Financial Review Debate — Ministry of Social Development

I just want to thank those involved in the financial review of the Ministry of Social Development, including my parliamentary colleague Jacinda Ardern, and others seeking the call here today. I want to commend the report that has been put to the House. That report details explicitly the range and the scope of the services that the Ministry of Social Development undertakes. The breadth and depth of the services are quite remarkable.

We all know that the ministry deals with the care and protection of vulnerable children. It deals with income support, superannuation services, funding to community service providers, social policy and advice to our Government, and student allowances and loans. It administers well over $21 billion—yes, that is $21 billion—a year, easily the largest Government spend, and one-third of all Government expenditure. The running costs of the ministry are around $1 billion a year. It has over 300 sites scattered across our nation, and 9,300 staff are committed to the effective implementation of programmes and distribution of services.

The revenue is approximately $1.2 billion, and the expenditure of the ministry was $1.198 billion; so, as with this Government, this particular Government department is operating within its means. It is operating a $5.9 million surplus. The Social Services Committee noted that the Office of the Auditor-General gave the ministry a “very good” rating for its management control environment, as well as “good” ratings for its financial services and service performance information and associated systems.

One of the real tests for the ministry in the last financial year was how it responded to the earthquakes in Canterbury, and I will quote the committee’s report: “this was a very good indication of the capability of the organisation, its adaptability and its willingness to cope with a crisis, and its ability to respond to change, which will be important as welfare reform is implemented.” It set up welfare centres. It provided extra staff. It flew in and drove in 800 extra staff from around the country. It ran the Government’s helpline. As people were calling in, asking and pleading for help during this crisis, the ministry and its employees and its agents stepped up to the mark and assisted over 50,000 Cantabrians. It also distributed $10 million through various non-governmental organisations that responded to the crisis in Canterbury.

The committee also commended the ministry for seeking capability improvements through the use of technology. It is working hard to share better information, and this will be demonstrated in the new welfare reforms. Information sharing is a critical part of our welfare reforms. It is working with the Ministry of Education—and I know that the Minister is here today—working between the ministries to deliver services to our young people in particular. An example of this demonstration of the uptake of technology is shown in the Value-for-Money programme. For example, Child, Youth and Family social workers are currently trialling iPads and the global positioning system feature, which improves the security of staff who are out on the front line, who are distributing those front-line services.

Our committee also looked at Future Focus, and noted the overall decline of beneficiary numbers. The committee noted that youth unemployment had fallen by 4,000, and, since that report, the March benefit figures show that more than 5,000 people who were on the unemployment benefit around New Zealand went off welfare and into work just last month. I just want to repeat that for Miss Ardern: 5,000 young people who were on the unemployment benefit around New Zealand went off welfare and into work last month. That is commendable to the Minister for Social Development. It is certainly commendable to the Ministry of Social Development.

Sometimes I wonder whether or not Mr Lotu-Iiga and I sit on the same committee, the Social Services Committee, and hear the same pieces of information and reports from the community. It is clear to me that a zero Budget is what you get when you fail, and in the social development field we see the repercussions of a failed economic plan—or no plan, indeed.

Although I absolutely acknowledge the hard work that those who work in the social development field, particularly Ministry of Social Development staff and Child, Youth and Family staff, put into their jobs and their roles, they are doing it under increasing pressure. One of the things we saw in the briefing to the incoming Minister from this department was the clear message that something has got to give. The ministry is asking its staff to do more, with less. The demands on them are increasing, not decreasing. Something has got to give, and I ask the Minister for Social Development what that thing is. What is that thing that is going to give? Already I am seeing an increasing number of cases coming across my desk of Work and Income staff absolutely stretched, treating clients poorly as a result, and people finding it very difficult to get the support they need. Although Mr Lotu-Iiga may claim that as a success, there is actually an increasing number of cases of people who are going unsupported and in dire need, but I will return to that.

Of course there are major issues in this portfolio. It is one of the most significant that any Minister could hold, not just because of sheer budget but because of the impact on people’s lives, and no more so than in the area, for instance, of employment, or unemployment as the case may be. The reason we continually refer back to the measure of those not in employment, education, or training is the unemployment benefit statistics do not pick up young people who are not eligible for benefits. So that is why we continually come back to the figure of 83,000 young people not in employment, education, or training.

What has the Minister’s response been to deal with those young people? It has been to say: “Let’s focus just on the 16 and 17-year-olds. We are going to spend $13 million just targeting 16 and 17-year-olds.” What I say to that Minister is that you are now saying we will get less, and spend the same amount, because currently we spend $13 million, and we cater for 16 to 20-year-olds. The Government is now cutting out almost 60 percent of the young people that Youth Transition Services deals with in New Zealand, and is instead funding them on a bonus payment cycle, essentially incentivising the people who are tendering to work only with the easy young people—not the hardest, not the most at risk, but the easy wins. It is a failed policy. We have seen it before in the UK. It failed. Why are we repeating those same mistakes again?

I move more broadly to the Government’s other response to the current situation. Just to remind Mr Lotu-Iiga, we have seen 67,197 more people on a main benefit now than in 2008. We have seen an increase in main benefit rates, and why is that?

💬 Hon Hekia Parata: Recession.

Quite simply, it is the economy. Of course the economy has had an impact. I see that the Minister in the chair, the Minister of Education, has acknowledged that the economy has had an impact. Why, then, is the Government’s reform focused solely on some kind of idea that there has been this dramatic change in attitude to work? There has not been, yet its reforms are focused on this conception that people do not want to work. They do want to work. That is why we see queues of people lining up for a handful of jobs at supermarkets. They are desperate to be in work.

And also that is why, in 2006, 20 percent of lone, sole parents had declared earnings—20 percent of DPB parents were in part-time work in 2006. What is the figure now? Well, the Minister has put in place part of her Future Focus reforms. She has started work testing people earlier. And how many are in part-time work? Sixteen percent. It has decreased since she has ramped up her reforms. And why? Because of the economic environment. If you want to fix welfare, fix the economy. She claims that 30,000 people have come off the DPB. Well, 32,000 have gone on. And why? Because these are people working in low-wage jobs, in the service economy. It is fragile work and it is insecure work. Fix the economy is my message to the Government, and then you will genuinely help these people.

The biggest issue, though, is poverty—270,000 children living in poverty. Three out of five of them are in the homes of people reliant on Government support; two out of five, then, are in working poor families. The Government’s response is to set up a ministerial committee. I see no result from that, and I see no real action from this Government.

I would like to speak today in support of the concept of an investment approach to welfare, but at a Government and a societal level rather than an individual level. The proposed welfare reforms from this Government are missing both the big picture and the individual detail. They are trying to present the welfare reforms as new and innovative—an actuarial approach to welfare and an investment approach. But when you drill down and look at the language and the shape of the reforms, in fact, it becomes quite clear that there is not much new in this approach.

Today I would like to focus on just one small aspect of the reforms, but a key one: work testing, which started with the Future Focus reforms and is now being extended. It is work testing for women on the DPB. I would like to draw attention to the problem of domestic violence in this country. The nature of domestic violence, which we know affects one in three women in this country, means that its female victims are often unable to work, to work in their preferred career, or to stay in a job long term. International studies have shown that victims of domestic violence have 15 percent more chance of being jobless and 55 percent more chance of being on a benefit. International research indicates that over a third and up to half of women on the DPB are likely to be in or, more important, escaping violent relationships—up to a half of the women on the domestic purposes benefit leaving violent relationships.

To institute mandatory work-preparedness requirements and to pressure women leaving these violent relationships to go into work flies in the face of generations of work in this country to enable women to leave these violent relationships. Admittedly, Future Focus does have a work-test exemption for women leaving violent relationships, and I assume that this will be in place in the new reforms. But for me this actually heightens my concern with the reforms, because it is being used as an excuse: “Don’t worry, we’ve got an exemption.” And yet this exemption is not being accessed. When I asked the Ministry of Social Development officials about why such low levels were reported in the ministry’s statistics, they noted that staff do not ask. They noted that women may not want to disclose, which is my point exactly. These reforms do not protect women. One of the dynamics of abuse is that victims often blame themselves, and that makes disclosing difficult. If we are serious about bringing down the rates of family violence in this country and getting women off the DPB, then we need to make it as easy as possible for women and children to leave and stay away. Otherwise, we are damning women for staying, and damning them for leaving. When the Government talks about the decline of the numbers of women on the DPB, that is actually something we should be afraid of.

We need to invest in the structural issues that lead people to need welfare. We need to invest in respectful relationship education, strengthening our response to family violence, and helping women to leave and get into sustained employment. Reducing family violence and creating jobs will get women off the DPB.

In 1996 economist Suzanne Snively estimated that the costs of domestic violence in New Zealand then were between $1.2 billion and $5.8 billion a year. More recent research in Australia estimates that there it is $8.1 billion a year in costs. I say to this Government that if you are serious about an economic strategy to bring us into the future, address the fundamentals; do not blame the victim.

I am delighted to pick up on exactly the point that Ms Logie has just finished on, because I can assure her that this Government is not blaming the victim, at all. But we are absolutely, passionately determined to sort out the problem—the very real problem that this country has had for far too long—of long-term welfare dependency. That is not a question of beneficiary bashing or attacking that person; it is about saying that we are going to put some support structures around them, and we are going to intervene in ways that are going to be effective.

That is what Future Focus is all about, and that is what the reform bill that is before the House at the moment—the Social Security (Youth Support and Work Focus) Amendment Bill—is all about. It was very interesting during the adjournment that we have just had to be on the Social Services Committee, which heard some of the submissions from people on that bill. I have to say that some made some points that, naturally, we have taken note of, but quite a number showed that they do not really understand this point, or they are so ideologically blinded by their party affiliation that they refuse to look at the fact that welfare dependency is an absolute scourge on this society. Long-term welfare dependency causes huge suffering in communities, particularly the communities that are most deprived in our country. I would have thought that they would cheer and welcome strongly the Government’s initiatives to do something about that. The wraparound services that we are putting around our young people are long overdue. I am very proud to be a part of a Government that is addressing that problem.

While Ms Ardern was speaking before Ms Logie she made the extraordinary comment that we should fix the economy. Well, as Mr Hayes replied at the time, that is exactly what this Government has spent the best part of 3½ years doing. Why? Because the Labour Government made such a hash of things. The Labour Government has to take responsibility for the position we find ourselves in. Let us not for a moment allow the spin doctors on the other side of the House to fool anybody into thinking that it is somehow a creation of this Government. At a time when the Dutch Government has collapsed, the Irish are in trouble, the Portuguese are in trouble, and Greece is in deep trouble, what we see around the world is a huge problem with global recession, and this is a Government that is really focused with a terrific plan to do something about it—and the results are clear.

That is why we have taken tough decisions. That is why we are so determined to balance the books. That is why we will get the country back into surplus. And when we get this country back into surplus, following on from the 9 years of ineptitude by Mr Goff and his colleagues, then we will have choices to be able to do the things that the whole country wants. But in the meantime, while we are getting there, we can intervene for those who are troubled by this long-term welfare dependency.

The Ministry of Social Development is ably led by the Hon Paula Bennett, and, gee, she deserves a pat on the back for the fantastic job that she is doing. This particular focus of our Government is one of the most important things that the whole country is firmly behind. I made the point when I was speaking on the reform bill that I believe that it is one of the most important challenges facing not only this particular Parliament but also this particular generation of politicians. There are not many issues more important than this that we will face during whatever time we are given to serve in this House.

I am absolutely 100 percent behind the welfare reform bill to ensure that we can help young people, particularly, from going down the path of long-term welfare dependency, because all the evidence tells us that if they drop out of school without qualifications and they go on to a benefit at the age of 18 or even younger, within several years they will still be on it. That cannot be acceptable. I am amazed that there is a single member of this House who is happy that that is the case.

I am absolutely proud of the fact that we on this side of the House are determined to change that. And change it we will, because by giving incentives for going on a budgeting course, doing a parenting course, learning all of those life skills that are so vital for a young person—[Interruption] Mr Twyford scoffs at that. You do not want young people to know how to budget? It is unbelievable that Mr Twyford would take that position, and he shakes his head. Mr Twyford does not want young people to learn how to budget. Does he not want young people to know how to parent? What could be more important than being able to look after a child, to raise a baby to become a healthy young person? I believe that that is an absolutely vital skill, and we cannot just expect it to be something that is understood instinctively. In many cases it has to be taught, and so we will, and we are putting in place incentives. That is not knocking; that is not discriminating.

Report noted.

Ministry of Agriculture and Forestry

💬 Steffan Browning: Mr Chair, I would like—