Estimates Debate — Vote Social Development

Mr Chairman—

💬 Hon Clayton Cosgrove: The cover girl!

Thank you very much. At least I am not part of a “plug and grow” outfit like the member is. The other point, if the member opposite wishes to talk about my cover-girl day, is at least they did not have to airbrush me like they did a certain person from his party.

One of the points I want to make here today is that we have been waiting for the single core benefit from Labour since 1989—that is 17 years. After 17 years Labour, which has been so good at promoting a single core benefit, says it wants to introduce it. Who wants it? Anybody who wants to hide what is happening with the invalids and sickness benefits.

One of the problems of the single core benefit is that a couple of different MPs are on the record speaking about it. The Prime Minister, Helen Clark, has said there will be no losers under the single core benefit. She said that—she said there will be no losers. Then David Benson-Pope said earlier this year that he could not actually confirm whether anyone would be worse off, that some people might be but that was still to be decided. David Benson-Pope said further, again earlier this year, that the Government would have the legislation in by the end of the year—that is, the year 2006, for those who are interested. And, just recently, we have heard that maybe it will be introduced in another 18 months.

The fact is the Government is all in a pickle, and Steve Maharey has left David Benson-Pope trying to deal with the single core benefit. I would like to put on record that Steve Maharey is not all bad. Actually, he can be a bit of fun when it comes to stuff like this—putting in place a massive bureaucratic change for no particular reason other than that it is a better way to hide the facts. And we know that this Government has been very good at hiding the facts. One of the facts the Government does not like coming out is that we now have about 123,000 working-age adults who are too sick to work. The Ministry of Social Development and its Minister, David Benson-Pope, make interesting statements like “The number has always been going up and has never come down.” Well, it actually did. In the last couple of years of the National Government in the 1990s, the figures for sickness and invalids beneficiaries started to decrease, because a little bit of rigour was put around getting people on to those benefits.

One of the problems that Labour created when it came into Government in 1999 was that it instantly took off restrictions on the sickness and invalids benefit designations, which meant that numbers on those benefits suddenly went through the roof. Strangely—lo and behold—the unemployment numbers came down, and the number of sickness and invalids beneficiaries went up. Today someone is three times more likely to be on a sickness or invalids benefit than on an unemployment benefit. So, after all the money that, as we have heard this afternoon, has been poured into the so-called health budget—the one that now has one bed per bureaucrat in the health system in this country—people are now about three times more likely to be on a sickness or invalids benefit than on an unemployment benefit, and that is something the Minister has been a total failure at dealing with.

We have been told by the Minister that the growth percentage is not as high as it was last year. Well, what does that mean? Does it mean it has gone up slightly less? No, it does not mean that. It actually means that the core figure is now so high that only a couple of percent means a huge increase—and every year it keeps going up under this Government.

Labour has yet another new scheme to deal with it and, of course, like its other schemes, it is voluntary. So it will not be much use. We are told by the Minister that it is a new scheme that has never been used anywhere else in the world—oh, except for the United Kingdom; oh, except for most countries, which have had something similar, but some of them have had a little bit of courage and done something and made the schemes compulsory. The Government was able to put the Working for Families project through the Ministry of Social Development, and it is quite right that the package should be in the area of social development or, in other words, social welfare. The reason for that is it is welfare; it is middle-class welfare. There are now families in this country earning $130,000, $140,000, or $150,000 a year who are beneficiaries of the taxpayers.

💬 Hon Member: What?

Yes, they are. Those people are supposed to line up with their little hands out, asking for a teeny-weeny little bit of their money back for being good people and voting Labour. Well, that is not going to work. One of the interesting facts we do not hear too much crowing about is the number of people taking up that brilliant opportunity to go and stand in line and ask for a little bit of their money back. The reason we do not hear about that is, basically, people who are earning reasonably good money want to get ahead. They do not want to be classed as beneficiaries, because being a beneficiary is a pretty tough time for many people. They do not want it said that they are part of the 300,000 working-age adults in this country who are on full-time benefits, which is the number we have at the moment.

Over the last few years some good things have happened in New Zealand. One of those things has been that we have had very good export prices for our exports. There has been a commodity shortage of the things we sell, and that has been fabulous, but it is not something we can simply rely on year in, year out. We are now seeing oil prices going up and petrol prices getting higher. Those of us who do our own grocery shopping for our own families—and I am very proud to say I am one of those people—know that the price of fruit and vegetables has gone up hugely.

💬 Hon Clayton Cosgrove: What a humanitarian contribution! You go to the grocer’s yourself—what a saint!

I know that that is something the member for Waimakariri may not know much about. He knows about “plug and grow”, but he does not know much about fruit and vegies. We know the price has gone up very high, and that has made it very difficult for families to cope. Those families who have trouble coping do not want to have to turn up to the Working for Families people of the Inland Revenue Department and say: “Give me some money back.”, because it is actually tough out there. It is all very well for a party like Labour, which does not have a family-friendly focus as we do in the National Party—we understand what it takes to look after children—

💬 Georgina Beyer: Get up, the families!

It is no good Georgina Beyer calling out about this matter. It is just no good at all, because, frankly, it does not help families to be told to go and line up like everyone else and ask for money back. This country needs more people working better, but, at the same time, it also needs to have people earning decent wages and keeping enough of their money so that they do not have to go, cap in hand, asking for a benefit. That is what this country needs. Why has that side of the Chamber suddenly gone so quiet? Well, those members have gone so quiet because they know that that is a bit of common sense, which is something they are not very good at connecting with.

We are told by the Minister that we will have some new approaches. Well, we will have some new approaches, all right—once National gets into power, which hopefully will not be too far away. We will certainly have some new approaches. The Minister has told us, for instance, that Pacific people have been doing really well. We have been told that there is a strong focus on reducing the number of Māori and Pacific people who are unemployed. That is just great! They happen to be on the sickness benefit instead. We also happen to know that real poverty in this country has increased under the Labour Government, particularly amongst Pacific New Zealanders and Māori New Zealanders. We know that because the ministry’s own hardship survey showed exactly that. The Labour Government’s answer to that problem was the Working for Families package. Well, I am sorry, but the Working for Families package does nothing to get people into work, it does nothing to help the poorest people cope, it does nothing to help them learn to budget, and it does nothing to help the children of those people.

💬 Shane Jones: The member is looking backwards.

I know that it is all very well for those millionaire types over in the Labour Party, who are brought in to try to show that the party has a business background. Oh, Shane Jones is very keen on doing that, and, of course, so are the other millionaires in the Labour Party. They may not know about this but, unfortunately, it is—

💬 Shane Jones: There’ll be two sides to that sort of story.

I raise a point of order, Mr Chairperson. I thought people were not supposed to be able to move from the back bench up to the front, as Mr Jones has, so they can shout out better. Is that not against the Standing Orders?

The CHAIRPERSON (Hon Clem Simich): No. I am certain he has not moved for that purpose, at all.

Has he not? All right. Thank you, Mr Chairperson.

Thank you for the opportunity to really paint a little of the wider picture of social change in New Zealand between 1995-97 and the current period. I am really pleased to say, as I did in the House 2 days ago, that the overwhelming improvement in the social indicators in this country should be something that all New Zealanders are only too happy about. I will deal with those in general terms, and then come back to the specifics, if I may, in a moment.

First of all, over that 10-year period there has been a marked improvement in the affordability of housing. That should be a great concern to all of us, of course, and it is still an issue for us in Government. One of the reasons for that issue, of course, was that our predecessors in Government sold in excess of 13,000 State houses, so we should not—

💬 Hon Clayton Cosgrove: What did they do with the money?

They mostly gave it to their mates, or privatised for their mates—just as they do with so many things, unfortunately. So we should not be surprised, as a community, that there are still issues around the affordability of housing in this country. But that is just one indicator.

The second of the half dozen I will read out concerns a massive reduction in the share of households with low incomes. That is really good news for all New Zealanders—

💬 Judith Collins: Let’s talk about the vote.

Hon DAVID BENSON-POPE:—and I can come back to the specifics of the unemployment shift by ethnicity, if the member is really interested in the facts.

There has also been a most significant improvement in market income per person, with an increase in real gross national disposable income per capita from around $23,000 in the mid-1990s to around $29,000 in 2005. So that is a significant movement. It is rather ironic that as I came into the House today I heard, after the demonstration at lunchtime, of course, Dr Wayne Mapp giving, as his answer for the real issues we have about productivity in this community, a further attempt to force down the wages of New Zealanders. Like most New Zealanders, and certainly like members of the Government and its support parties, I am concerned it has taken as long as it has for the increases in real wages for people to flow through into our economy. It is so ironic that that is happening just as the Australians are finding that the kinds of policies that that degenerate party, National, applied in the 1990s are starting to bite, the Australian workforce is facing exactly the same quite corrosive policies that the National Party has historically introduced, and is trying again to introduce.

💬 Judith Collins: What’s this got to do with the vote?

I am not going to take a point of order, but I say to the member that it would be better if she articulated better. I do not mind her trying to interject, because she just makes a rather sad fool of herself. I say further that that sort of behaviour will never get that member any respect with her constituents, or her photo on the front page of the New Zealand Woman’s Weekly, or even of Investigate.

The other indicator, among many that have improved, is an extraordinary improvement in employment participation. That has increased by over 5 percentage points to 68.5 percent in March this year, which for New Zealand is an all-time high. Let me dwell for a moment or two on the reduction in unemployment. Unemployment was over 6 percent in 1995, it rose to 7 percent in 1998, and now it is 3.9 percent—the second lowest in the OECD after Korea, whom we were ahead of last time. The reality of unemployment—all working-age unemployment—is a nearly 30 percent reduction since the last time National was in power. So Mrs Collins can play whatever games she likes with her interpretation of the facts, but the reality of the figures is that if we take all working-age benefits, there has been a startling reduction in unemployment in this country.

I also say to the members of this Chamber that very few people—only one in 11, I believe, is the figure—move off the unemployment benefit and on to the sickness benefit. I also say, before I come back to the raw unemployment figures, that I do not apologise for being part of a Government that provides a benefit for people who get sick. One of the realities of the world that so few National members opposite realise is that sometimes people actually get sick and sometimes people are invalided. There are plenty of sick people—for different reasons—sitting on those benches. I am really proud to be part of a Government that makes no apologies and no bones about supporting people who need that support.

Having said that, the fact is that when this Government took power in 1999 there were 161,000 people on the unemployment benefit. That figure is now, for the first time in 24 years, less than 40,000. That is a remarkable achievement. The sorts of policies that this Government is espousing and driving will make sure that that sort of support for working New Zealanders will continue.

There has also been a really welcome improvement in tertiary education. Around 11 percent of the population aged 15 years or over enrolled in tertiary education in 2005, compared with only 8 percent in the mid-1990s. There has been an increase in the share of school-leavers with higher qualifications, with over 70 percent of school-leavers having greater than level 1 National Certificate of Educational Achievement in 2004, compared with around 65 percent in 1996. Most important, if we are genuinely interested in the future of our country, we should be delighted at the huge increase in expenditure on early childhood education—from 91 percent in 2000 to 94 percent in 2005.

The prime focus of this Government has been twofold. It has been, firstly on getting people into work, and doing things like expanding youth transitions services, and so on—I have talked about those numbers—and, secondly, on supporting people in work and incentivising work. I want to talk in some detail about the Working for Families tax relief extension. Because we are so committed to ensuring that families have every opportunity to give their children the best start they deserve, we are continuing to roll out the Working for Families package. That package is delivering $1.6 billion of targeted tax relief and social assistance through Working for Families. Eighty-five thousand more families get additional tax relief through family assistance. By 2007-08, 350,000 families will be getting support from the Working for Families package.

The Working for Families OECD data confirms that for a single-earner family with two children on average earnings, Working for Families tax credits have taken New Zealand from having the eighth-lowest tax take to having the fifth-lowest tax take in the OECD. Under Working for Families, a family with two children on an average income gets a further $90 a week—further to the original instalments they received—which makes them, in total, roughly $116 a week better off since 1 April 2005. The new in-work payment is worth up to $60 a week for families with up to three children, plus an additional $15 for each subsequent child. Under the Working for Families package, paid work offers families the greatest opportunities to improve their financial circumstances.

I say to colleagues that one of the somewhat unexpected but welcome facets of the Working for Families introduction has been the choices that people are making. This Government has been criticised, unfairly and inappropriately, for forcing people into work. The reality is quite the opposite. The childcare assistance and the support for working mums and dads who want to do that have been extended enormously. Fascinatingly, since the last instalment of the Working for Families package, a number people have written to us saying that this is a fantastic social initiative, that they can now make do on one salary, and that they can look after their children.

So the support that this Government is putting into the community is the sort of support that empowers people, empowers families and communities, and assists them in making the best choices for them and their conditions.

I rise to speak to Vote Social Development. This is the vote that represents 27 percent of total appropriations across all votes and has enjoyed a 5.8 percent increase in this financial year. It lists four key priorities. It refers to the work of Work and Income and Child, Youth and Family Services, and to work around aging issues. What really interests me, and what I have a bit of a question mark over, is the fact that one of the four priorities for this immense vote is “strengthening social development leadership”. I find that a bit nebulous, and I would like the Minister, David Benson-Pope, to refer to what that is all about. Eighty percent of proposed departmental expenditure is dedicated, however, to two major areas. One is the benefit area, and the second is divided between students and seniors.

One of the things that concerns me—and I have not heard anybody mention it so far—is the merging of the two entities of the Ministry of Social Development and the Department of Child, Youth and Family Services. This is something that happened for reasons that none of us have ever had clearly explained to us. In fact, when we talked to the Ministers about this, they said it was done “because the stars were in alignment”. They then referred to the competency and skills of the chief executive of the Ministry of Social Development, Peter Hughes, which I accept. He is a very competent person, and nobody is doubting that.

But I think we have to be honest about the fact that this has all come about because of the departure of Paula Tyler back to Canada. This was a huge disappointment to myself. She was employed because she had previous experience in the differential intake that Child, Youth and Family Services were implementing. That idea was shared with the Minister by United Future in the last Parliament, and we were pleased to see some uptake on it. We are a little concerned. We were assured that it has not stalled, but to my understanding there are currently two pilots running.

I want to talk about this, because this differential intake is the opportunity for the very, very competent non-governmental organisation sector to contract to the Government to do the medium to low risk cases that Child, Youth and Family Services is drowning under. Notifications to that department go up 15 percent a year. They went up 30 percent after the death of Coral Burrows. A great way to relieve the pressure on the department and to allow it to focus on the very good statutory empowerment work that needs to be done in the high-risk cases, would be to give the medium to low risk work to the competent agencies in the community.

If we read some of the comments made by COmVOices which is an organisation comprising groups such Philanthropy New Zealand and Volunteering New Zealand, we will see its calculation that for every dollar value of social services those organisations provide in the community, it would cost the Government between $3 and $5 to replicate that work. We have a huge capacity of social services in the community right now that United Future would like to see the Ministry of Social Development take a much stronger interest in.

One of the problems community groups have is that when they take on Government contracts they sometimes feel that the obligations that come with the contracts kind of rip the soul out of their organisations. We are not against the ministry requiring accountability from those organisations for how they spend the money, for the services they deliver, and for the outcomes they get—of course they must be accountable for those—but sometimes the ways and means the organisations have of being effective can become undermined when they have to take on a Government contract. So I encourage the Government to consider seriously, firstly, looking at better utilising those groups in the community and voluntary sector that are already delivering cost-effective and fantastic services. If they were allowed to build capacity and get some good Government contracts, then they could deliver even more substantial outcomes to New Zealand society than they are currently. Secondly, I would like to think that the Government would consider looking very carefully at the kinds of demands it puts on those contracts—demands that could actually destroy the ethos and effectiveness of the organisations that are getting them.

An example I had recently was of a provider in Christchurch that provides employment and accommodation for people coming out of prison. That provider has a phenomenal success rate, but it is scared to take on a Government contract because it knows that the Government would then require it to take on anybody the Government asked it to.

Progress reported.

Report adopted.

The House adjourned at 5.56 p.m.