Social Security (Fraud Measures and Debt Recovery) Amendment Bill

I move, That the Social Security (Fraud Measures and Debt Recovery) Amendment Bill be now read a third time. As the House considers our final vote on this bill, I would like to ask members to turn their minds to the principles at the heart of this particular bill and to think for a moment about what it is that this bill is trying to achieve. To my mind, it can be summed up in one word. It is about fairness. Welfare fraud is inherently unfair. Once someone takes money from the welfare system that they are not entitled to, no one really wins. It is not fair on the taxpayers, who fund the system. They give from their pay cheques money they have earned in order to allow our Government and society to function. Often I have found those most vocal and most angry about welfare fraud to be people on lower wages, people who—[Interruption]

The ASSISTANT SPEAKER (H V Ross Robertson): Order! I am sorry to interrupt the honourable member. I am sure members know why I am standing. Would you please show some courtesy to the Minister trying to address the business of the House.

Thank you, Mr Assistant Speaker. Often I have found those most vocal and most angry about welfare fraud to be people on lower wages, people who themselves have to work hard to make ends meet but do so without resorting to ripping off the State. It is not fair on them to have the funds they have provided taken by fraud, and it is not fair on other beneficiaries. Over the last couple of years we have had just above 300,000 people on a benefit at any given time. In the year ended June 2013 only 906 were convicted of welfare fraud. So we talking about only a small minority who seem to think that they can rip off the welfare system, yet those few allow some people to cast aspersions on all beneficiaries—an opportunity that some people are, unfortunately, all too eager to take, and that is not fair.

At an individual level, relationship welfare fraud, the type of fraud this bill’s main measure is aimed at, is rife with unfairness. The irrefutable fact of this type of welfare fraud, unlike other kinds of fraud I can think of, is that it can occur only with two people as the perpetrators. The essence of the fraud is a beneficiary receiving a benefit that depends on them being single when they are actually in a relationship. If that partner was not there, the fraud could not occur.

Let us step through a hypothetical example of how this happens. Most commonly we are dealing with a woman on a sole parent support benefit, the new DPB. She has entered a relationship, which is absolutely fine. You do not give up your right to a love life when you come on to a benefit. Communities are founded on strong relationships. Individuals and families prosper in good relationships, and so we should encourage them. Later, that relationship turns more serious. It moves from something casual into something that, for all intents and purposes, looks like a marriage. They become emotionally and financially interdependent.

It is at this point, whether they sign on the dotted line or not, that her circumstances have changed. She is receiving money based on the fact that she is a single mother, but she is no longer single. Again, for the vast majority of beneficiaries, at this point they have a conversation with their case worker at the Ministry of Social Development and their entitlement can be changed, yet some choose not to. Time passes, the relationship continues, and then 5 years later it comes to our attention that she has been receiving money she was not entitled to. An investigation is carried out. The ministry establishes that she has received $100,000 she was not entitled to, and she has repeatedly signed forms reasserting that she is single, despite that being untrue. A prosecution is commenced. It is here that our bill will make a difference.

Under the law as it stands, the beneficiary faces the law alone. She is liable for the entire $100,000 of debt. She alone faces criminal sanctions—in the worst cases, including jail—and he walks away. That is the nub of the unfairness that this bill will address. He has spent 5 years living alongside her, participating in her fraud—a fraud that could not have occurred but for him—and he gets away scot-free. That is unfair—pure and simple. Unlike other examples of fraud that may be quoted, he has not simply benefited from the fraud; he has been inextricably a part of it. Under this bill he will be held liable for his part in the fraud, because that is fair. It is fair on the beneficiary, who will not have to take the blame herself for the actions of two, and it is fair on the taxpayer, who has been defrauded and will now see their money recovered faster.

To turn to another part of the bill, it is also worth remembering that welfare fraud is not fair on those who depend financially on the fraudster. That fraud forces us to make a choice—to require the repayment of that money, even if it will disadvantage those who are financially dependent on the beneficiary, or to let them get away with their fraud. This bill reaffirms and clarifies the position that all money taken from the taxpayer should be recovered. That recovery should be done sensitively and carefully to ensure that no one is placed in undue hardship, but it should occur.

Through the debate on these measures, both in this House and publicly, some have said or implied that we should not recover debt at all, in a multitude of situations. They would see fraudsters escape unpunished, and the taxpayers’ loss remain, by adopting the most cautious and precautionary approaches. Although I recognise that it is an opinion that they hold sincerely, it is not one this Government subscribes to. Instead, we place our faith in the skill and professionalism of our welfare fraud investigators to work with those who owe money, and to recover it quickly and appropriately. It is a stance that I believe is right, and I will quite happily and confidently place it before the people of New Zealand. That is the essence of this bill—fairness. I invite those parties that intend to vote against the bill to consider that before casting their votes. Whatever they think of this Government’s policies around other types of fraud or other issues of social welfare, are they willing to record their vote against such a simple and such a fair change?

Before I finish I would like to acknowledge those who have contributed to this bill. I would like to acknowledge members across the House who have engaged with me on this subject. It has been a robust debate. There are areas where we disagree, but I appreciate the generally constructive and open way members from all parties have engaged on this bill.

I want to acknowledge the officials from the Ministry of Social Development who have assisted me to develop, and will go on to implement, this bill. It has been my pleasure to work with them on this and on this Government’s wider fraud reform package. I have found them, without fail, to be a group who exemplify the highest standards of professionalism in the Public Service. So I want to record my thanks for their past and ongoing service. This bill will put right a wrong, and make our system a little bit fairer. I commend it to the House.

If the Social Security (Fraud Measures and Debt Recovery) Amendment Bill were all about fairness, then we would be talking about addressing tax fraud at the same level that this Government is prepared to deal with some of the most vulnerable people in our society by taking these measures against benefit fraud. But I want to say at the outset that the Labour Party is supporting this bill because there is one small element of fairness. I am going to come to that in a minute.

In the context of this Government’s relentless beating up on people who do not have paid employment at the moment, at the very time that this Government is doing nothing to ensure there are jobs for people to have, here we are, sitting in a period of time when in New Zealand we have hit high levels of unemployment—high levels of unemployment. The Government has sat on its hands and done nothing. We heard at question time today that Christchurch has been rebuilt primarily by immigrant labour, by people from overseas, while New Zealanders sit in the dole queue because that Government did nothing in the 3 years that it had to plan to train New Zealanders to be the people who rebuilt Christchurch. That is an indictment on this Government.

What has it been doing? Instead of actually doing sensible things, as Labour asked it to do within months of the earthquakes striking Christchurch—like training people as builders, training people in the construction industry, and putting its energy where a good Government would if it were thinking about the plight of the people—it has been tinkering around with bills like this. It has been tinkering around with trying to get the New Zealand public to think that every beneficiary is committing welfare fraud. This is what it has been spending its time and energy on: whipping the people who have actually lost jobs. That Government has done nothing to help them to get other jobs. The Government has done nothing. It thinks the market is just going to deliver. It is a hands-off Government that says “Too bad.” Yes, we have struck hard economic times. People are losing their jobs, and this is the Government’s answer to that: working on bills like this that are designed to have fair-minded New Zealanders think that beneficiaries deliberately lose their jobs in order to rip the system off somehow.

I want to make it absolutely clear that in the minority of situations where people do set out to rip off the New Zealand taxpayer and commit welfare fraud deliberately, the Labour Party has no truck with that—absolutely no truck with that. We will stand and vote for bills like this where they actually address those issues. But we would much rather—and a Labour Government would—put energy into ensuring that people were trained to do the jobs that are available. That is the crime that this Government has committed, because it has completely washed its hands of that. We are going to be facing the remarkable situation in New Zealand of actually having skills shortages—skills shortages in quite a number of areas—along with high unemployment. That is an absolute indictment on this Government not doing its job. It has failed those thousands of New Zealanders who have ended up on the scrap heap while this Government has been in place.

It is not all its fault. I am going to recognise that there has been a global financial crisis, but the job of a Government during a global financial crisis is to do everything it can to help the people who are going to be most hurt in our country by that global financial crisis. So what did Government members do? They said “Let’s deal to them about welfare fraud.” That is their big answer, and it works for them. Did you notice that the Minister for Social Development, Paula Bennett, decided last week or 2 weeks ago that she would try to get New Zealanders to think that beneficiaries by and large spend their time living the Club Med life overseas—

💬 Hon Chester Borrows: No, only 21,000 of them.

Well, Chester Borrows says “Only 21,000 of them.” Mr Borrows, how many of those 21,000 travelled internationally because they had given up hope of finding a job in New Zealand? How many of them, Minister?

💬 Hon Paula Bennett: 4,800.

No, no, that is not right. Can the Minister tell the House how many people of those 21,000 left these shores and have not returned?

💬 Hon Paula Bennett: 4,880.

No, that is not the figure. I have seen the Minister use that figure, and it is not correct. It is not correct. Why is the Government trying to whip up this idea of people committing benefit fraud or, if they are not doing that, living the Club Med life—living the Club Med life overseas? It is completely irrelevant and it shows how out of touch the Government is with the situation that many New Zealanders find themselves in through no fault of their own—through no fault of their own. No thanks to that Government’s members either, because they have sat on their hands. They have sat on their hands and said “Well, look, the market’s going to deliver, so the Government doesn’t need to do anything.” Well, guess what. That is not working.

In the region I come from, the Waikato region, unemployment is going up. In the last quarter, unemployment in the Waikato went up from 6.1 percent to 6.8 percent. It is heading in the wrong direction, Ministers. It is heading in the wrong direction, and that is supposed to be the rock star economy. That is the Government’s rock star economy. Well, I can tell you that ordinary New Zealanders will tell you how rock star it feels—and it don’t feel too rock star at all for many of them. The people who are subject to this bill are the people at the bottom of the heap. They are at the bottom of the heap, and often through no fault of their own.

I will, though, just say for context that the reason the Labour members became convinced during the Social Services Committee hearing to support this bill is that we did have representations from many women’s organisations when they came before the select committee. They told us they had witnessed and were concerned about situations in which women—mainly—who were sole parents were put in a position by their partners of committing welfare fraud. They felt that it was unfair that it was the woman alone, when the partner was complicit in it as well, who actually suffered the consequences of being discovered to be fraudulent in that way.

Relationship fraud actually accounts for about $20 million a year—$20 million a year. It is not great, and it pales in comparison with Inland Revenue Department estimates that tax discrepancies amount to over $1.2 billion a year. It is $1.2 billion versus $20 million, but this is where the Government is spending its time. However, we have said in the Labour Party that in this situation we do not want to see the women bearing the brunt of something that, actually, two people have been complicit in. We do accept that this sliver of a bill may help to address that issue. We sincerely hope it does, so we are prepared to support it.

We want to see the Government be fair and deal with the big fraud issues in this country, and they are clearly to do with tax discrepancies and tax fraud. This bill is small fish. It is small fish, but the Government has put its emphasis here because it wants to distract from its appalling record of not creating jobs, not creating training opportunities, and not doing the things that a good Government would do to ensure that we did not end up, as we have now, in the ridiculous situation of having a skills gap in New Zealand while thousands sit on the scrap heap, in the dole queue, because that Government has not seen fit to help them seek the right training for the right skills.

The Government has not even had a training and skills strategy in place. Christchurch is the absolute epitome of that. It absolutely shows a Government that has been looking the other way, trying to create all sorts of smokescreens and distractions to distract from its very poor performance in this area. I think that New Zealanders are appalled when they learn that Christchurch is largely being rebuilt by overseas labour. It is not because they are higher-skilled technicians whom we could not possibly train here in New Zealand; they are labourers, they are truckies, and they are people who are doing jobs that New Zealanders could be doing if the Government had got off its collective butt and trained people in the construction industry.

The construction industry, the building industry, tells us that, right now, while thousands sit on the scrap heap, in the dole queue, it is short of 5,000 apprentices. That is right now. That is 5,000 people who, if that Government had been doing its job, could have been in apprenticeships right now. I tell you that under a Labour Government, they would have been in those apprenticeships. Labour was prepared to invest money in actually increasing opportunities for apprentices to be taken on. Labour supports this bill, but it is a sad indictment on the performance of that Government when it comes to dealing with unemployment.

Ahn nyung ha se yo, Mr Assistant Speaker. I would like to start off my third reading contribution on the Social Security (Fraud Measures and Debt Recovery) Amendment Bill by saying that if the sad record that Ms Moroney talks about is, in fact, the reduction in percentage of people going off the welfare benefit—15,000 people—because they have possibly found jobs and they no longer depend on the benefit, I would actually like to take that on as a compliment. If she thinks that 15,000 people last year going off welfare is a terrible record, I do not know what she would call a good record. On that score, I would like to congratulate the Minister for Social Development because that is a fantastic record. Fifteen thousand people going off welfare means that 17,000 children are no longer living in a welfare-dependent home in that last year, and that is a fantastic record.

If you listen to Sue Moroney, you would think that this Government is not doing anything about tax fraud. Well, that is untrue, because the Inland Revenue Department equivalent budget, which it is spending to tackle tax fraud, is $138 million. That is about five times the amount that the Ministry of Social Development is spending on welfare fraud. So it is doing something about it.

This bill is about relationship fraud. Relationship fraud last year cost this country $26 million. As Sue Moroney also agreed, two people were complicit in the fraud’s creation and they should both be responsible. This is about being fair. If two people are living together in a marriage-like arrangement and one is collecting a sole parent support benefit, then there is clearly a fraud being committed, and this bill makes spouses and partners jointly liable for debt where they knowingly benefit or where they should have known they were benefiting from the benefits. This is a simple bill. It is about making things fair, and I think all New Zealanders will say that this is a fair bill and everyone will support it. I commend it to the House.

Talofa lava, Mr Assistant Speaker. Thank you for the opportunity. I listened to the Associate Minister for Social Development the Hon Chester Borrows in his opening statements to this particular debate on the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. I like the Associate Minister. I appreciate the fact that we did have an opportunity to sit down and listen to his views on why he is driving this particular bill. Sadly, I think he is being deceived by his Government. He has made statements in this House that I do not believe and do not accept. You see, when National first came into power, New Zealanders will recollect some of the many promises that this Government made—promises that we now know many of which have not been kept. People may remember, for example, the promise not to raise GST and the promise to create 170,000 jobs—not kept.

But there are a couple of statements that refer to this bill that I want the House to ponder on. The two particular statements were made by the Prime Minister in his prime ministerial statement when he first came into Government in 2008. The first statement was the promise that he would behave in a mana-enhancing manner. The second statement was the promise to protect New Zealand’s most vulnerable communities. Both of those promises have not been kept. Evidence of that is in this bill here before the House. This is one bill amongst many, many others that are contrary to and that contradict those very statements that the Prime Minister made when he first set foot in this House as the Prime Minister of New Zealand. In fact, this bill, along with many other bills before it, actually compounds the suffering and worsens the situation for the very vulnerable communities that the Prime Minister promised he would protect.

In fact, if we go back a ways and reflect on our welfare system, our welfare system was to provide a safety net for the very vulnerable communities that the Prime Minister spoke about in 2008 and said that he was going to protect. Our welfare system was intended to provide a safety net for the majority of New Zealanders who were not born into wealth or who were not fortunate enough to have $50 million in their bank account because they were able to win that through betting on the international foreign exchange markets. Our welfare system was intended to protect people and to give effect to some of the very basic human rights enshrined in international covenants—rights such as a job; rights such as access to fair, decent wages to support workers and their families; and the right to be protected from unemployment. That is what our welfare system is all about.

This bill is deliberately aimed at driving fear into the hearts and minds of the most vulnerable in our communities. It is designed to drive fear into the hearts and minds of the most vulnerable people in our communities, the people who rely on our welfare system because of unemployment, because of sickness, or because a spouse left another spouse with children. For various reasons, that is what the welfare system was about, and this Government, since it has been in power—since 2008—has deliberately and determinedly tried to remove that welfare system, and slowly, step by step and a bit at a time, that is what it has done.

We heard earlier today in question time that the Minister for Social Development prided herself on the fact that fewer and fewer people are now in our welfare system. Sure, it is a good thing, but here is another fact: less than 50 percent of those people are in jobs—less than 50 percent of those people coming out of the welfare system are in jobs. What is their situation, Mr Assistant Speaker Robertson? I can tell you. I know many of these families in our neck of the woods—and no doubt my colleagues and other MPs in this House will also know these families—who are doing it tough because they are not in jobs and they fear going into that welfare office to try to get some support from our State. What is happening? They are reliant on church and community organisations providing them with food parcels. They are reliant on young sons and daughters who have been forced to go to Australia, earn a bit of money there through the jobs that are available there, and send it back here. They are putting pressure on their own relatives by sharing homes. Mr Assistant Speaker Robertson, you know what I am talking about when I ask whether any of our members have seen four or five families sharing a three-bedroom house. I doubt very much whether any of the MPs on that side of the House understand the plight that many ordinary New Zealanders are experiencing today.

So this bill is not about fairness, as the Minister attempted to try to persuade us earlier. This is not about fairness. As my colleague Sue Moroney rightly said, if this was about fairness, the Government would spend the same amount of energy and time trying to track down tax fraud—the $6 billion amount of money that the Inland Revenue Department has reported goes missing as a result of tax fraud. Here the Government is, leaving that $6 billion ticket alone. It is owed by people, no doubt, who are close to this Government, as we have seen in the last few weeks. But it is putting the full force of this Government on to a group of people—the Associate Minister himself even admitted that it was a small number of people whom we are talking about. Yet it is putting the full force, the full weight, of this Government to go after this small group of people whom we are talking about. That is not about fairness; that is about driving fear into the hearts and minds of the most vulnerable in our communities so that they stay away from the welfare system.

The fundamental reason why the Government would do that is that this Government, through and through, does not believe in a welfare State. It does not believe in the role of the State—period. So I get quite upset when it talks about fairness, because that does not translate in so far as the communities that I represent; that you represent, Mr Assistant Speaker; and that many of our people here represent are wanting to hear from this Government. It does not translate to the many promises that this Government has made. Only in 2011 it promised a brighter future. This kind of legislation does not provide the brighter future that our communities want from the Government.

This is a bad Government. This is the worst Government that I have ever seen or experienced. It makes promises like it is giving candy away to kids. In 2008 it promised my community, using some of our sports icons, that it would invest $6 million into one of our local schools. In 2008 it made that promise. Today we are still waiting for it to keep that promise. This is the worst Government, and I know that working-class communities the length and breadth of New Zealand cannot wait to see the back end of this Government because it is taking New Zealand in a direction where only its friends benefit but the rest of New Zealand does not.

Last night I was at Malaeola hall, and we had a performance by the Ta’imua Malaeola Youth group—young people, young Catholics, from all over the Auckland region. About 600 were in attendance. They put on a performance, and it was an Easter performance, based on the story of Easter. They will contribute the earnings from that performance to the Auckland City Mission. Why? Because those young Catholics who vote know that this Government is making things worse for not just Pacific communities and not just Māori communities but the bulk of working-class communities throughout New Zealand. That is why our communities have looked upon this Government and the promises it made in 2008, and I can tell you that this bill is a terrible piece of legislation that is being added on to the many other pieces of legislation that are designed to drive fear and to worsen the struggles of ordinary working New Zealanders. I hope, come 20 September, that our communities turn out in full force and kick those members out of Government.

Tēnā koe, Mr Assistant Speaker. It is with sadness that I rise again to oppose another ill-conceived piece of welfare legislation that is passing through this House. The Green Party opposes the Social Security (Fraud Measures and Debt Recovery) Amendment Bill without apology or prevarication. This bill essentially does three things: it creates new fraud offences, it makes the partner liable for fraud debt, and it requires the Crown to recover debt and reduces its discretion on how—this is the point that we find most offensive.

Before anyone on that side of the House starts to yell that the Greens are soft on fraud or crime, or any other rubbish like that, I would like to remind the House that we already have a rigorous fraud detection and prosecution system in this country. This bill is just adding extra offences and penalties that are even tougher than in other related laws, with no evidence that it will have any deterrent effect on fraud, because that does not necessarily have anything to do with the drivers of welfare fraud. The Greens take stewardship of our collective resources very seriously. That is why we want to use our resources in a way that will most effectively deliver our goal of a New Zealand where everyone has the essentials so that we can guarantee the opportunities.

We are working for a social security system that provides everyone with enough income to fully participate in their communities and to live safe, healthy lives. This would be what a real investment approach would look like, and it would save us money in the long run. We support policies that are sufficient to ensure this, simple to understand and access, universal in their application, and equitable within a wider social context. We oppose this bill as it is not consistent with these values or this vision. We believe that this bill will further stigmatise the most marginalised people in this country and put more barriers in the way of people trying to get out of poverty, without making any tangible difference in relation to serious, intentional fraud.

However, there is an aspect of this bill where I believe the intention is positive, and where we share the concern of submitters and others in this House. We do acknowledge that the current system of reclaiming the entire debt from the beneficiary—usually the woman—when the partner has also benefited from that money directly or indirectly is unjust. We are also concerned that, currently, violent partners are regularly using the threat of informing on a woman as a tool of abuse. This is easy for them because the consequences currently fall entirely on the woman holding the benefit. However, we would like to see developed a policy or legislative response to this problem, based on the experiences of those women and those beneficiaries who have been affected, and that also involves Women’s Refuge, to ensure that we have an approach that is fair and safe. This law has not been developed on that basis, and there is concern that it may actually have the reverse effect.

I would really like to mention that in his opening speech the Associate Minister for Social Development Chester Borrows spoke about the point where somebody goes from being able to be in a relationship with somebody and receive a benefit like the DPB to the point where the relationship moves over into being one that they need to report. I would like to ask anyone in this House how they know when it has reached that point. The law defines the point where you no longer can be on the DPB as when you are in a relationship in the nature of marriage. That is defined quite specifically by our courts as a relationship where—let me just find that in my notes—there is financial and emotional commitment, and where you are willing to pay the other person’s bills.

I have never been in a relationship where that relationship has got to a point where I have gone: “Now, has my commitment reached a level where I am willing to pay their bills?”. That has never happened to me, and yet we are talking about giving people criminal convictions for not identifying that point and reporting it to an agency. The supposed point of fairness in this bill is based around that expectation. It is unrealistic. That has very, very real-life consequences for people in our communities. I just do not think that is good law. I do not think it is fair.

The Green Party also shares the New Zealand Law Society’s concern regarding joint and several liability, which means that both parties will be liable for the whole debt should both parties be accountable for the debt arising from the fraud. The New Zealand Law Society believes this may lead to unfair or disproportionate outcomes. In its view, liability should be shared on the basis of attribution of benefits as per the Criminal Proceeds (Recovery) Act 2009. This has been dismissed as a policy, in part due to the cost or potential increase in reviews and appeals. The Green Party believes it is essential that our laws are fair, proportionate, and open to appeal. To decide on a legislative pathway to reduce the possibility of people appealing is not founded on a strong concept of justice.

This bill also creates an offence for partners to knowingly or recklessly benefit from fraud committed by their partner, which is punishable by a fine of up to $5,000 or a 12-month imprisonment. The Greens do not believe this is necessary and that attributing criminal liability on the basis of determinations of relationship status is—as I have already outlined—incredibly problematic and may well create perverse results, and that is being kind.

The aspect of the bill that we find the most difficult, actually, is the change in this bill that requires the Ministry of Social Development to recover debt. I need to make sure that this House and New Zealand are aware that we are not talking about fraud here. We are talking about advances that people have had to get because the benefit levels were consciously set below the poverty line and they were not enough for people to survive on. We know that people on basic benefits cannot afford well-balanced diets and that they cannot afford to heat their houses or to stop themselves or their children getting sick. Most of them cannot afford new clothing for their children, cannot afford to replace shoes when they get holes in them, cannot afford to repair their bikes or cars if they break down, and cannot even, where I live in Porirua, afford the bus or the train from Porirua into Wellington. They certainly cannot afford sports fees or club fees or being able to get admissions into places of education within our city—

💬 Mike Sabin: So that justifies fraud, does it?

We are not talking about fraud, Mr Sabin. This is debt, where benefits are set so low that people have to get advances, which they have to pay back, to be able to put food on the table and to be able to put their power on through winter. I have even heard of people being refused advances to buy blankets to try to have a cheaper option to keep themselves and their children warm. The heart of the problem with this bill is that it does not acknowledge the fact that we are putting people into poverty, which is harming them and their children. This bill is seeking to take money out of the pockets of those very people who are just trying to provide the very essentials of life, and that is unconscionable.

I rise in support of the Social Security (Fraud Measures and Debt Recovery) Amendment Bill, having considered it with colleagues at the Social Services Committee for a considerable period. Welfare will always be there to support the people in our community who need it, and we have made that assurance. During the global recession, this party—the National Party—in Government, along with our partners, made sure that there were not cuts to benefits and that there were not widespread cuts to superannuation, as the Labour Party is proposing now in its policy leading up to the election. We made sure that the most vulnerable were looked after. But part of our comprehensive reform of the welfare system is clamping down on welfare fraud.

I thank Su’a William Sio for acknowledging that the Associate Minister for Social Development Chester Borrows offered that briefing to him and Sue Moroney. William Sio attended that briefing with the Minister. The Minister acknowledges that Sue Moroney did put in her apologies because she wanted, or needed, to go and watch the Melbourne Cup. So she did not come to that briefing, but William Sio went in her stead while she was at the Melbourne Cup, and he listened to the Minister. Those two had a conversation. They agreed on many points, as he acknowledged; they disagreed on some. But the reality is that while we provide welfare in this country for the vast majority who do need it, we do not accept that welfare fraud should occur, and that is the message that Sue Moroney would have got had she attended that meeting. She too—had she attended that meeting—would be supporting this bill, as I am.

Talofa lava. Malo le soifua. I rise on behalf of the New Zealand First Party, our wonderful party, to speak to the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. This bill seeks to amend the Social Security Act 1964. The aim is to strengthen measures to combat relationship fraud, which is a very specific kind of benefit fraud. The bill considers relationship fraud to have occurred when a person who is living in a de facto, marital, or civil union relationship claims a single or sole parent rate of benefit to which they are not entitled. The Government’s proposals in the bill are designed to strengthen the approach to relationship fraud—in particular, by ensuring that both parties in a relationship are appropriately held to account. The Ministry of Social Development’s chief executive would be empowered and required to recover debt from partners and spouses of beneficiaries who obtain welfare payments fraudulently. It will make them jointly accountable for repaying the debt in certain circumstances. Criminal liability will also be extended to the partners of beneficiaries who commit relationship fraud.

The interesting situation right now in our country is that there are so many different kinds of relationships. In addition to the traditional married couple, we now have de facto relationships, single parent relationships, and same-sex or civil union relationships. There are also family relationships through guardians, and more. I am sure that those who are now watching these speeches in the House would know which category they come under.

The Social Services Committee examined this bill and recommended that it be passed with some amendments. The intention of the bill will be achieved if the amendments are given serious consideration. The Social Services Committee wanted the bill to be clearer about the criteria for liability on the part of a beneficiary’s spouse or partner who, knowingly or otherwise, benefits from an amount obtained by fraud. It is funny that I have always wondered how some single parents can travel to various places for nice holidays with their families. They drive some fancy, flash cars and wear some very nice clothes. They also wear some expensive shoes and dine in some pretty good restaurants. Yet they do not work full-time and are single parents.

I have worked all my life, ever since I left school—at a car assembly factory making car harnesses and in warehouse stores packing electronic goods for dispatch. I have worked at a merchandising warehouse and retail shop selling clothes for men—that includes ties, jumpers, shirts, and more. I have also worked in a prison site, operating its Wanganui computers—for those who remember them from back in the mid-1980s. I have also worked in the Ministry of Justice through its public registries—for example, the Registrar-General of Births, Deaths and Marriages, and more. I have worked in alcohol and drug services, the University of Auckland School of Medicine, the National Heart Foundation, Auckland City Council, and later the Department of Corrections. And I must say, I was still broke and unable to drive a reasonable car like theirs—clean, reliable vehicles—until many years later. Yet the single parents were having better access to better resources than I was. I do not smoke, nor am I able to operate many pokie machines.

Melissa Lee earlier on today made a mockery of the National Government’s poor efforts to recover the $6 billion worth of tax evasion—a pathetic attempt. It would be better if she did not even go there. This legislation attempts to make accountable those who have been able to access benefits that they are not entitled to. To be liable, the spouse or partner must know or have been reckless as to whether the amount obtained is in excess of what the beneficiary is entitled to and that it has been fraudulently obtained.

The initial bill was not clear on whether the spouse or partner would also have to know the exact amount involved or the precise way in which it was obtained. In terms of debt recovery, it was recommended that the Ministry of Social Development’s chief executive should have more scope when determining the rate and method of debt recovery. It was not enough that the chief executive’s role would, rather, be limited to considering only factors set out in the ministerial direction. That was not enough. This recommendation was based on the general public law principle that decision makers must take all relevant considerations into account.

Among other proposed amendments to the debt recovery aspect of the bill, the Social Services Committee has sought to ensure that it more accurately reflects the policy intent to collect fraudulently accrued debt, at the same time also ensuring that the circumstances of the person owing money have been fully considered. It is expected that these measures will address concerns about the impact of debt recovery on individuals and their families. This is very important because we must acknowledge the risk of making families worse off by using unreasonable force. In making them pay back debts they have accrued, it is absolutely critical that we take the right approach. The provisions of this legislation must be enforced responsibly—responsibly.

We must also remember that the vast majority of beneficiaries are honest people who do the right thing. Relationships are never simple or straightforward, especially nowadays. According to Statistics New Zealand there is a growing proportion of New Zealanders living together without legalising or formalising their union. Reports from 2009 show that one-third of New Zealand marriages ended in divorce, which is a very sad affair. Māori women have been shown to be more likely to be part of de facto relationships than non-Māori women. It is crucial to be mindful of the possible circumstances that beneficiaries may be in when they are caught in fraudulent situations.

I was reading a nice message from a friend who was having some issues with his work colleague. He said: “To be extremely happy but extremely intelligent is a task of being optimistic without being cheesy.” This legislation must avoid any attempt to encourage fraud. We all know that fraud is the daughter of greed. Let us hope that the Social Security (Fraud Measures and Debt Recovery) Amendment Bill will bring justice to the way we live. Thank you.

The Hon Paula Bennett has just tweeted that there are nearly 60,000 fewer people on a benefit than there were in December of 2010—60,000 fewer people on a benefit since December 2010. The National Party’s policy on welfare is working. At the same time, the unemployment rate has fallen in this country. It is down to 6 percent now, and I would have a pretty damn good bet that it will be down into the 5 percent range at the next announcement. I am proud of that reform package.

Once again, today, with the Social Security (Fraud Measures and Debt Recovery) Amendment Bill, we deliver on another commitment that we made at the last election, when we committed to clamping down on welfare fraud. We are delivering on an election promise. Can I acknowledge and congratulate Minister Chester Borrows, his outstanding officials, and the Social Services Committee for their hard work in this process. Once again, it is excellent to be delivering on an election promise. Thank you.

I am pleased to take my final call on the Social Security (Fraud Measures and Debt Recovery) Amendment Bill, which started some time ago. Certainly, the debate we have had over the various stages of this bill, and even today, does get one to think about a whole series of things related to the subject of this bill, which really is, as the Government likes to call it, welfare fraud.

What it gets me to do is to ask a number of questions, the first being: which is most important, solving the real problems facing New Zealand today—and we could identify those problems we hear every day in this House about housing shortages and the difficulties of housing—or creating well-paying jobs? Is that another issue we ought to be focusing on? Or is it more important to be talking about how we might increase the size of manufacturing, other than in the primary sector? Or is it more important to talk about the effects of climate change on New Zealand, and the changes that are already occurring? Is it perhaps more important to talk about a better start for our young children and their parents? Another issue could be developing a better-educated workforce.

Is it more important to take that series of issues, talk about them, and put some real effort into making those kinds of changes, or is it more important to be devising a scheme, as this bill does, to go after those who are—in the words of this bill and in the words of Government members—defrauding the State of $20 million, through a set of prescriptions this bill provides us that, in the end, may or may not be successful, and that are more than likely to produce unintended consequences in the lives of those affected? Which is more important—to go after this relatively small amount of money or to address those other major factors, which are what this House should be debating? But, no, what this Government has been doing over the last 5½ years is devising, from time to time, a whole series of programmes to really vilify particular sets of groups in our society. I would go even further. For me, doing the former is much more important, and doing less of what we are doing now would also be important.

I say that because there are as many steps as we care to take within the present system that could work effectively without this bill at all. This bill is not necessary. Work and Income could work far more effectively with these families to ensure that fraud does not take place and that where it does take place, the money is recouped by its everyday interactions with these families. It does that regularly and it does that in many different ways. But, no, the Government chooses this particular approach because somehow it taps into a vein that runs through New Zealand society. There is no leadership in tapping into that vein.

I think that the Associate Minister for Social Development Chester Borrows himself actually gave a very good answer when, in the second reading of this particular bill, he tried to debunk the figures that this side had been talking about in terms of the size of the fraud that this group is alleged to have perpetrated and the size of the amount of money that has been recovered from this particular group compared with the dollar value of fraud that takes place in the taxation system. Our argument has always been: where is the fairness? Where is the equality? How can we compare these two particular areas? One is a powerful group; one is a vulnerable group.

What he began to say was that, in fact, no, the Government actually does quite a bit to go and recoup money from those who are tax-dodgers and those who have tax debt. He said it does that and it is very, very successful. He said: “Obviously, as listeners would have heard, the assertion has been made time and time again that the Government is more interested in chasing after welfare debt than tax debt.” Then he went on to say that “The energy put into recovering tax debt and the money put into recovering tax debt is well in excess—in fact, it is nearly five times as much—of what we are spending on welfare fraud.” So what the Minister was saying to us, and what I read in his comments, was that the Government and the Inland Revenue Department have been successful in quietly working through the tax system to recover debt.

Have we seen, in the time of this Government, a sustained attack on tax debt or tax fraud? Have we seen that? No, we have not. There has not been one. Have we seen as much as we have heard from the Government about welfare fraud—have we seen as much about those who are alleged to have engaged in tax fraud? We have not. No new legislation has been proposed by this Government to reduce the number of tax-dodgers or tax fraud. There has been no campaign against those who are in that particular sector. If the Minister is to be believed, the Inland Revenue Department is quietly going about its business, identifying who these people are, and, in fact, prosecuting some of them as well.

The prosecution also is very interesting, because in the tax area jail sentences have been given to those who have defrauded $800,000 plus. In the welfare fraud area, it is $67,000. So there is another set of standards being applied by this Government to really tap into that vein that runs through New Zealand society against welfare fraud, or welfare in itself. There is something disingenuous about this Government’s approach to welfare. Ever since it has come into power, it has produced a whole series of terms, a whole series of language, and a whole series of legislation that, in fact, in the end, will produce nothing.

But I want to talk about another aspect of this bill that is as worrying, and that is to do with relationships. Here we have people—men and women—who for whatever reason have found themselves on their own with children. Because they have to provide for those children, they have called on our State welfare to provide them with support, and we as taxpayers do that quite gladly because you never know whose turn it is next or who might need the kind of support and the kind of safety net we provide. The belief there is that here is a group of people living in luxury and just simply taking from the State without giving anything back. The work they do bringing up children and bringing up the workers of tomorrow is never factored in.

Much more seriously, here are individuals who are bringing up children, and they will, from time to time, form an attraction to somebody. Some kind of relationship develops. The way this bill is crafted, it appears as if it provides for anybody who sees a beneficiary, and a sole parent in particular, form a relationship, no matter what type it is—all the chattering classes will begin talking. This will be seen as an opportunity to report and complain even more to Work and Income to say that fraud is taking place. So for a relatively small amount of money, we will begin to affect the everyday lives of a very vulnerable group of people.

The Government members do not care about that, but, in fact, this is quite serious. Even those people who are bringing up children on the parental benefit—how do they feel about forming relationships with others, not knowing at what point it turns into anything serious but knowing that at any time it could be seen as fraud and then prosecution will start? That begins to develop a nasty approach by the State to them and allows others to malign this group even further. We have seen the National Party do that in the past. I remember Ōrewa too and those speeches that were given at the time, because there is something that this Government does not like about those who are dependent on the State. But if somebody from business demands from the State, it is fine, it is OK, and it does that. I think that is rather unfair and something that this side of the House will want to address.

On this particular occasion we are supporting the bill because we do not want to be seen to be in any way supporting fraud of any kind, but there is an inherent weakness and flaw in this bill. Thank you.

Thank you for the opportunity to stand and support the third reading of the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. My belief is that we should have a welfare system for the people who need it. The welfare system is supported by the hard-working people who pay tax, and we should not allow people to abuse the system. This bill tries to address that issue.

I think the Government has been working hard to provide for people who are not in the workforce, to help them to get into the workforce, but they should not be fraudulently abusing the system. I think this bill addresses that issue, and I commend this bill to the House.

I understand that the next call is a split call.

💬 Poto Williams: Yes, it is.

The ASSISTANT SPEAKER (Lindsay Tisch): Poto Williams—5 minutes.

It is my pleasure to stand and speak on this bill, the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. I have had the opportunity to speak previously, and I thank you for that. I would like to wish you a joyous and happy Easter celebration too, Mr Assistant Speaker.

Firstly, I want to say that Labour supports this bill. I just want to refer to what my colleague Dr Prasad has said. We support it. We have huge reservations, but we support it because we believe—and we have reiterated this many times—that people who commit fraud and commit crime should actually receive the full weight of the law and be punished for it. So we expect people who commit crimes to also do the time as appropriate, and that is why we support it.

However, beneficiaries, it seems, are easy targets. There is a populist belief that by virtue of being a beneficiary, you must actually be without merit. When there are people who are down on their luck and who no matter how hard they try cannot get paid work, we actually tend to kick them in the guts. I do not think that that is particularly fair. All the effort and work that go in to chasing welfare fraud when there are billions of dollars—yes, billions—not collected via the tax system that could be put back in to support those most vulnerable by building our economy, increasing jobs, and paying people what they are worth. Because, let us face it, if you have enough money and resources to support your family, that is what you do. But, no, this Government chooses to distract the New Zealand public with bills like this to convince them that it is actually doing some work, so that, hopefully, the stories about the ineptitude of its Ministers slide under the carpet. I bet that this Government is happy that we are coming into an adjournment period.

Relationship fraud costs us $20 million—criminalising people acting under duress or under the direction of others. Victoria University, a very credible university, says that tax evasion is 150 times more likely than benefit fraud—150 times more likely than benefit fraud. That is because in this country we have a really lax attitude to paying our fair share. When we are earning the big bucks, we would rather keep that money than pay our fair share. We want to hang on to it all. For some people it is a game, it is a joke. I say that that is disgraceful.

This Government wants to squeeze money from already disadvantaged people. There is a part of this bill that talks about collecting from partners who have benefited or may reasonably have known they have benefited from the proceeds of benefit fraud. I have spoken at length about the impact of family violence on our communities. Here I say that there is a very real danger that we will try to extract money from people who are already in extraordinarily unsafe situations by the very nature of their relationships, and that they will find themselves experiencing the full weight of the law.

I also just want to refer back to the member from across the House who talked about the 60,000 people who have come off benefits. Well, I want to give you another figure: 285,000 children living in poverty—285,000 children living in poverty. It is shameful that we cannot do more to address that problem while chasing $20 million, and while there are billions of dollars in tax fraud waiting to be collected.

I just want to summarise by saying that my views on this bill have always been clear. It is not a great piece of legislation. Rather than providing fairness, it is basically unfair and overextends the Government’s reach into the complex lives of our families. Thank you.

Tēnā koe, Mr Assistant Speaker. Tēnā koutou e te Whare. I am very glad to have a chance to oppose the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. It is a proud moment because the Green Party will not support bad law. No matter how much we do not like fraud by anybody, we are not prepared to put our name against a bill that we know has got some incredibly bad provisions in it, particularly around debt recovery.

I would like to start with a little saying that occurred to my colleagues: not all taxpayers are hard-working, but all beneficiaries pay tax. So let us lay the demon to rest about the bludgers and recognise that, actually, people at all levels of life can commit fraud and people at all levels of life can do good things. The majority of people are morally interested in being part of society. The hardest thing about being a beneficiary is dealing with the moral exclusion and the judgment, and I have heard much of it in the House already today. The assumption is that they are probably fraudsters and they are probably ripping us off.

The powers under the Social Security Act are already extensive, and there has always been a benefit fraud unit. I have had the dubious pleasure of being exposed to its practices, not all of them accurate. I would like to talk about some of them because the provisions of this bill are quite disturbing. As a beneficiary advocate, I had firsthand experience of just how many people, some of whom could not read or write, were very confused by Work and Income. If you ring up the Work and Income hotline and ask whether you are in debt, the people cannot tell you, or they will say “You owe us $1,000.” If you ring the next day they might say “Oh, no, we owe you $400.” This happens to people in my family on a regular basis. The Work and Income people cannot with any reliable accuracy tell a person whether they are in debt or whether fraud may have been committed by their partner. So how is it that we are creating a bill that will make people fraudsters when the department does not know, on a daily basis, whether they are or not, because of policy changes, because of staff changes, and because of an inability to give clear information to beneficiaries?

Who is going to suffer from that confusion? Beneficiaries are. So one day they are a fraudster; the next day the department is in debt to them, and they are trying to figure out what to do. It is very interesting. Then some cases get chosen to be carried through as fraud. Certainly, some of those processes have proven to be ugly and badly done.

The Green Party does acknowledge that the Associate Minister for Social Development Chester Borrows had good intent in trying to hold the partners of beneficiaries, when fraud has been committed, to shared account. We understand his intent, but, unfortunately, it is a lot more complicated and nuanced than this bill makes it out to be. The definition of being in a relationship, as Jan Logie so eloquently described, is a lot more complicated. So we do not have the luxury of saying that it is a simple matter of just making everybody accountable. We cannot even get the accounts from the department. Let us get real about that.

The clause that we are really appalled by is clause 9, which amends section 86 of the Social Security Act by imposing a new obligation on the Ministry of Social Development to take “all reasonably practicable steps to recover a debt”. I thought that that was just for fraud debt, but Jan has explained, from the Social Services Committee’s perspective, that it is not; it is for all debt. If you talk to most people on benefits, at some time they have at some level been in debt to the department because they have run out of food or money. That is not happening because they are bad, lazy bludgers on the State but because they cannot live on the amount of money they get.

Christchurch, where rents have gone up or doubled, is a classic case. People cannot pay for food and power as well as rent. They have to make choices, so they go along to Work and Income and say “Can I have an advance for food?”. They are allowed only a certain number, and then they are in debt to the department. What does this mean? What will happen in terms of “all reasonably practicable steps to recover a debt”?

My other favourite—I have not got much time to speak on this; I wish I had a long time because it is important—which no one else has mentioned, is that this bill will introduce a new system for working with people who have been dishonest with the Ministry of Social Development in the past. I am really keen on a new system that will do something more important. What about people to whom Work and Income has been dishonest in the past? As somebody on the East Coast who had to force the department to tell people their full entitlement—and it took 5 years to actually change the statistics on that—I know that the department is not always honest with people and does not give them full recognition of their entitlement. So I think there is a real need for this bill to be holistic instead of targeting the people who are the most vulnerable.

There are many other issues that are dubious about this bill. I think it was really interesting to see the Law Society and the Women’s Refuge having real concerns about it. The Women’s Refuge noted in its opposition that the bill does not include protections for women who are victims of domestic violence. So for all the talk, on the one hand, about violence, we are not addressing it in this bill. Thank you.

I am very happy to take the last call on the Social Security (Fraud Measures and Debt Recovery) Amendment Bill and to commend the Associate Minister for Social Development Chester Borrows for it. Some of our friends on the Labour and Green benches would have us think that we have introduced a new class of criminal—that there is now some sort of criminal inequality because it is not actually the offence that matters; it is how much money is defrauded at the time of the offence. So if it is a small fraud committed by someone who is supported by the State, then that is OK, but if it is a tax fraud, then they say “Oh, this Government should do something about that.” What absolute nonsense. What an absolute load of rubbish, and nothing—

💬 Iain Lees-Galloway: You are talking nonsense; that’s right.

Well, if that member wants to worry as to why Labour’s polls were down at around 26 percent last week, then the sorts of comments that have been coming from his colleagues during this third reading are a pretty good example of why. The reality is that the big difference here is that it is not an either/or situation. This Government takes both responsibilities equally seriously, as the taxpayer should expect of us. If someone is supported by the State, the taxpayer should rightly expect that the State put obligations on that person not to defraud their fellow taxpayers, and that is what this bill is about.

Lastly, it occurred to me during William Sio—

💬 Le’aufa’amulia Asenati Lole-Taylor: Su’a.

—Sio William Su’a’s contribution; thank you very much—

💬 Iain Lees-Galloway: No, other way round. Try again.

Well, I am sure the member can assist. It occurred to me during the member’s contribution why so many former Labour Party activists and supporters in South Auckland are now signing up to National. That is because of the rubbish that comes out of that party. I wholeheartedly commend this bill to the House, and I am sure other hard-working, taxpaying New Zealanders will also do the same.