Social Assistance (Debt Prevention and Minimisation) Amendment Bill

It is my privilege again to speak on the Social Assistance (Debt Prevention and Minimisation) Amendment Bill—in particular, on Part 2 and amendments to other Acts. Of course, this really deals with the fact that other Acts, including the Injury Prevention, Rehabilitation, and Compensation Act, are to be amended, and also that the supply of arrival and departure information for benefit purposes is to be disclosed. We have had a very reasoned debate so far in the Committee tonight about the need for this, and I think that we have unanimously decided that it is good legislation to have.

I will address a few of the issues about the amendments to other Acts, in Part 2, and why it is that obviously it is now a lot easier to transfer information between various departments, and to collate it. I remind the Committee that is was not too long ago that we did not have mobile phones. When I first started practising law I remember when we got our first fax machine, and we thought that was really exciting. And I am not that old, at all, even though I may occasionally look like it.

💬 Hon Ruth Dyson: I did not say anything—

The Minister is very kind. Of course, she would not; I would look so young compared with her. It is not that long ago when we got our first laptop computers, and it is not that long ago that we actually got computers in Government departments, where front-line staff could access information from them. So it is really very important that we constantly keep up with new technology.

Today when we heard from the chief executive of the Ministry of Social Development about the Patterson $3.2 million fraud, one of the things he pointed out was the fact that it has been only in the last couple of years that the register of births has been computerised. That is because, basically, it has been a manual system ever since it has been kept. But the technology now exists so that this can be computerised and matching has become available. When the Department of Internal Affairs some years ago updated its passport system it went on to a computerised system, and I remember it was back in the 1990s that that happened.

Of course, we have changing technology, and this changing technology gives us all sorts of opportunities to detect and deal with fraud, and with identity fraud. It is also interesting to note that none of these instances we heard about today—which, as I recall, were about 124 different aliases—involved identity theft. Not one of them involved instances of this man Patterson going and looking in graveyards for the names of dead babies and stealing their identities, which are some of the instances we have heard of before in the last few years. So not only is technology moving on but so are the fraudsters. We will not just be able to pass this legislation and think “Well, that will be it; we don’t need to do any more.” We will have to come back to this as technology changes. Just because we cannot anticipate now what that technology, or its changes, will be, it does not mean to say that they will not happen.

So I think that it is incredibly important when we look, for instance, at the supply of arrival and departure information for benefit purposes, in Part 2, and at other amendments to Acts—those to the Customs and Excise Act, for instance—that we consider the fact that some people will set about making up their minds to cheat the benefit system, and to cheat the taxpayer. Those people are often extremely capable people. Certainly, Patterson showed himself to be extraordinarily capable in terms of technology and the use of it—so much so that the chief executive of the ministry has even written to Mr Patterson and suggested that the ministry can assist him to go straight after he comes out of prison. A letter on that matter was tabled today at the select committee, and I find that quite extraordinary. But of course this is a person with such talents, and it is amazing to think they have been misused in this way.

Certainly, when I was growing up we did not have the Internet. Many of us with children will say that if we have any new technology we get the kids to sort it out first, and then they can give us the dummies’ guide on how to operate it. I can see there is quite a bit of nodding around the Chamber. Some of us do not need to learn about it, because our children will do it for us, we think, but actually we should do it. We should embrace it and go with it. Unfortunately, this is what will happen—or we should say fortunately.

It is my pleasure to take a call on Part 2 of the Social Assistance (Debt Prevention and Minimisation) Amendment Bill. Part 2 is not too dissimilar to Part 1, for it talks about amendments to the Customs and Excise Act 1996 in relation to locating debtors, and to the Injury Prevention, Rehabilitation, and Compensation Act 2001, which concerns accident compensation. So Part 2 basically talks about matching the two agencies involved with those Acts.

I was listening to my colleague Judith Collins talk about technology. She has a great point. When I first came to work in the workplace, we had computers. They were not new technology to us; that is what we had gone through university with. We kind of forget that it takes a while for people who have not had them to catch up. It costs a lot of money for the infrastructure to put all these systems in place, and to get the technology, as it increases, to a point where it can interact with all the different systems through all the different departments. We see now in the departments’ financial reviews and budgets that they have huge amounts of money set aside for information technology development and software and hardware upgrades. It is absolutely true that the more information we get, the more it costs to have it and the more it costs to store it. We are getting to the stage now where the storage of the information we have uploaded is costing a huge amount to maintain, and, as technology changes and all the departments upgrade their software, those departments cannot read all the old information they have, because it is now in different technology and software. It is so important that we stay up to date. The matching of data in this bill is really the beginning of what we are seeing in this area of technology, and it will become a lot more complex, quicker, technical, and expensive, but at the same time it is the tool we are becoming more and more reliant on in the world we live in.

I think it is great that we are seeing this data matching beginning and happening through the different departments, but it is also important that we recognise that we have to invest in this technology all the time and keep at the cutting edge of it, because before we know it we will be able to match data with Australian databases, as well. This will come with time as we all become closer, because we are becoming much more global and more accepting of other people’s systems as we all get to the same playing field. New Zealand does have that distance and we have been a little behind compared with where things are in the United States and Australia. When I worked in London, the technology over there was a lot more advanced than it had been where I worked in New Zealand. That was a very good point that my colleague made.

This data matching is really important and I would like to tell members a little bit about it. I am reading the briefing paper that the Ministry of Social Development gave us, which is absolutely fantastic. Every time I get up to speak I always look at the ministry’s briefing notes, because we forget what the officials tell us. The briefing notes give us a lot of information when we are putting this type of legislation together. I would like to share a little bit on this aspect, because no one has touched on it so far in this debate. It is not that I want to read the briefing paper, because that is not a good thing to do, but I will tell members a little about what the ministry said about the Customs and Excise Act and how it currently does not allow the ministry to match data with the Customs Service for debt recovery purposes. This is not about identifying people and stopping the debt; this is about how the ministry matches data up once people have the debt, so the ministry is coming from a slightly different angle here.

I did not know this, but currently ministry staff issue individual notices manually under section 11 of the Social Security Act 1964, so it is still a very slow process. The number of notices issued by the ministry is significant. Currently it sends between 12,000 and 14,000 manual requests to the Customs Service per year. If members can just get their minds around how long it takes to process and match 12,000 to 14,000 manual requests—and to match them correctly—then they will realise that it all takes time and money. As we move forward in this process, it means that the information is often not able to be produced in an effective and timely manner, and the likelihood of debt repayment is also reduced. If somebody who owes a debt to the New Zealand Government comes into New Zealand from Australia, the manual process takes so long that the person’s 2-week holiday has come and gone before the information can be matched. The information on that person has only just been matched when he or she is on the flight back to Australia again. The ministry estimates that there are up to 20,000 people residing outside New Zealand who are no longer receiving a benefit and who owe approximately $70 million.

I take this opportunity to speak on Part 2 of this Social Assistance (Debt Prevention and Minimisation) Amendment Bill, and, as my colleague Katrina Shanks said, this part amends two specific areas: the Customs and Excise Act 1996 and the Injury Prevention, Rehabilitation, and Compensation Act 2001.

I think that the points made about the huge changes in technology are absolutely relevant. For those familiar with Schumpeter’s curve, the logarithmic increase in knowledge that is happening on a minute-by-minute basis is an example of where data matching is likely to go over the next 5 or 10 years. I did notice in the regulatory impact statement that the most significant change proposed is the amendment to the Social Security Act to override section 103(1) of the Privacy Act. It was felt that this proposal carried some risks, including the low risk of a beneficiary being incorrectly identified as being in prison. However, strategies will be put in place to minimise such impacts.

Again, I would like to make the point that Katrina Shanks made, which was that the ministry was very helpful in collating its notes in this area and in summating the Privacy Commissioner’s views on this issue. The Office of the Privacy Commissioner said that it does not oppose this proposal to override section 103 of the Privacy Act, but it notes that this section provides a basic protection of the principles of natural justice when Government agencies operate automated information-matching programmes. The regulatory impact statement went on to say that the Office of the Privacy Commissioner recognises the social policy goals behind the proposed changes, but it is concerned that an amendment that overrides this fundamental protection is proposed. The ministry is introducing measures to mitigate these adverse effects, but the Office of the Privacy Commissioner believes that these can only reduce but not eliminate adverse effects from the proposed amendment, with some individuals having their benefits unjustifiably withdrawn.

As we know, whatever the data-matching system is, there will always be fallibility associated with it, whether it is a human failing or, as we all know, whether from time to time the computer crashes. I think that every one of us is familiar with that scenario, and I am sure that this will happen from time to time with this data-matching system, but we would also hope that within the next 5 to 10 years the technology will improve significantly.

I recall Russell Fairbrother, the chairman of the Social Services Committee, talking for a moment or two about the efficiency of this Government. I will read out a little bit of a letter that I received just a couple of days ago from a young lady who said: “Back in January of this year I decided that because of certain incentives created by the Government, I would be able to come off the DPB.” She said that she had been running a small website design business on a part-time basis to make ends meet, and felt the time was ripe to pursue this full time and leave the benefit behind. She had calculated: “With a $60 a week in-work payment, the family support, the accommodation supplement, and the child support coming directly to me,”—all very complicated—“I would be in a similar position to what I was currently in, being on the DPB. I would then be able to build up the business and start to move ahead.” But then she said that this was where things started to go drastically wrong. She said: “I had decided to put my trust in a Government department, only to be treated with absolutely no regard. My financial situation was of no concern to the many people I spoke to at IRD. Sure, they spoke to me, reassured me that all was well, then sat on their backsides and did nothing.”

I think it is important and relevant that although the chairman of the select committee suggests that the Government is efficient, we are getting letters like this on a daily basis as constituent MPs. It really is worrying when the departments that are involved in this bill—the Ministry of Social Development, the Accident Compensation Corporation, and the Inland Revenue Department—are all associated with huge inefficiencies and concerns expressed by people out there, all over New Zealand.

Part 2 agreed to.

Clauses 1 and 2