Social Security (Subsequent Child Policy Removal) Amendment Bill

Members, we come now to the Social Security (Subsequent Child Policy Removal) Amendment Bill, Part 1. This is the debate on clauses 3 to 15, “Substantive and consequential amendments”. The question is that Part 1 stand part.

Thank you, Mr Chair. I would like to start my contribution by looking at the cost of the implementation of this new policy, which is removing the subsequent child rule that is in the current Act. It says in the documentation that there is no or very little additional cost. In fact, the only cost that is of significance is the $3.966 million for IT changeovers and for training costs for staff. But it does say in this bill that for those who shift from the jobseeker support to the sole parent support, the rate of benefit will not change. But we know that the change to sole parent also triggers additional financial incentives, so I just wonder, has the Minister costed those financial incentives, and, if so, what are they? And what is the likely cost of that—per annum—going to be to the taxpayer of New Zealand?

While the Minister is getting ready I’ll maybe just quote the impact that that’s going to have. There will be 5,400 on the sole parent that will have their work obligations changed, which means that they will no longer have to be seeking employment from when their youngest child turns one, and 2,500 jobseeker support beneficiaries would move on to sole parent support. So there is quite a significant number of people that will be transitioning on to different benefits. It also takes into account of the 1,000 partners of those people who also will have their work obligations changed. So if the Minister is able to address those costs, I think that the taxpayers would be very grateful. Thank you.

I’d like to just point out that the cost of those financial incentives are outside of the scope of this bill. However, I would like to point out what some of those financial incentives for training and employment would be for people going from job seeker through to sole parent. We know that when the subsequent child policy is removed, there would be approximately 4,200 sole parents receiving jobseeker support or that are currently seeking jobseeker support would become eligible to transfer to sole parent support. So some of the financial incentives that they might be eligible for, one would be the work bonus. That is a non-taxable, non-recoverable payment that can be made to clients or partners on specific benefits who do not have either part-time or full-time work obligations and who cancel their benefits to move into employment. Some clients who become eligible to transfer from job seeker to sole parent support when the policy is removed may therefore become eligible for the work bonus.

There’s also the Training Incentive Allowance. The Training Incentive Allowance, as we know, is a non-taxable payment for clients who meet the qualifications and are getting specific types of benefits. At the moment, the Training Incentive Allowance is available for sole parents receiving jobseeker support, but because of their work obligation commitments, it might mean that they can only study part-time with the Training Incentive Allowance. Moving from jobseeker support to sole parent support when the policy is removed may therefore be able to increase their study from part-time to full-time, and they will be supported to do so. So I think that giving people that added incentive to study full-time and increasing their qualifications is a really good thing.

Whilst reduced work obligations may remove a trigger in the welfare system conversations about returning to work, clients will still be supported to return to work if they indicate that that is their preference. I think that that’s really important in this, that it is giving those people their choice of what works best for their whānau. So we know that the Ministry of Social Development offers a range of initiatives, services, and support that build capacity and remove barriers to employment for sole parents. I would be testing your patience, I think, if I went through them all now, but if members on the other side are happy to hear them, then I would be happy to answer that question.

Thank you, Mr Chair. I’m quite sure that everyone in this Chamber agrees that we should be firmly and resolutely focused on reducing child poverty. So I would be very interested to hear from the Minister why over 30,000 more children are living in benefit dependent households since October 2017 when this Government came into power, and how will this bill reverse this trend of more children growing up in benefit dependent households, which are so clearly aligned with child poverty?

If the Minister isn’t in a position to answer that yet, I’ll give her one more question. I would like to know—given that since Labour came to power, there have been 74,000 more people on jobseeker support and 84,000 more people on the main benefit—does this Government actually accept that long-term welfare dependency is harmful? If so, what policies do they have to reduce welfare dependency? And how, again, is this bill going to help reduce that welfare dependency with its close alignment with child poverty?

The member opposite, Penny Simmonds, will be pleased to know, I’m certain, that this bill will support 42,000 children and help them in their journey, as she is suggesting, towards moving out of poverty. What I will say, too, is that the evidence shows that the current policy has not been effective in reducing time on the benefit. So there was a thought that this would increase time, or that the previous policy or the policy as it stands at the moment would reduce time on the benefit. That is not what the evidence has shown. Also, the evidence has not shown that the current policy has improved financial or social outcomes for those people on this benefit. So while this is a small scope—this particular bill is a very narrow scope and creates a very narrow policy setting—it isn’t about the fact of looking at the increasing time on the benefit, because it doesn’t currently show that. The evidence doesn’t show that this has been effective in getting that aim, anyway. So this is about equity—about creating equity in the current policy settings.

Thank you, Mr Chair. Just a couple of quick questions to the Minister. The Greens are very supportive of this piece of legislation, and we believe it’s well overdue to remove this kind of unfair treatment of subsequent children compared to other kids. We want all kids to be able to get the parenting that they need and that their parents are able to give them.

So from listening to the previous member from the National Party, who seem to be concerned about welfare dependency—as if that was a disconnected thing from the rest of society and could be resolved by sanctions and punishment of parents—I wonder if the Minister would like to talk to some of the drivers about why sole parents may need and benefit from receiving income support for a period of time to support themselves and their children.

I’d like to thank the member for that question, and yes, I think that the intent of this is to give those parents choice around what’s best for their family and what’s best for their children. I believe that it is really important that we create a realistic and sensible choice for those families and for those sole parents.

It was only last year that the Opposition put out their seven-point plan around the importance of the first 1,000 days in a young person’s life. I believe that getting rid of the policy settings as they stand at the moment supports the 1,000 days and those first 1,000 days of a young person’s life, because it gives a realistic choice that people can stay at home and be the first parent and the first teacher of their child. I think that that’s incredibly important, if that’s what works best for their family, because everybody needs to be able to make that choice, and not having something that’s being imposed upon them and choices taken away from them is incredibly important. That makes certain that they are providing the best that they can for their children. So I believe that that is the real reason why we are looking at this.

I know that it was part of the Welfare Expert Advisory Group’s recommendations; they put this forward that this was going to make a big difference to those families, but also—and something that is dear to my heart—a huge difference to women, because we know that the majority of sole parents receiving this, or in this situation as it stands, are women. The Welfare Expert Advisory Group acknowledged and identified that this was going to have the biggest impact on Māori and women. I couldn’t be happier that we’re making this difference here with this policy setting change.

Thank you, Mr Chair. I congratulate the Minister on her ambitions for women, and I must say I share much of that sentiment, to a degree. I think I made some commentary in this House last time I spoke on this bill about there being quite an ideological difference from these two sides of the House around this policy change. As much as there are ideological arguments to be had, there’s also data-driven arguments to have, and we on this side of the Chamber, especially, like to make our decisions based in data.

So, first of all, I’d like to ask the Minister about any impact assessment that has been had on women around the benefits of going back into the workforce, or at least attempting to go back into the workforce, after that 12-month period once that subsequent or second or third child turns one. I’d also like to caveat those comments with a note from the OECD which says that paid work is “the most effective way of reducing the risk of family poverty, enhancing child development, and generally giving children the best start to life”. So in the context of that comment from the OECD, I’d just like to ask the Minister two further questions: one, is she confident that the advice on the bill accounted for the harms of long-term benefit dependency, and, if so, why; and, two, where in the official advice are the harms of long-term benefit dependency thoroughly considered? Thank you, Mr Chair.

I think it’s important to establish that what the member with that question is assuming is that this policy setting is reducing long-term benefit dependency, and what we do know is that the evidence shows that the current policy has not been effective in reducing time on benefit or improving financial or social outcomes. In fact, what it has done is taken away choices for those families, and I think that that’s really important.

I feel that the question is a bit of a redundant question in the fact that it’s making an assumption around that long-term benefit dependency, and that’s not what happens. Under the current policy settings, that benefit dependency did not reduce; we created greater inequities within the system. We are dealing with those inequities with rectifying the settings of this policy change now.

So there is no evidence to suggest that removing the policy will have a negative impact on parents off benefit or employment outcomes. The evidence does not exist, and the Ministry of Social Development will continue to offer a range of employment initiatives, services, and support. I kind of agree with the member that it’s important that we have those services and support there for parents who are able to be in a position to make those choices to work. But, equally, we want those parents to make the choices and to have realistic choices of what is best for their whānau, and to give them a realistic choice of what is best for their whānau and not have that choice whittled away and taken away from them. That is the critical key to what we are rectifying with this bill here.

Thank you, Mr Speaker. Just, I guess, more to that point, I’m interested in hearing from the Minister, because the Greens absolutely support the view articulated by the Minister. We believe that parents, particularly mums, are best placed to assist the needs of their whānau, and sometimes it’s in the best interests of the whānau for mum to go back to work because her head’s been done in staying at home 24/7, because, my goodness, that is a tough, tough job. Rewarding, I hear, but tough—right? And so sometimes going back to work is the right thing for the whānau, but the mum and the whānau are the best people to be able to assess whether that’s the case or not.

The sense that there’s a blanket rule that can be applied to every single family, regardless of the mental health of the mum, the aptitude of the mum, the health of the baby, a history of violence and trauma or not, or whether there’s actually attachment issues that require the parent to put themselves first at home with the baby regardless of whether they want to be going back to work. The fact—the idea that we can just pretend that none of those differences exist and apply a blanket rule does my head in, to be perfectly frank. So we’re very pleased to see this piece of legislation, and the Minister’s spoken very clearly and articulately that, actually, there’s no evidence of this policy supporting people back into work faster. I suspect that’s because of those diversity of experiences and needs. But I’m wondering if the Minister has seen any evidence that sanctions work at all in our welfare system and how that may have impacted her decision making in light of this legislation?

That’s actually part of the broader review that we will have going on into the welfare area. I’m looking forward to finding that and reading through that, as I’m sure the member will be, and her party as well. But I’m really delighted that we will be looking into that because it does need examination and we do need to be looking into the evidence of the impacts of sanctions. So it will be part—and I can give you that reassurance—of the broader review that will be happening or is happening.

Thank you, Mr Chair. I’m really pleased that the Minister and the Green Party have raised this issue around evidence, because it came up in the Social Services and Community Committee that actually the official advice was a little bit devoid of this information. In fact, they did not analyse the impacts of long-term benefit dependency. The reason they didn’t do that was because the Minister had indicated from the outset that this was the policy direction that they were taking, and so that analysis had not been done. In fact, I believe it was part of the confidence and supply agreement with the Greens that this sanction be removed from the Act. But the reality is, and if the Minister would like some help with this, the evidence is unequivocal, and the evidence is that long-term benefit dependency does make it harder to enter the workforce and it is more likely to increase those cycles of hardship within those families, and it is not the compassionate action to take in the long term. So that information is there, and, of course, the social investment approach was entirely based on that evidence and the long-term benefits for both social and economic outcomes for this country.

So I would like to ask the Minister that if this was a policy direction that was already decided on before it even went to the select committee and before this bill was even introduced to this House, how is the Minister going to monitor and measure whether those incentives to work or those motivators to return to work are actually going to be introduced? And how will the ministry be measuring that and deciding whether this policy direction is actually going to create benefits for those children and their parents in the very long term? If we cannot measure and determine those outcomes, then I think this bill is actually flawed. So can the Minister give us some confidence that there will be measures put in place that will support her contention that actually there is no downside from implementing this policy? Thank you.

I can give the member over there some confidence that this did not come out of thin air. This actually was part of the recommendations from the Welfare Expert Advisory Group’s (WEAG’s) report in February 2019, and, again, that did not come out of thin air. The WEAG did a lot of research and analysis around their recommendations. They did a huge amount of consultation and they went out and worked with different groups throughout the country and looked at what was working and what was not working for those groups, and could see very clearly that this very small part that we’re talking about here today was not working for different groups. They particularly highlighted the women who it was not working for. But also, once recommendations were being made and officials were working through, again, this wasn’t just taking that recommendation and saying to this recommendation, “We’ll just take it and implement it and put a bill around this.” There was some research that was done with control groups—

💬 David Seymour: What did it say?

—and it was highlighted during the select committee process, I know, from the officials, who were able to do that and report back to select committee around that—but it showed that this was not making a difference to benefit dependency.

So I’m just going to go back to highlight that point, because it does seem to be one that people do have some concerns around. The current policy settings were not impacting on that at all. So this bill, this small, narrow bill, is about equity within the system as it stands now and restoring that equity.

Well, I thank the Minister for that very interesting answer, and for people watching this at home, this committee is debating whether or not people should have to look for work after one year after having a child while on a benefit. That was a great example of why people lose faith in politics. A great example of ducking and avoiding the question. We heard from the Minister that there was a working group, and that they did some research, and it didn’t come out of thin air—no one was saying that any of this came out of thin air. The question was very simple: will this policy lead to an increase in benefit dependency, and does the Government believe that benefit dependency—other things being equal—is bad for children’s welfare and development? Two very simple questions, and we kind of got an answer at the end.

Without pointing to anything in particular, the Minister told us that she doesn’t believe that requiring people to go out and look for a job has any effect on welfare dependency. Well, that’s another extraordinary claim, because if it’s true that requiring people to look for a job a year after having a kid on a benefit has no effect on whether or not people go out and get a job and get off benefits, then you have to ask why are we here doing it? You’d have to assume that people are going out and getting a job anyway, in which case we never needed this policy. Or, on the other hand, here’s another possibility—what the Minister just said is not supported by the evidence. Actually, having a requirement to look for a job a year after you have a kid on a benefit results in more people than would otherwise look for a job, more people working, and fewer people dependent on benefits. That sounds like a more plausible explanation, especially when the Government itself is looking to remove the requirement. Why would they remove a requirement that didn’t make any difference, as the Minister claims?

So I want to put the question back to the Minister. If it’s true that a requirement to look for work doesn’t reduce dependence on benefits, then why are we removing it? If it doesn’t make any difference, then surely we don’t need to make any change to the law. That’s the first question. Why are we making the change if it doesn’t have any effect?

Number two, I want to ask about equity, which the Minister mentioned. The Minister said that she’s very concerned about equity. Well perhaps she could talk to us, and please be direct. We don’t need to know about what did or didn’t come out of thin air, whether there was a working group, whether there was a select committee; we just want a Minister with the data at her fingertips who can inform this committee about the law we’re passing, OK? That’s all we want.

What we’d like her to do is tell us how do working parents behave? How many working parents have to go out and actually get a job within a year of having a kid? How many people who have a kid in New Zealand get to take more than a year off? Or, put it this way—what proportion of working parents in New Zealand have to go back to work within one year? Because I can tell the member, when I think about all my friends—I’m at a time of life when a lot of my friends are having kids—they ain’t taking a year off. They’re back to work. I just wonder if their experience is common, or how many people that have a kid in New Zealand at the moment are back to work within one year? And if the Minister can tell us that, maybe we can think about whether this policy is truly equitable. So that’s two questions that we’re very keen to hear the answer to.

I’m quite happy to help out that member, who obviously hasn’t listened to my answers from before. So, firstly, to start with his second question—that’s outside the scope of this bill. That does not come into this bill whatsoever. The equity that I have talked about with this bill is that, as the Act stands at the moment, we talk about the children from zero to three, three to 14, and this particular policy setting makes an inequitable change to that by talking about then the nought to one. It takes away from the fact that it treats the first child very different to subsequent children, and that is the inequitable setting, and that is wrong, if we’re talking about children, to treat them differently and talk about inequity between. That is the difference, and what I have said here already today is that we are talking about the equity between the children as it stands in the Act at the moment, and equity with the Act.

But I also would like to point out that key themes from submission in support of the bill were that the policy impacts child development, doesn’t reflect on parents’ caring responsibilities, currently as it stands at the moment causes toxic stress, as it stands at the moment it disproportionately impacts Māori and women, and that has been identified throughout from the Welfare Expert Advisory Group. It has created inequities in the welfare system, has not achieved its intended purpose, puts pressure on low-income families to have fewer children, and contributes to hardship and poverty.

I go back to what I believe is a fundamental of all parties across this party, the belief that the first 1,000 days—and I definitely know it’s the National Party’s policies, because they put it out in their election campaign about their seven-point plan around the first 1,000 days—but the first 1,000 days in a child’s life are incredibly important. This policy setting change—as I said, a small change that we are making here—ensures that we have really put that importance, and are showing that importance, on that first 1,000 days.

Thank you, Mr Chair, I appreciate that. I think it’s really important that we keep focusing on the children here. The Minister has talked about working groups doing this and that with policy; it is also very important to look at experience. I was an experienced mother who went back to work, I’ve watched my daughters go back to work after having children, and I’ve watched thousands and thousands of women retrain to go back to work, in my previous job. So much of going back to work after having children is about confidence. There is nothing in this bill that tells me that women are going to be given more confidence to get back into the workforce eventually. The longer someone is unemployed, the harder it is to re-enter the workforce—that sense of self-worth and that confidence just ebbs away. This is not a compassionate bill.

The Minister has already said that she sees the biggest impact of this bill being on Māori and on women, and, sadly, I think she is right. I think the biggest impact will be on Māori and on women. There will be greater benefit dependency by Māori and by women, and the children of those women will suffer. The children who are in a benefit-dependent family will suffer, all because this Government wants to have their so-called kindness and compassion—but the reality is they will suffer.

Thank you, Mr Chair. I thank the Minister for raising the issue of the first 1,000 days and referencing the National Party’s plan, its policy, on the first 1,000 days. I actually wrote that component of that policy so I firmly stand behind it. But what the first 1,000 days is about is not dedicating full-time at-home care for mums and their babies or dads and their new babies. It’s about creating that security with those children, and if you talk or listen to experts like Nathan Wallis, he will tell you that even children in day care can have those bonds if the facility manages the care of those children and rearranges their rosters and the process that they install there.

But one thing that I can’t reconcile with this bill, which has been raised, is that if you are a working parent you are entitled to 12 months’ parental leave. Six months of that is paid. But if you are not working you have no obligation to go back to work and so there is a disconnect and a misalignment between people who are working full-time and those who are not and receiving care from the State.

So how does the Minister reconcile that, and would she consider some other time frame, some other limit, to people who are caring for children on benefit before they have to re-join the workforce? One of the things that I do note, Minister, when we are talking about work readiness is that when someone has a time limit on it, when they have a time period that they have to work towards, what they are doing is starting to think about types of jobs that they might be interested in, the types of jobs that may be available to them in their local environment. Then they start thinking about the skills that they need to enter into those jobs, and then they start thinking about the training that they need, or the upskilling that they might need, or even going out and getting work in preparation for getting back into the workforce full-time.

But if there’s no time limit on that, if it’s very open-ended, then what is the incentive for people to actually start thinking about their skills, what skills they may need to develop, what re-education they may need for that work preparation? So without any kind of time limit on it, what I think is going to happen—and this Government will probably be very well aware of it—is that we are opening the door to very long-term benefit dependency and people staying out of the workforce because there is no incentive, no motivation, for them to re-enter the workforce. It just makes it harder on those people that do go back, because we all have to remember that the people who do go back to work are the ones that are paying for those that don’t.

Thank you, Mr Chair, and I thank the Minister for her very revealing reply to my earlier questions. She said that equity between kids in a household on welfare and a household with parents working was out of the scope of this bill. She then went on to talk about all of the terrible impacts of parents having to work in households where people are dependent on benefits. She talked about toxic stress, for example. Well, can I just offer a few thoughts to the Minister about why the kids of working households and their welfare is relevant and is in scope for this bill.

You see, this Parliament is here to approve the use of taxes for the Government’s purposes, and the people who are working—they are, compulsorily in this country, taxpayers, and so they do have an interest in how money is used. And they might reasonably ask, if we are going to spend money not having people working, staying on benefits to reduce toxic stress, then it might be relevant to understand what sort of toxic stress and other concerns the Minister has—apply to the people paying the bills. If we’re concerned about the people getting the Government money from the taxpayer, via the Treasury, via the Ministry of Social Development, I think we should be concerned for all kids, in all households. And, if it’s true that having to work is such a terrible thing, maybe the Minister could get up and tell us what sort of research they have done as a baseline for all those kids whose parents work and pay taxes and have to go back to work within one year already. I think we should be worried about their welfare too.

Now that I’ve explained, I hope, to the Minister why actually all children, including those in working households, are in scope for this bill and considering them is important before we set the levels of benefits for kids in benefit-led households, can the Minister get up and explain: has she studied, and has this policy been informed by, the experience of kids in working households? How many of them have parents who have to go back to work within one year? That’s very relevant, and I’d love the Minister to get up and explain it to us.