Financial Review Debate — Ministry of Social Development

It is my pleasure to take a short call on the estimates for social services. I think it is appropriate that we reflect on recent events in this portfolio. For the last few months the Government has been claiming that it has made progress on key indicators. When I say “key indicators”, I do not actually mean child poverty necessarily, because the Government has chosen not to make that a Public Service target. No, child poverty has not been imbedded within the Government’s key goals for this portfolio. Instead, it has decided to pick off things like immunisation, insulation of housing, and so on.

No one is denying that they are important areas where we would like to see gains, but it would be disingenuous to suggest that any of those do anything to make a nudge, make a dent, in the core issue of child poverty itself. But even then, even though it is not a key goal of the Government to reduce child poverty, it has still made a claim—in fact, the Minister of Finance made the claim in the chair today—that that has been one of the key focuses of this Government. So says the Government that has spent probably the most substantive Government spend on tax breaks, which did not positively affect those families. That Minister still tried to claim that at the fore of his thinking was child poverty and income inadequacy. How can that be? Where have we seen a dent in child poverty figures? The reality is that we have not.

If you ask the Government what it has done on child poverty, the one thing it continues to raise is that it is focused on moving people from benefits into work. Well, that completely ignores the fact that two out of five of the children living in poverty—and that is probably likely to change based on the recalculations that are happening as we speak—are in the homes of the working poor. They are in families where the parents are fulfilling the social contract of old: if you work a 40-hour week, you can provide for your family. It is not so. It is not so under this Government.

We have a new class of working poor. The Government refuses—refuses—to address income inadequacy, and as long as it does, it will not make a dent in our child poverty statistics. In fact, we know that the statistics are actually worse than we first thought. For a long time now, we have been ashamed at the fact that we have 265,000 children living in poverty. We now know, as of a week ago, that we have 285,000 children in poverty. That is 27 percent of children in New Zealand. How do we know? Well, we know that Treasury made a mistake. It double-counted the accommodation supplement. There are more families worse off than we first thought.

But, actually, there is another devastating statistic that we have not placed enough emphasis on. There is an increase in the number of families who are living on not 60 percent of the median household income, which is the general measure we tend to use, but on 50 percent or less. That means the number of families living in severe poverty has increased from 12 percent to 14 percent. That is something that all of us should be worried about.

What is the Government’s reaction to that? Well, actually, the Government has said that even then, even though there are 20,000 more children in poverty than it first thought, it has still made good progress because it is fewer than in 2010 when we reached a ridiculous high of 300,000 children in poverty—another new statistic based on the recalculation. So, apparently, we should celebrate that we have gone from absolutely dismal ridiculous failure to shameful failure. There is nothing to celebrate in any of those statistics.

The fact remains that still not enough is being done by this Government to move away from the in-kind assistance that it has focused on and towards addressing systemic change. Everything that the Government has put out to try to step away from the fact that we have this now higher and more shameful child poverty statistic has been about Working for Families. Government members say: “Look, we’ve got Working for Families. That’s cushioned the recession.”, and, secondly, “All this does is prove that the recession was worse than we thought.” Well, I would like to challenge that. No one is doubting that the recession had an economic impact. No one is questioning that. But also, on this side of the House, our argument has been that it was in the Government’s power to do something that would actually change that, and it did not.

There are 285,000 children in this country living in poverty. That is because of this Government’s decisions. That number boggles my mind. I grew up in a city of around 45,000 people. To think that six cities’ worth of children in this country are now living without the basics offends me at a very deep level. About one in four of our children are now living in poverty. They are our children, and their poverty is our poverty. As already mentioned, two out of five of these children have parents who are working. To quote—as has been quoted many times in the last year or so in this House—the words of Nelson Mandela: “Overcoming poverty is not a task of charity; it is an act of justice. Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.”—that is, by the actions of the Government, its policies and budgets; policies and budgets that we have not seen from this Government.

This Government has chosen not to measure poverty. It has knowingly hidden the real levels of poverty from us while it happily used figures that it knew were incorrect to justify its performance. Today in this Committee it has listed off all the money it is spending on these children—these lucky children—and told us that the Salvation Army has suggested that the Government spend less on children. That is disingenuous and, frankly, offensive. This Government has taken $1.1 billion a year from all of us and given it to the top 10 percent of income earners. That is $1.1 billion a year it could have used to reduce poverty, to feed our kids and make sure that they are warm and healthy. The 285,000 children without the basics cannot be dismissed with misinformation.

Under this Government, there are 45,000 more children living in poverty than when this Government came to power. That is an entire city’s worth of children without enough. This Government has told us child poverty is a problem of the parents. Then it has told us the country cannot afford to pay family carers a legal wage. It has told us it cannot afford to extend paid parental leave. It has told the courts that rest homes should not be required to pay women equal pay for work of equal value. It has reduced the bargaining powers of workers. It has made it more difficult to get disability support. It is not informing beneficiaries of their protections and entitlements. How can parents help their children when this Government is creating barriers to the basic entitlements and undermining the ability of those in work to look after themselves and their children?

I hear from far too many sole parents that they are trying to look after their children but feel ashamed for not being in paid work. I have heard of parents having to choose between buying medication for their children and food, and worrying that if they choose food, then there may be a notification to Child, Youth and Family for neglect. That is the level of pain that this Government is responsible for, and it is not the vision of an inclusive society that this country was built on.

Children have told us directly that they really worry when their parents are stressing out about not having enough money, and school lunches are not going to solve that. Children have told us that they think that this Government is giving money to the rich people and that those rich people are spending it on things they do not need. We need to listen to the wisdom of our children. Poverty may feel inexorable to those burdened by it but the truth is that we can reduce it. It is a matter of values.

I would like to start my contribution by talking about what Miss Ardern talked about. She seemed to discount the fact that immunisation for our children is important and that home insulation is important. These are very important factors. These are the deliverables that we have delivered as a Government.

As Parliamentary Private Secretary to the Minister for Ethnic Affairs I am often meeting dignitaries from many different countries who visit our shores, and often their conversations turn to compliments about New Zealand and how New Zealand is in an enviable position with our economic outlook, even with the devastating earthquakes that Canterbury has gone through. New Zealand is, in fact, on track to deliver a surplus in 2014-15, when most other countries are in deficit. What this means is that we start to pay off our debt. What the Opposition members do not seem to understand is that when they borrow the money to pay people, whatever they actually promise, they are putting our future and the future of our children and our grandchildren in debt for a very, very long time.

More jobs have been created. Seventeen thousand fewer people were on a benefit in December 2013 compared with the year before. There are 12,000 fewer kids in benefit-dependent homes than there were in December 2012. Long-term welfare dependency is falling, and we are continuing to help families and older New Zealanders with income support. In the past year this Government helped 80,000 people off welfare and into work. Paid work is the best route out of hardship for families who are finding it difficult to make ends meet. I remember a saying that is something like this: give a man a fish and it will feed him for a day, but when you teach the man how to fish, it will feed him for a lifetime. When you just give him a handout, he may be able to feed himself and his family for a day, but when you actually teach him to work and go and find a job, he might be able to provide for himself and his family for the rest of his life.

There was an extra $900 million in the last Budget alone that was targeted for vulnerable children and their families. I am very proud of what this Government has actually provided for New Zealanders in the last 5 years of being in Government. This is a very different picture from when voters elected the National-led Government back in 2008. The worst global financial crisis had struck New Zealand, and New Zealand was already in recession. Treasury advice signalled that we would be in Budget deficits and increasing debt for a very, very long time. The debt projection was actually $150 billion and the current debt projection is around $50 billion. That is like cutting $100 billion off the debt—not million but billion. If you look at it in a family situation, imagine that a family has a $150,000 mortgage and they work really, really hard to reduce the mortgage debt down to $50,000. That difference will make a humungous difference to the family and what they can do as a family and the budget that they actually have. That is what this Government has delivered for New Zealand: $100 billion off our debt. That, I have to say, is an amazing outcome that this Government has delivered for New Zealanders.

This Government is focused on growing our economy to provide more jobs and rising incomes, to provide a positive result for New Zealand. But many families and businesses are still finding it quite difficult. I know. I have heard from even my community, from people within the ethnic communities, that often they are the ones who are, in fact, struggling because they come from other countries, often they do not speak the English language, and they find it difficult to get into careers or jobs that they were used to in their home countries. Yet they actually celebrate the fact that they are living in this country, which is very generous compared with where they come from. We provide for New Zealanders. On average, wages are increasing faster than inflation, and business confidence is at its highest level in 20 years.

Well, look, after that speech from the member Melissa Lee, I think we need to put the record straight a little. We absolutely need to put the record straight, because it was under Labour that we had the lowest unemployment rate for a very, very long time in this country. It was under Labour. Remember this: under a Labour Government we had the first or second lowest rate of unemployment in the OECD, but under this Government that has slumped to about eighth or ninth place the last time I looked. New Zealand is probably down to about 12th place now in the OECD for unemployment numbers. Why is that important? What that tells us is that every single one of those OECD countries went through the global financial crisis. Not many of them were in the privileged position that New Zealand was in because of the surpluses that the Labour Government saved up over 9 years. Over 9 years in every single year there was a surplus, and that meant that New Zealand was in a much better position than almost any other OECD country when it came to dealing with the global financial crisis and when it came to dealing with unemployment.

What has this Government done—what has it done? New Zealand has slumped in the OECD when it comes to the number and the proportion of unemployed in our society. Government members celebrate that—they celebrate that. Melissa Lee and the Hon Paula Bennett think that they have done a fabulous job. Well, if they looked at the international community and they looked at what they were given on a plate—on a plate—from the Labour Government, then they would know that they have failed. They have absolutely failed.

💬 Hon Jo Goodhew: Oh, what a mess we were given—10 years of deficits.

Jo Goodhew can yell and scream as much as she likes, but the facts speak for themselves. Go, Mrs Goodhew, and look at the OECD ratings. We were the first or second in the ratings under the Labour Government, and we have now slumped. We have now slumped. So that is the record of this Government, and no one should be confused about that.

The other record of this Government is that not only has it had a very poor track record in terms of actually bringing down the number of unemployed during the global financial crisis but it has miscalculated and made its policy decisions for the last 4 years on false figures—on false figures—from Treasury. The Treasury figures—

💬 Andrew Little: That’s right. I think it was deliberate.

—I think it is deliberate, Mr Little; I agree with that—have confused the whole picture, so that 20,000 children living in poverty were not being counted by this Government. No wonder its policies are wrong. No wonder it has not worked out that the way to address child poverty is to actually increase the financial resources of those families. That is the answer to it. Fiddling around with immunisation is not going to actually address the issue of the financial problems and the crises that those families find themselves in.

💬 Hon Jo Goodhew: Don’t you call saving lives fiddling.

Jo Goodhew may yell and scream about it, but that is still not going to get one more cent into those families where they actually need to be able to provide food, provide decent shelter, and provide the necessities of life for their children. I think it is a disgrace that we have 285,000 children in poverty in New Zealand—and the number is growing; every time Treasury revises its figures, it is growing—because this is the land of milk and honey. We are not one of those countries without resources. We are not one of those countries without the means to get by. We are a South Pacific country with everything going for it.

Well, we did have everything going for us when we had a Government that had a plan in place, a Government that cared about addressing inequality, and a Government that brought in the Working for Families package. That party opposite called it communism by stealth, but that package brought the largest number of children out of poverty that we have ever seen in recent times in this country. On this side of the Chamber we are deeply proud of that, because that is the practical way of actually addressing issues that matter to families—the real issues. They are not the trumped-up issues, not the trumped-up figures from Treasury, and not the diversion that the Government seems keen on, pointing fingers at members over on this side of the Chamber. The Government needs to actually address the very real issues that its policies are creating for everyday New Zealanders every day of the week. As for the assertion that the Government is somehow getting all this number of New Zealanders into work, it is not.

It is always interesting to listen to chardonnay socialists talking about the whole aspect of poverty, because the thing is that for all the talk, I would like to see where the action is. Mrs Moroney talked about a proud record under the Labour Government. What she forgot to do is continue to read the Salvation Army report of 2008. This is what it clearly says. This is this proud record that she talks about. It says that the social outcomes achieved over the previous 5 years, under the previous Labour-led Government, were “somewhat mixed and in some areas quite disappointing.” That is the record that that member talks about.

Chardonnay socialists talk about the issue of poverty, but my concern is that they do not know what true poverty is and how to work with a community to be able to solve those issues. The Salvation Army noted that “More of our children appear to be at risk of harm, more of our young people are engaged in petty crime, there is more violent crime and more people in our jails.” Again, that is the record that the member just talked about. The Salvation Army talked about how, overall, New Zealanders were “chronically indebted” and that “home ownership rates have fallen.” That is the Labour Government of 9 years, which was in surplus and had much to give, yet with all that it had, with as much money as it had, it still could not solve the social issues that are there.

The report continues. I know that Labour members do not like to hear it. They have gone quiet on the other side. Iain Lees-Galloway is yawning. Why? Because he does not like to hear the truth. Here is more of the truth. The report lists the billions and billions of taxpayer dollars that had been spent and yet concluded that this spending “seems to have contributed very little to [New Zealand’s] social progress.” So if you are going to use the report, if you are going to use it as a basis to found your ideals, then do read its history. Read its history. That is what it is saying.

In fact, it says that many indicators were going backwards in 2008. There were rising numbers of referrals to Child, Youth and Family and more children in Child, Youth and Family care. There was rising youth offending. For all the talk and all the rhetoric, Labour members are just a bunch of chardonnay socialists talking about things but not getting on with action. This is a Government and a Minister for Social Development who are getting on with the action.

Let us talk about rheumatic fever prevention: $21.3 million—that is the figure. I was honoured to be with the honourable Minister of Health, Tony Ryall. We were at Finlayson Park School—the largest primary school in the whole of New Zealand, predominantly Māori and Pacific children—with the 800 kids who are there. We launched the Rheumatic Fever Prevention Programme. Parents came along. This is not just about talk; this is about action. That is what this Government is actually about.

Let us talk about early childhood education, its expansion, and the targeted approach. There is $172 million in total early childhood education investment. We know that it is really important to deal not only with the health issues when we talk about poverty. What about the educational needs of our children? There are a number of our children who need to be engaged. Do you want to know what the percentage of early childhood education engagement and participation was under the Labour Government of 9 years? It was 65 percent—65 percent. If you want to talk about what is shameful, that is shameful. What is it under the National-led Government, a Government of action? It is 88 percent—that is what we have got—and climbing. So we are seeing the investment in our children as absolutely important as well. There are 700 more children in high need—with $9.3 million announced from current funding, from the Targeted Assistance for Participation Fund that is there.

Let us talk about kin carers and grandparents raising grandchildren.

💬 Phil Twyford: Come and stand in Te Atatū.

There is $35 million of additional funding, Mr Twyford. There is financial help and a reference group to decide how best to spend this. Let us talk about what is needed for the kids, Mr Twyford. You can have all the talk and the rhetoric and it is all just talk. He is another chardonnay socialist who grew up in Ponsonby and somehow managed to go to the peninsula. But when we talk about what happened to the children over those 9 years, there is nothing—nothing. That is what happened, OK?

Let us talk about what we are doing. Microfinancing—the Government is exploring with banks and NGOs alternatives to loan sharks for low-income earners. You see, we know where the risks are and we are actually doing pragmatic and practical things to address them. What about housing insulation? More bedrooms, more homes, more land supply, warrants of fitness, $100 million to expand home insulation targeted at low-income families—you see, I am just going to keep going right the way through. You are going to love this. Why? Because it is not just rhetoric and it is not just “chardonnayism”—

💬 Dr Rajen Prasad: Chardonnayism!

—it is action that is actually happening on the ground. I know that Mr Prasad loves to hear this: 3,000 new State house bedrooms, 500 new homes, a warrant of fitness trial to start with Housing New Zealand homes. We know that the issue around having affordable housing and accessible housing is absolutely critically important to our families as well.

I just want to thank the speakers who have sat down. What they have pointed out is something that is really important. Is it not interesting, though, that what we have not had from the Labour members is a discussion on welfare? This is supposedly Labour’s hot topic. This is supposedly where it holds the Government to account. It is supposedly our weakness. The reality is that we have 17,000 fewer New Zealanders on benefits today than we did 12 months ago. Do you know how many children that is? That is 12,000 fewer children living in benefit-dependent households.

Do you know what this Government’s legacy is? It is nearly $500 million more spent on support for welfare. That means 354 more front-line staff who are working with people. That means that where we used to see around 10,000 people face to face, we now see more than 100,000 people face to face. That means we call them in and we talk to them about what they can do, not what they cannot. We talk about the training that will support them into jobs. We then put real money behind them, which then sees them going into jobs.

What we see is that more than 8,000 sole parents have themselves gone into work. What I hear from those sole parents who come up to me is: “I have to admit, I never thought I would be thanking you, but that was the first time someone asked me what I wanted to do, what I could do, and what support I needed for that to actually happen.” That means real support like aiding people to get a driver’s licence. It means helping them with their CVs. And, yes, it means helping them gain confidence, because more often than not, if you have been out of work for a long time, if you live in a family that has not worked, then actually having that confidence to put yourself out there is huge. The difference between this National Government and what you have heard from the Opposition tonight is that we celebrate their success. We believe in them and their capabilities. With the right support at the right time, they can make a difference in their lives.

So we talk about poverty, and we certainly have the Opposition raising it as their sort of topic. What the Opposition does not talk about, because they might be dirty words, are parental responsibilities and families actually stepping in and helping each other, and the fact that it takes a community and, yes, it takes Government support as well. Actually, that sort of backing without putting the right support in—throwing money at them and hoping—was what we saw in the 2000s, and it did not make a difference to those people who needed it most. It is hard, complex work that needs wraparound support to lead people to independence. That is the difference for families that are struggling in New Zealand.

We do that through the Children’s Action Plan, because we see some our most vulnerable children not able to access the kinds of services and help that they need—and it is not all about Government; more often it is more about how they can help themselves. More often than not it is role modelling that shows them there is a different way in life. More often than not it is access to that health care that they need and access to education for their children.

While we are at it, we will talk about education, because without a doubt getting those children into early childhood education and seeing them stay in school longer will hold the biggest difference. We have seen a huge reduction—a 30 percent reduction—in teen pregnancies and teen births in this country. That is something to celebrate. I myself go around every teen parent unit I can and meet every teen parent I can. Do you know what the best thing is, I think, about being a teen mum, and I was one myself? It is that you get to love your children longer. If you have them earlier, you actually get to have them for a bit longer and you get to love them a bit longer.

But you know what those girls can do? They sit in front of me and I say to them “So, why are you here? Why are you in education?”, and they will go “Oh, because you told us we had to, because we couldn’t get the benefit without it, because we’ve got to create a better future for ourselves.” Every single determinant, every research you look at, and every evaluation report will tell you how we know those children will do well. The one determinant that will make the biggest difference for those kids is their mums. Their mother’s educational achievement, whether they have got work experience, and how solid their relationship is are the best things we can do for those kids. So what are we going to do? More than $40 million is going into childcare so that that mum can be in some form of education. We actually set some responsibilities for them. We expect them to be in education if they want a benefit. We expect them to do budgeting courses. We expect them to do parenting courses. And we are making a difference.

Report noted.

Ministry of Foreign Affairs and Trade

Report noted.

Department of Corrections