a stand-off between the Minister and those providing services in the sector. Many of those currently working in the sector are exiting, particularly the religious providers; namely, Presbyterian Support, the Salvation Army, and the Methodist Mission. These are charitable service providers, but they cannot sustain large losses. They are being replaced by large overseas corporates that are in this business only to make profits. They are not interested in the quality of life of our seniors, but only in the profits their overseas shareholders can make.

If this Government would simply pay those already in the sector more per patient than the current $88 a day, then these committed groups would stay. They would also be able to pay their elder-care nurses more—these same nurses who are watching their pay fall way behind that of other nurses. Our seniors are missing out in our hospitals. As well, waiting lists get longer and longer, and the time before receiving treatment grows along with them.

Prior to Christmas 2004, the Government offered a 3 percent increase in funding. This was welcomed by the sector; however, it should be noted that additional funding is still urgently required to maintain services for the elderly, to provide staff with a realistic wage, and to attend to such necessities as maintenance, which has, for many operators, been deferred for some time. Power prices, fuel, and rates all go up faster than inflation, but superannuation stays stagnant with a meagre inflation adjustment. Our seniors are forced to stay in bed because they cannot afford heating. This is not dignity. This is survival, which this Government has forced on them.

When we look at how much it has cost the Government to get four people into work—in excess of $400,000—could that not have been put to a more worthy cause like taking care of our elderly, who have contributed enormously to the tax take of this country and deserve better?

Aged-care facilities throughout the country are watching anxiously as rest homes have been forced to close because of inadequate funding over the past 10 years. The Government promised a 3 percent increase unconditionally, but the funding has not been passed on to providers. If too many providers exited the sector, then the choice would become limited. Although we fully support a person’s right to be cared for at home if he or she so chooses, we believe that there will always be a place for residential care services for those no longer willing, or able, to remain at home.

In Auckland, those who have withdrawn, or who have publicly stated that they are pulling out, are Presbyterian Support, the Salvation Army, the Methodist Mission, and the Northern Masonic Association Trust Board. These organisations are charitable service providers that are focused on quality without commercial interest. However, they cannot sustain large and continuing losses. Funding has reached the point where these services are being lost.

I hearken back to the 1999 general election, when I said in Hastings: “We are breeding a nation of people who have lost the work ethic.” Five years later, in 2005, this has been confirmed by a report from officials who reported to the select committee that it was difficult to get the unemployed into seasonal work, and that immigrant workers were being employed instead, who have little, if any, grasp of the English language. This quote, surely, is applicable to our situation: “Give a person a fish; he or she will eat for a day. Teach people how to fish and they will eat for the rest of their lives.”

Daniel Webster on 1 June 1837 said: “I apprehend no danger to our country from a foreign foe. … Our destruction, should it come at all, will be from another quarter. From the inattention of the people to the concerns of their government, from their carelessness and negligence, I must confess that I do apprehend some danger. I fear that they may place too implicit a confidence in their public servants, and fail properly to scrutinize their conduct; that in this way they may be made dupes of designing men, and become the instruments of their own undoing.”

I rise at this point because most of the notified speeches in relation to this particular financial review have been given, so it is a good time, perhaps, to provide a few words from the Government’s point of view. I thank Mr Gudgeon for what I thought was a careful and reasoned speech around the issues he was raising; certainly, they are concerns that the Government wants to explore.

I return to the address given by Mrs Judith Collins, who is the National Party spokesperson on social welfare issues. I always thought that one of the responsibilities a member has when coming into this Chamber in order to spend at least 5 minutes of taxpayers’ time talking about an issue he or she is supposed to be an expert on—Mrs Collins is the expert on this issue from the National Party’s point of view—is at least to be informed. That is what scrutiny is for. That is why we have these financial reviews. That is why we have people sitting in the chair. That is why people are listening on the radio—I imagine that not a lot were listening after Mrs Collins’ intervention, but perhaps there were more after Mr Gudgeon’s.

I just want to come back to what, I guess, is the job. I point members to an example of what I think was simply a waste of time, if that is what happens in a financial review debate. Mrs Collins raised the issue of seasonal workers. As far as I can tell, Mrs Collins knows nothing about seasonal workers. For example, she said that there was no issue in the Hawke’s Bay. I tell Mrs Collins that my associate Rick Barker comes from the Hawke’s Bay, and that he has campaigned for many a year to try to ensure—as the number of people who are unemployed has decreased to almost nothing in the Hawke’s Bay, and as growers have found that they no longer have a pool of labour that, come harvesting time, they can turn to—that people work together within the industry in order to do a lot better at getting labour prepared, trained, and available to clear crops.

I was in the Hawke’s Bay last week talking with people from the industry. They sat in a room together and talked about how they appreciated the work that people such as Rick Barker had done and that the Government had done. They were keen to address issues such as toilets, accommodation, transport, and wages, and to not have people in the industry who simply hoped that labour would turn up at the door when they were trying to pick their Braeburn apples in the very near future.

That has been going on for many years, and it is a direct result of a shift in the environment of people involved in seasonal cropping. They relied a lot on the persistently high number of people who were unemployed. They would turn, at cropping time and harvesting time, to organisations such as Work and Income to ask whether they could have some people. There were thousands of people unemployed in the Hawke’s Bay. There are around 900 in the industry now; in the whole of the Hawke’s Bay region there are about 1,600 unemployed people now. Clearly, they are not all suited to work on orchards, so the number of people available is quite small.

Therefore, there is only one way forward for the seasonal industry. Rick Barker has worked with the seasonal industry on that, and the industry agrees with him: it must prepare itself, like any industry does, to try to make sure that it has its share of the labour market. The industry is moving to such exciting ideas as trying to create a harvest trail. So instead of, perhaps, people picking Braeburn apples and having a few months’ work—or even a few weeks’ work—at most, they move from one crop to another crop; they move around the region and maybe find themselves 12 months’ work.

All that work is going on. It has been going on for years. People, whether they are in Northland, Otago, the Hawke’s Bay, or wherever they might be, compliment Work and Income because it is working with the industry and doing an outstanding job. Yes, the situation will, to some degree, be augmented by bringing people into the country to help do that kind of work. Of course, the work is very difficult to predict—if we get a different kind of climate one year then the Braeburn will come on during a different week from the week they came on last year. It is all a little bit in the lap of the gods to that extent, so one has to have some flexibility. That is also what we have been working on—to ensure that we have access to immigrant labour. Immigrants can come in, do that work, and go back home again. It is good for them and good for this country. The working holiday programme is also part of the whole process of trying to have Italians, Germans, Swedes, and so on who can easily access the work when they come here.

If a financial review speech from the National Opposition spokesperson on this issue is going to have as its dominant theme an exposé—as she likes, I imagine, to think about it—of what is happening in seasonal work, then what is the point of having this kind of debate? The Government would welcome—in fact, we want to have—a debate about how to improve the way we get those crops in each year. But I sat here and waited for one single glimmer of a policy idea. All I got was some debate about whether Thai people need to go to the toilet versus whether New Zealand people need to go to the toilet. That seems to be the sum of the insight offered by Judith Collins on behalf of the National Party.

I know that, perhaps, when members come to the Chamber at half past seven at night, they are reliant on the fact that no one is listening to the radio. Maybe that is what they are doing. They may feel that if they pop down and say some drivel into the radio—

💬 Rodney Hide: They are not listening now!

That is no wonder, after Mrs Collins’ speech. As I said before, that has probably killed the listeners off. Listeners are not getting a debate. Mr Gudgeon gave a carefully prepared speech about the issues of concern to New Zealand First, and the Government takes those on board. But, really, I just ask members in the Chamber tonight whether they learnt a single thing from the National Party about what it said was essentially its biggest issue—seasonal workers—in the debate on this particular financial review. Not one single policy was put forward. There was no glimmer of insight into the issues faced by the seasonal worker industry. Yet people from this industry listening at home know that they produce a huge amount of apples, kiwifruit, or whatever it might be, across this country. They produce an enormous amount of wealth for this country. They have a serious problem in a low-unemployment environment—we have a 3.6 percent unemployment rate, and potentially it will go down further—because they have to be able to pick those crops. I would have thought it was the job of a person given the task of being the National Party spokesperson on these issues at least to sit with some people from the seasonal industries in this country, and at least to find out what the issues are, and not to come here and waste people’s time in a financial review of this nature with the kind of speech we just heard.

So I just want to reassure the Committee that, although National Party members have nothing to say of any value at all about people who do seasonal work and who pick all those crops around the country, Government members do. We have been working on that issue for 5 years. I began doing work on it when I first became the Minister for Social Development and Employment. Rick Barker now has that portfolio as a delegation. He travels all over this country and talks to people about those issues. He has done a fantastic job. I say to Mrs Collins that when I asked people in the industry in the Hawke’s Bay the other day what they thought of the work Mr Barker was doing, the answer was that it was fantastic. They said that he understands their issues, talks to them face to face, is out there on the farms, knows what they are up against, and is coming up with policies that help.

The last thing I will say as an indication of that—Mrs Collins might like to know—is that one of the major changes Mr Barker has fought for, for a long time, has been to get people who are in seasonal work, such as in the meat industry, support when they are out of season so that they can sustain their households and come back into the industry later on. It is a great issue that we will address in the near future, because Mr Barker has fought for that. I imagine that people in the seasonal work industries will, therefore, see his work as good, concrete, helpful work by a member who understands exactly what they are on about.

I thank the New Zealand First folk for their serious work this evening. They have taken this review properly. But I do despair at what I hear all the time from National Party members now. I guess we know that they have written off the next election and are merely going through the motions as they wait for the inevitable defeat later on this year. As a result, they do not feel that they need to do any work. Well, I say that they do. They still get a wage. They still get paid. They are still expected to come down and do the job in this Chamber. I am here because I want to be scrutinised, and my department wants to be scrutinised. We want to hear about the ideas people have, and if they have a good idea, it will be in action tomorrow. That is how we work. We do not care where the ideas come from; they just have to be good ideas, and we will carry them out. I will now sit down and hope that Mrs Collins will take a further call and give one single good idea that we can use to go forward and spend taxpayers’ money on in order to make a real difference to this country.

It is a privilege to follow on from the Minister for Social Development and Employment as we consider this financial review of the Ministry of Social Development. I have to echo the disappointment from National Party member Judith Collins. In answer to the Minister’s question, I guess that perhaps the best idea that could be put forward to the National Party is to “bring back Katherine Rich.” At least, that woman had some vision—we might not have liked quite what the vision was, but she did have a policy to put out. But what happened? The policy was slapped into the corner, and she was packed off to the back bench for having vision in that party.

I take the point the Minister made previously—that we did not hear any policy from National Party members. What utterances we have heard in recent weeks have been calls to cut the domestic purposes benefit, to get rid of this and that, and generally to take us back to the era of the 1990s when, of course, there were terrible benefit cuts. Perhaps National Party members have forgotten what a social service is in this nation, and how many people have benefited from such a service and have therefore become great contributors to our country in helping, at least, to provide taxes through working.

We have the lowest unemployment rate in recent history at the moment. This Government has delivered on its promises. This Minister and his ministry have worked extraordinarily hard, not only over the last year that we are reviewing but certainly in the time since this Government came in during 1999.

The Working for Families package, which will be rolled out extremely shortly, will be fantastic news for New Zealanders. There are New Zealanders who will get somewhere in the region of up to $100 extra a week in their pay packets—in their hot little hands—to help build and strengthen families so they can continue to make their valuable contributions to this country. Those people will be beneficiaries. Those who are in need in this country will benefit from that particular policy package, which of course comes to light on 1 April. That will be very good news for New Zealand and for many hundreds of thousands of New Zealanders.

But we are not only introducing that; we have worked on strengthening families. That has been a tremendous help to many New Zealanders around the country. I have to mention that within my own electorate some of the strengthening family initiatives have gone on there, in order to combat our not-too-proud history of domestic violent crime, child abuse, etc., that has occurred in recent history in the Wairarapa. We have not heard many of those stories coming out of the Wairarapa in the last year or so. That is because community members, along with local government and certainly with a major contribution and effort from central government—namely, the Ministry of Social Development, Child, Youth and Family Services, and numerous other services—are working extraordinarily well together now, to try to get on top of those problems we experienced.

The problems are not only in our own area, of course, but also in other areas of the country. As we run out pilots in order to battle some of those issues, we are seeing ever-increasing, positive results around the country. We are trying to turn round those negative trends, but that relies on our supporting families, strengthening families, and providing expertise where the problems are.

There is a need for getting in together and working much more closely with non-government organisations—those that at times are often able to pick up the challenges facing communities and, with the assistance given by Government agencies, to roll out their particular plans and pilots for addressing specific needs. One size does not always fit all, around the country, in dealing with those particular matters. Generally, we are able to tailor services, advice, and actual help at the coalface to suit those communities and their particular vision of how they would like to develop. They have to have that buy-in, and we have to have them on board, in that sense.

This Government, with this Minister Maharey, with his Ministry of Social Development, and with all the other agencies attached to that, has done an extraordinary job.

I am happy to speak on the financial review of the Ministry of Social Development. I am glad the Minister mentioned the inordinate time that Judith Collins spent talking about seasonal work, although it mirrors the inordinate time she spent talking about seasonal work during the select committee’s financial review of this ministry. Mrs Collins seems to think that putting people into seasonal work is one way of solving unemployment. But anyone who has done seasonal work—for example, anyone who was a university student in the 1990s and found that seasonal work was all there was and had to take it—knows that it is extremely difficult work, and not everybody will be capable of doing it. Now, at a time of low unemployment many able-bodied workers are working, so seasonal work might not be the solution that it once was in a time of high unemployment.

But the real low point in the select committee arose when we were discussing Thai workers, and Mrs Collins took to calling anyone who did not speak English, illiterate. She asked whether it was true that illiterate people who came to our country could not speak English and therefore follow instructions. It had to be pointed out to her that not only do people from other countries often speak English but they are not illiterate just because they do not speak the same language as we do.

The most striking aspect about this report from the Social Services Committee is what is missing from it. In reading through it one cannot find any reference to, or section on, the domestic purposes benefit. That omission really needs to be pointed out, because, after all, the domestic purposes benefit has been targeted by the National Party as one to be attacked during this election. National says that we need to get people off the domestic purposes benefit, but there is no mention of that benefit in this review of the Ministry of Social Development. In fact, in the select committee not one question was asked by an Opposition member during the entire financial review. It came down to a Government member to talk about the sterling efforts of the ministry and the changes it had made in getting women—and men too, because men are on the domestic purposes benefit—back into work when it suited them, and, more important, when it was appropriate for their families.

The policy of getting those people back into work has to be one of the most important ever implemented by that Minister and his ministry. With the casework approach these people are not treated as though they are a burden on society. There is an appreciation that raising children is difficult and carries with it financial costs, but that it is even more difficult for a sole parent. There is acknowledgment that the State has a role to ensure that every child, including a child from a sole-parent family, has financial support to ensure that he or she has the same opportunities as children who are fortunate enough to have two parents supporting them.

Although National members seem quite happy to talk to the media about the domestic purposes benefit and what National would do, when they had an opportunity at the select committee to ask questions of the people who deal with these issues every day, they had nothing to say. They know that the number of people on the domestic purposes benefit is going down.

I take this opportunity to recognise the excellent work done by Mr Peter Hughes and all his staff at the Ministry of Social Development. He is an extremely capable chief executive in charge of a very capable ministry. There needs to be recognition by the House of their hard work over the last few years.

Another policy that will make a big difference is the Sickness and Invalids Benefit Strategy, whereby the focus is on what people can do rather than on what they cannot do. We want to ensure that people are on the correct benefit. If they need to be on a sickness benefit or an invalids benefit, they will be put on that benefit, and not on the unemployment benefit. If they are on a sickness benefit or invalids benefit they can get the tailored help they need. Too often in the past the focus was on what the person could not do. If a person’s job involved a lot of physical activity and the person suffered an injury and could not continue in that job, he or she might go on to a sickness benefit or invalids benefit. But we should have thought of what else the person could do, and maybe not in that area of work.

It might be interesting to know how many of those on a sickness benefit or invalids benefit today are in this position because during the 1990s they did not go to a doctor when they should have, or did not seek medical help, because they could not afford it, or because it was not accessible, and then reached the point of no return. That is why primary health is so important.

Report noted.

Ministry of Foreign Affairs and Trade