Financial Review Debate — Ministry of Social Development

When we look at the financial review for 2009-10 of the Ministry of Social Development, we need to see it in the context of comments made by the Minister of Finance in December 2008. At that time, having just come into Government, Bill English said: “I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook. In New Zealand we have room to respond. This is the rainy day the Government is saving up for.”

The reason why I raise that is that in this House over the last financial year, we have consistently heard the Minister of Finance refer to the dreadful position that the Government inherited when it came to office. It does not quite add up. I raise this issue because it is germane to what is happening in social development. If this Government wanted to make a priority in social development, particularly for children, it had every ability to do so because the finances of this country were in a reasonable position to face the global recession that this country and other countries faced. Other countries have got through it; we now face a double-dip recession. We in Labour say to the Government that it is a recession of its own making. What it means is that those who are the most vulnerable and who need the most help in New Zealand are the ones who face the biggest problems and the biggest cuts. Under this Minister in the chair, the Minister for Social Development and Employment, very little has been done to help children in New Zealand.

What is depressing and distressing for me is that I have constantly asked the Minister for Social Development and Employment what she has done for the children who face abuse and lack of care in this country. Her only answer has been the same: “Every day I work so hard for them.” But every day more children are abused in New Zealand. Every day more children are neglected in New Zealand. Every day we hear of things that are happening in this country to our children that no notice has been taken of, except in pretty speeches and crafty answers to questions asked in Parliament.

I say to the Minister that if she does not want to believe Opposition members when they talk about children, maybe she would like to listen to those who provided a report for this financial year—the Salvation Army, for example, which released a report called Stalled. What does the Salvation Army talk about in that report? It says that there has been very little meaningful social progress in New Zealand, and that there are now greater problems of unaffordable housing, alcohol-fuelled family violence, child poverty, and youth disaffection. The report also found that over the last 12 months, to September 2010, average weekly earnings grew by just 0.5 percent when adjusted for inflation, or in real terms. The low-income household consumer price index developed by the Salvation Army has found that the cost of living has gone up by 4 percent. So the lowest-paid people in New Zealand, including beneficiaries and older people, have seen their cost of living go up although their income has not risen. Those people are facing considerable difficulties.

The report went on to point out that under this Minister there has been an increase of 40,000 more young people who are out of work. We now have about 60,000 young people under the age of 25 who are not in work, who are not in training, and who at this stage feel they have no hope. That is what the Salvation Army pointed out.

If the Minister still does not want to believe what I am saying, then perhaps she will believe what the Salvation Army is saying on child poverty. You see, the Salvation Army is at the pointy edge of social service delivery. It is there every day, out in the community, providing services. It is all very well for the Government to praise the Salvation Army when it is on the streets and helping people when there is an earthquake, but I ask why the Government does not listen to the Salvation Army when it is telling this Government that child poverty rates in New Zealand have increased over the last 18 months, particularly in single-parent families.

I will follow on from my colleague the Hon Annette King. The work of the Ministry of Social Development and of the Minister in the chair, the Minister for Social Development and Employment, is meant to be about successful individuals building strong, healthy families and communities, but in these areas New Zealand is going backwards. We are becoming a more unfair society; we are becoming a worse place to bring up our children. The sad fact is that the Government is out of touch with the reality facing most New Zealanders, particularly low and middle income New Zealanders.

I will tell members some stories about people, because this portfolio in particular is about people. These people have come to either my Panmure office or my Onehunga office. We see these people as a consequence of the policies that are reported on in this financial review. There was the mother of three who lost her job. She did not get any redundancy, and she had a medium level of debt, so she was reduced to seeking handouts of food in order to get by. She made sure her children were fed before she ate anything herself. Once a certain number of food parcels have been accessed, the overwhelmed agencies handling these cases cannot give out more. Her situation was not about poor life choices, as our Prime Minister would have us believe.

There was the man on the sickness benefit who was reduced to eating out of rubbish bins because his household goods and his wallet had been stolen. His debt, which he had subsequently run up through replacing fridges, beds, etc., was with Work and Income and two local appliance stores. The debt was too high for him to get any more advances, and the repayments for the money borrowed from three sources took up most of his benefit after his rent was paid. He has mental health issues and his diet is so poor that he has been hospitalised twice because of it. These are real people.

Then there was the man who thought that he would actually be better off in prison because at least in prison he would get something to eat. We have mothers coming into my offices who are living in tin sheds. We have had three in 1 month, including one with a severely ill baby. These are real people.

I could go on about housing issues, but perhaps it goes past this portfolio, so I will not continue down that track. But I am saying that this Government is out of touch with the reality of these New Zealanders. It does not have a plan to deal with them. In fact, the best plan it seems to have come up with is giving the wealthy tax cuts costing $14 billion over 4 years, building roads, cutting money out of industry training, and cutting funding for early childhood education. That is not a plan, and that mismanagement of our economy is taking us backwards.

That so-called plan is leaving many New Zealanders feeling helpless and hopeless. This is contrary to the idea of social development. We need a bold Government that governs for the benefit of all New Zealanders and understands the realities that they are facing. We do not need a Prime Minister who talks about these people making lifestyle choices. We certainly do not need Kate Wilkinson and Hekia Parata, who think that New Zealand women who are underpaid and struggling to make ends meet should be grateful that there is a National Government supposedly focused on lifting economic performance. That is not what those women out there are feeling.

The fact is that economic progress and social progress are inextricably linked. A plan that really addresses social and economic development will come only from a Labour Government focused on creating jobs and opportunities for our children and grandchildren. It is about the question of unemployment. We now have 100,000 more people on benefits. Where is the plan to deal with that? Where is the active Government working to try to create a stronger economy that delivers jobs? Where is the support for research and development? Where is the support for skills? Where are the initiatives to lift productivity?

Talking about the issue of skills, how is it that we can have something so significant that would lift our productivity and increase employment security, yet we cut funding out of that area? We cut $55 million out of industry training. It did not go into social development to pay for more job skills, did it? No. That is an absolute outrage in the current economic climate.

As my colleague Annette King said, the situation of child poverty in this country—and the Salvation Army report talks about this—is that 22 percent of our children are living in workless households where they are below the poverty line. That fact impacts on the future of this country in terms of health, education, and our economic performance, let alone the situation—

I will start by thanking all those involved in this process, particularly all of those hard-working officials who have worked so hard to present the review process. I will talk about what the scope of that is. Being the Minister of Social Development and Employment means that I am responsible for a spend of over $21 billion, more than 30 percent of all Government spending. Quite frankly, it is going to those people who need it most—about 1.6 million New Zealanders in any year.

I start by acknowledging the Ministry of Social Development’s most recent work in the Christchurch earthquake. I am sure that other Ministers would disagree with me on this, but I believe that my department has been exemplary and is one of the star performers. It moved in quickly. It moved in for those people who were, firstly, surviving, but the situation was also about that saying that “They move to living from surviving.” I think that is a reality for so many people in Christchurch.

I will run through a few quick facts, because that is what this review is all about. The helpline has received 125,615 incoming calls. It is extraordinary that staff have stepped up and been there to answer those calls, and to provide some pretty amazing help. They have identified 18,500 senior clients who were living alone. We have over a thousand staff in the Canterbury region. We have redeployed about 200 staff from across the Ministry of Social Development into Canterbury, so that some of those staff can get a bit of time off. Three Work and Income sites are closed but the other eight are open. We now have 10 recovery and assistance centres. We have 10 information kiosks open. Child, Youth and Family has reopened in another building.

Members know the facts. They would have heard them in the House today in relation to the amount of money involved; $160 million has been paid out in employer assistance and under job-loss cover for employees. Civil defence payments have now totalled over 80,000 payments, and about $14 million has been paid out. The work that is done behind those payments is fantastic. It is one thing for a Minister to stand up and say what is going on, but to be honest people out there have been working 24/7 to make this a reality for those people in Christchurch. I take this opportunity to commend them.

💬 Hon Nathan Guy: That’s fantastic.

💬 Darien Fenton: They’re backroom staff.

They are. They are pretty amazing staff. I say thank you to both sides of the Chamber for acknowledging that.

What has the Ministry of Social Development done, though? Let us talk briefly about that department and what has been going on. The Value-for-Money programme has resulted in a total of $254 million in savings and efficiency gains across the business. In addition to managing the cost pressures of that, the ministry has returned $52 million to the Crown in the last 2 years. That has happened through a number of strategies, but most of it has been about moving most of our services online. A lot of seniors are now going online, as well, and students are using the online services more than ever. In fact, there has been a 60 percent increase in volumes dealt with by the business.

Lean Six Sigma has been rolled out throughout Work and Income. That has made a huge difference in how we move people to the front line. We have reduced the amount of waiting time for beneficiaries who go in to get assistance. I think that is pretty remarkable in these pretty difficult times. Shared services have been a big part of that, as well—that is, working across other agencies, reprioritising resources, lowering operating costs, reducing client numbers, and making sure we get that front-line help. We are at a point now where for the first time last week I saw that for people who come in to go on a benefit and then go away, we were at an over 50 percent triage rate for them. I want to give one of those facts because we deal with a lot of stuff in this Chamber, but when it comes to the Opposition we are not often talking about the actual facts of the situation.

In the last 2 years 136,000 people have cancelled their benefits to go into a job. That does not mean that it has all been fantastic and easy, but it does tell us that the labour market is still moving. The biggest concern, certainly from my perspective, would be if it had stopped moving. People are still moving out of benefits and—most importantly—into work, and those sorts of numbers prove it.

I will end on the issue of children, child abuse, and neglect. I think that the work done there has been such a key focus, certainly for me as Minister. I do not have time to go through all the things, from the Never, Ever Shake a Baby campaign to having social workers now in all hospitals, the first response trial, the multi-disciplinary meetings before discharging a child from hospital—re-abuse has been a major concern to me—and better data and monitoring systems. Quite frankly, we cannot fix it unless we are monitoring it. Thank you.

May I say how delighted I am to take a call immediately after the Minister for Social Development and Employment. I do want to—

💬 Chris Hipkins: Brown-noser.

I will ignore that comment, I say to Mr Hipkins. I acknowledge the fact that I doubt whether in Mr Hipkins’ lifetime any Minister has ever held this office in more difficult times. I acknowledge the huge compassion, determination, focus, and commitment that she is bringing to the role. She has—

💬 Stuart Nash: Every Labour Government that takes over from a National Government holds it in more difficult times.

Every National Government, I say to Mr Nash, takes over from a Labour Government that has mucked up the economy, and then has to spend the next 5 to 10 years sorting it out. Never has that been truer than at this moment. When that happens it puts particular pressure on the Minister of Social Development and Employment. I return to my theme, but I acknowledge the Minister for the huge job she is doing in incredibly difficult times.

As a member of the Social Services Committee I am very proud to stand up and focus for a moment during this discussion on the financial reviews of this Government department. Some people listening to this debate may not appreciate that this department is the largest Government department in New Zealand. It has huge responsibilities, which come under particular pressure at times of global economic crises of the type we are suffering at the moment. It is worth noting that its responsibilities include employment and income support services; New Zealand superannuation, a huge area of Government expenditure and commitment; the provision of student loans and allowances; the care and protection of at-risk children and young people, which the Minister just alluded to; youth justice; adoption services; New Zealand’s international welfare portability arrangements; the coordination of social support services; and the funding of community service providers.

That is an overwhelming workload. There is plenty to talk about in this discussion. There is plenty of great work—it has to be said—that is being done right now in a host of challenging areas. That is why I have to say I was really disappointed to hear the deputy leader of the Labour Party in her reference to the comments that the Minister of Finance made after our election in 2008 when he made a comment about the uncertainty of the current economic outlook, questioning our determination to make this an area of priority. I do not think that any impartial, reasonable observer would say other than that we have made this an area of huge priority. There have been a number of really important initiatives led by this excellent Minister, Paula Bennett, and I think by a Government that is absolutely determined on trying to—

💬 Hon Shane Jones: Name one.

I am happy to name Job Ops. I am happy to name the Community Max scheme, I say to Mr Jones—

💬 Hon Shane Jones: Labour policy.

That is absolute nonsense and Mr Jones knows that they are not. There are a whole range of initiatives. I do not question for a moment the fact that these are always important areas for a Government, but the really significant thing is that under this Minister and this Government they have been thrown so sharply into focus and have received such determined and coordinated—[Interruption]—application and, as the Minister Hekia Parata has kindly mentioned, are showing that we have the real determination to make some difference to them.

There is no question that we are living in incredibly difficult times. No one disputes the fact that unemployment has risen in recent times—of course it has in this country, as it has around the world. What is really important is what we are doing about it. I am pleased to say that under the leadership of this Minister and under the leadership of the department that she is the head of, we are seeing a really determined focus on reducing unemployment. Even though we are living through some of the most difficult times of all, there is a clear focus on reducing unemployment, and evidence that the policy is working. There is a clear focus on getting people off welfare dependency, and there is very definite evidence that it is working.

It is not because, as the Labour Party would like to suggest, we are either hard-hearted or insensitive to the needs of people—quite the opposite. It is because we are determined to help people out of the trap of welfare dependency. It is because on this side of the House we will never say: “That’s good enough for you.” We are always determined to say to the very hardest hit in an economic recession: “There is better hope. We are ambitious for you; you can be aspirational, and we will put in place measures to assist you to get there.” I am pleased to say that there are a whole host of measures that are achieving just that. Unfortunately, as we have seen—and I do want to acknowledge the huge suffering that Cantabrians have undergone—the Christchurch earthquake has further knocked us back in recent times. Mr Jones challenged me a minute ago to name some schemes, and I mentioned Job Ops and Community Max. Let me also mention Future Focus. We have to focus particularly on those long-term recipients of unemployment benefits, and say that we will get them off that scheme.

Report noted.

Department of Labour