Special Debates — Social Development and Employment, Disability Issues, and ACC

I call on Ginny Ander—

💬 Angie Warren-Clark: Angie Warren-Clark.

CHAIRPERSON (Hon Jenny Salesa): Angie Warren-Clark—my apologies.

That’s not an insult, Madam Chair. I’m delighted to stand as the chair of the Social Services and Community Committee, and lead off this debate on the Estimates for Vote Special Development 2021/22. This report was tabled in July 2021 and it has been a while since the Minister was able to address this Chamber, and we welcome her back here. I acknowledge the Ministers and ministries for their work during a difficult time under Delta COVID conditions.

Vote Social Development is the largest vote in the Budget, with $36.1 billion allocated, which is a 4.7 percent increase from the year 2020-21. Benefits or related expenses account for 85 percent or $30.8 billion of Vote Social Development, with New Zealand super at $17.7 billion being the largest spend per annum. Vote Social Development is the responsibility of eight ministerial portfolios. We heard that Budget 2021 proposes to increase main benefits on 1 July 2021 and 1 April 2022. In total we heard main rates would be increased by $32 to $55 per adult per week. We heard that families with children, individuals, couples, and students will receive rises. We heard that childcare assistance will increase for low to middle income families. The orphans benefit and the unsupported child benefit will also increase. We heard that thousands of children will be lifted out of poverty due to these increases.

We asked why benefits would be increased and were told by the Minister that this would have the twin outcomes of lifting the lowest incomes and increasing economic stimulus. We learnt that the Government had been advised that by early 2021, 490,000 people could have been receiving a benefit, an increase of 100,000 people. This predicted peak was not reached and we discussed actual numbers of people on benefits, including those who work part time, or cannot look for work, or are caring for someone with a condition or disability.

We asked about people on the job seeker benefit for longer than three years and which initiatives were most effective for moving them off benefit. We learnt that $1.24 billion is allocated to the multi-category appropriation, improved employment and social outcomes support. This is an increase. We heard that the Flexiwage eligibility was expanded. Estimates hearings also covered support for children with disabilities, payment cards for young parents, debt write-downs, changes to monitoring of Oranga Tamariki, helping people to access and retain housing, and emergency housing. We also heard about the reinstatement of the training incentive allowance for all courses up to level 7 and the doubling of the winter energy payment for beneficiaries, including superannuitants.

We discussed the disability sector and the Minister brought in sign language interpreters to make this hearing more accessible. We’ve continued this practice where we can. The appropriation promoting positive outcomes for disabled people is $8.6 million, including funding for the Office for Disability Issues, which monitors and implements the United Nations Convention on the Rights of Persons with Disabilities by monitoring and promoting the implementation of the New Zealand Disability Strategy, 2016 to 2026, and the Disability Action Plan 2019 to 2023. We’ve heard that one in four New Zealanders are disabled. We heard that the Enabling Good Lives pilot under Vote Health will continue in three communities. This project encourages system transformation so that disabled people can determine how they use funding to best live their lives.

The Minister discussed her plans for the sector, the role of growing disability and accessible leadership, and the advice for disabled people in the governance context. Finally, we discussed helping disabled people who do paid work. As the chair of the select committee I sincerely thank the Minister, officials, the clerks, and the select committee members for a thorough and robust set of hearings. Thank you.

Thank you, Madam Chair. I’ve got a series of questions to the Minister, as you could probably expect. For those who have just started watching this debate, it might seem a bit strange to be debating the Estimates when we’ve actually gone well past that because of COVID lockdowns. This special debate does allow questioning of the Minister, but the reality is it’s after the fact.

So I want to start with questions to the Minister around long-term benefit data. What we’ve seen in the time since Labour has come to office is a significant increase in the number of people on benefits overall, but significantly on job seeker. And I do want to put on record this started well before COVID, so this is not COVID related. What we’re seeing is a large number of people who are on job seeker benefit and are staying there longer. So 53,000 are now on the job seeker benefit for more than a year. And while we accept the Government has made a decision to increase benefits, National is very clearly focused on supporting people into employment, and that’s why I want to start my questioning on job seeker numbers.

So I want to know: what is the answer, Minister, for why there are 53,000 more on the job seeker benefit—and have been for more than a year—under her watch? Do you want me to keep going? I thought the idea was that we do interactive questions, but if you want me to make a speech, then I’ll continue to do that. So what we have seen, just in terms of the scale of the problem, because while we accept the welfare system supports people in their time of need, there are a group of people who require support permanently. The much larger group are people who need support for a temporary period of time. Those are the ones that this side of the House is the most concerned about. That’s why we are asking questions about long-term benefit numbers.

I was interested in the chair of the select committee reflecting on a question that was put to the Minister in Estimates that, actually, we didn’t get an answer for at the time. So it’s why I am wanting an answer today. Looking at those who are on job seeker benefit for more than a year—where there is now 53,000 more who’ve been on for more than a year—what in this Budget that is different from any other Budget will provide support for those people to be in employment?

OK, thanks, Madam Chair. I’ll try and address the questions in the two sets of questions that the member asked. Firstly, I just want to make the point that, actually, when COVID hit last year, the prospects with regards to the forecast numbers of people that were going to be on benefit were actually quite frightening. I think when we got the Budget Economic and Fiscal Update figures before the 2020 Budget, there were anticipated to be around 490,000 people, peaking in January 2021. Each time, there’s been a reset of those forecasts—so with the Pre-election Economic and Fiscal Update, with the Half Year Economic and Fiscal Update, that has been reduced. However, we haven’t reached any of the forecast peaks that were anticipated by Treasury’s forecasts, and I think that really is a testament to how well, despite the challenges, New Zealand has weathered this pandemic storm.

Currently, we have about 355,000 people that are on benefit. Prior to this 14-week lockdown, it was about 351,000 people. So despite even the anticipated impacts of this period of time where we anticipated a knock to economic activity, we still haven’t experienced the lows that were possible when we came into this particular lockdown. The member’s not wrong; since pre-COVID they have gone up. I think at the beginning of last year there were about 302,000 people on benefit. And of course, at the moment it is 355,000.

What we had done was, even going back to pre-pandemic, pre-COVID, we had invested a significant amount of money through Budget 2019 to bolster the front-line support for work focus, through the Ministry of Social Development. And what I saw when I became Minister was that, previously, under the former Government, there had been a steady decline in the work-focused case management and little to no—or even less—investment in that side of the operations for the Ministry of Social Development. Hardship had gone up, and the resource in case management had to pivot to respond to the hardship that was there. But then there was nothing put in place with respect to the actual case management for work focus. So we invested in 2019, we invested again last year, and we continue to invest in this—it’s been a priority for our Government.

One of our focuses—before I sit down, otherwise I’m going to go on far too much—has been on ensuring those who have lost jobs during COVID are supported immediately to get back into employment as soon as possible. We know that that’s important, not only for their own livelihoods and the livelihoods of their families, but because of the fact that research shows the longer that they are on benefit, the more difficult it will be to be able to get back into the employment market. It has been heartening to see, then, that for the majority of this year, the exits off benefit into employment have been higher than what we have seen since electronic records were kept for the Ministry of Social Development.

So there certainly have been some relief moments, I think, over the course of the last year and a half. Moving forward, we’ll continue that focus in investment, with the absolute priority being about families and ensuring that—where they are able to work—we are supporting them into employment.

Thank you, Madam Chair. Unfortunately, the Minister didn’t really address the question I specifically asked, and while I’ll accept that none of the forecasts a year ago eventuated, that’s great news, what it also means though, on the flipside, is that we would have expected to actually see some progress in those who have been long-term job seekers when we haven’t; we’ve seen the opposite result.

In addition to that, the Minister talks about Budget 29 delivering more work focus—well, why is it, then, Minister, that there is now 53,000 more people who have been on job seeker for more than a year despite those two things?

And the third element, that comment around hardship was high when Labour came to power, well, it’s at record levels now. So Ministry of Social Development (MSD) staff are still dealing with significant levels of hardship.

So, of the programmes that are funded through MSD, what is the most successful for people who have been on the unemployment benefit for more than 12 months? Because the research says the longer somebody is on benefit—and three months is the best time; 12 months makes it incredibly difficult to reconnect someone to the labour force. Which of the funded employment programmes are actually delivering results? Because it’s not just about how much money you can spend; it’s about results. We want to see people in employment for themselves and their families. So which employment programmes that have been funded in Budget 2021 is delivering for those who are long-term unemployed?

Just quickly, if we look at Flexi-wage, and just acknowledging the fact that we as a Government have expanded that quite extensively, what we have already seen with Flexi-wage is around 9,000 people benefit from Flexi-wage. Of those, since expansion, 1,257 have taken up Flexi-wage. That’s 1,257 who have a two-plus year duration on benefit. That is almost double what had happened in the same period the year before. So that is one of many examples of where our investments are working.

I also want to acknowledge the reinstatement of the training incentive allowance. With regards to that, we actually will see those beneficiaries stay on benefit. However, whilst on benefit, of course, they will be supported financially to be able to take up study up to degree level, and that is important as well. It is about ensuring that people get access to the upskilling and training opportunities so that they can get into mahi that works for them and, hopefully, means that they’ve got better income to be able to support themselves and their families.

Thank you, Madam Chair. So I’m interested in following up on the point in the Budget materials where the Treasury papers indicated that a $50 upfront increase in benefits would, and I’ll quote, “help significantly with objectives to improve income adequacy, improve child wellbeing, and reduce child poverty.” Yet the Government decided to split that increase across years, with just $20 coming in this year in the last Budget and up to $30 in the next Budget, at a time where costs are significantly increasing.

We know that a significant number of beneficiaries aren’t getting the full amount of the increase, and some, in fact, are worse off, I understand, because of multiple payments interacting in a complex system which Welfare Expert Advisory Group (WEAG) was pushing for us to simplify. So I’m also noting that the number of hardship grants continues to grow, year on year, most of which are for emergency housing or food—keeping a roof over the head and food on the table for our kids.

So I’ve got five questions for the Minister, and in saving my precious time, I’ll lay them out now, and if the Minister could go through them. Does Ministry of Social Development have any projections on how much hardship grants will increase in the next year? How much do incomes need to increase so people do not need hardship grants to survive? How many of the WEAG recommendations will the Government fully meet through this Budget? Is the Government concerned about growing debt and, if so, what are they going to do about it? And considering that children with at least one parent—one member of the family—having a disability are most likely to be experiencing poverty, why has there not been an increase in the child disability allowance or the disability allowance? That’s my first list.

That’s a lot covered off by the member from the Green Party, and I appreciate the questions, and I’ll do my best. If I don’t cover them off, then she might want to repeat the questions because that was a lot to take in.

With regards to our considerations with pre-Budget and what we were going to do with benefit increases, I do want to note that we did lift benefits last year, $25, that we did index them to wages, which will see them go up every year. And then we did commit to benefit increases that will be, through 2021 Budget, between $33 and $55 per week, that I think people will be better off when they’re fully implemented in April next year. In most situations that would be when they are implemented, on 1 April of the following year after a Budget is announced. We brought some of that forward because we recognised the hardship. We haven’t been able to bring all of it forward but we recognise that we needed to do that. The rest will come into effect next year.

In terms of child poverty, I think with the measures that we have already implemented as a Government, we’ve seen around 43,000 children lifted out of poverty, and I believe that’s with the after - housing cost measure. With the benefit increases, that will see up to 33,000 more children lifted out of poverty. And then, of course, recently we made announcements to change some of the settings around Working for Families, which will see another additional 6,000 children lifted out of poverty.

All of these things are incremental steps that assist us with the overhaul of the welfare system that we committed to when we had our confidence and supply agreement with the Green Party. We haven’t been able to get to everything. With the $50 increase that was proposed, that is always the case: you float options, and then there’s a negotiation process that goes on pre-Budget, which is where we landed.

I don’t want to understate that, because we do know that they are the most significant increases to benefit payments that we have seen over decades, and do help to restore the dignity, I think, to a certain extent that was lost with the 1991 cuts that were introduced under that National Government.

We haven’t had the opportunity to make changes to the disability allowance or child disability allowance at this point in time, and nor have we signalled that we will over the course of the next year. However, those are things on our work programme, with regards to our welfare overhaul, and our Cabinet paper sets out the order in which we will look at things, what is in our short-term programme, what is in our medium-term programme, and what is in our longer-term programme.

It’s not all about fiscals. Actually some of it—a lot of it—is about operational capacity. Making these changes actually takes up a lot of operational capacity. I am the Minister, I do get to see what I’m asking of the Government agency, and I do know what they’re capable of being able to deliver. They have been working incredibly hard. So I do want to recognise my Ministry of Social Development officials—and they’ve been working at pace, as well as trying to do business as usual also, addressing the COVID demands that have come our way during this time.

With respect to the actual Welfare Expert Advisory Group recommendations, can I just say that I think all too often it’s looked at over-simplistically. I think the member knows, as well, that many of those recommendations are not tick box exercises; they are ongoing. So even when we talk about benefit increases or addressing income adequacy, it is not one action that will effectively address that recommendation and we as a Government can say “Done”. Many of them require ongoing work, including things like increasing public housing and range of other things. And so I will leave it at that, because I feel like I’ve been talking far too long.

My question is also around the numbers on job seeker. We’re seeing that we have 70,000 extra people on job seeker compared to when Labour came into power. Spending on job seeker has increased by $1.5 billion annually since 2017. I’m just trying to wrap my head around if we’ve got an extra 70,000 people on the benefit, and unemployment is falling by about 1.5 percent over that time—I’m just trying to work out how that’s possible where we’re spending an extra $1.5 billion a year annually and our unemployment’s dropping.

Thank you, Madam Chair. My first question is: does the Minister accept that a sole person on the job seeker benefit would get three times as much working full time on the minimum wage? Second question is related to the Flexi-wage, and I want to know whether or not the Minister is on track to deliver the 40,000 people into work over two years, and, if not, why not—and to confirm the percentage of those that have been on the benefit for more than two years. My understanding is that it’s 14 percent. And then I want to come back, in a further question, to look specifically around Māori employment, because there are nearly 75,000 Māori on the job seeker benefit and, from my calculations, about a thousand job placements, employment programmes for Māori.

Thank you, Madam Chair. If I could ask some questions around disability services. If I could first ask the Minister to provide some background on why centres that provide day activities and education and development for people with disabilities are closing when they consider that there is such a gap between the funding and the cost of delivery—they are estimating it to be around a 15 percent gap. Why the Minister has allowed this to happen—and if I can give her the example that in Southland now, all those centres have closed and there is not one day centre for activities, education, and development for people with disabilities. If I could also ask her what amount of the Budget is being used for the development of the Ministry for Disabled People and accessibility law and what amount of the Budget is going to be used on consultants and whether the Minister has specifically allocated any of those consulting fees to be for disability services consultants—so getting information directly from those with disabilities.

OK, it seems like a good idea to cluster them up, but then you cluster them up and then you’ve got 20 questions to answer in one go. I’ll give it a go. I’ll start with the most recent one.

Just with regards to funding for disability support services that the Ministry of Social Development (MSD) does fund, I have to say that when we came into Government in 2017, for nine years just about all of the social sector services that were funded by MSD had not received any increase whatsoever. We then got in and then have, year on year, increased the funding to all of our social services, particularly, I will say, with a focus on family and sexual violence services in particular. But if we look at things like budgeting services, not only did they get a significant baseline increase but also COVID-related funding. Our disability services as well have received funding increases. Sad to hear that you’re saying that so many of the day programmes have closed down. I will say that we have attempted to inject funding year on year, but it’s been very hard to make up for the underfunding that was experienced under nine years of the previous Government.

With respect to the question that came from the ACT Party on the amount of money that is going to the job seeker benefit, I think, in particular, I think that the member is including job seeker health and disability as well as job seeker work-ready, which is how you get those numbers. I think I’ve already talked about what we’ve endured over the last year and a half and why that’s led to a certain increase. The amount of funding that has gone to benefits: yes, that has increased, but a big part of that has been the increase in funding that we have put towards benefits. As I said earlier, it’s not just about the $20 that came into effect this year; it’s also about the $25 that came into effect last year and indexation, which has already started. If we think about all of the changes together that we have made since 2017 and then look ahead to next year when the benefit increases come into effect on 1 April, actually, 109,000 people are going to be better off than what they were in 2017 by around about $175 per week. That is a significant increase.

With the member Louise Upston’s questions, I think there might’ve been a question around Māori and job seeker, and so what we’ve seen is a 12.1 percent decrease of Māori job seeker since October 2020. We continue to invest in programmes that are focused on those that will be most disadvantaged in the labour market, and those, of course, are Māori; young people; Pacific; what we have seen more recently with COVID last year, women as well—in particular, sole parents—and, of course, what has been overlooked all too often is also disabled people. With all of this talk about beneficiaries and who’s on benefit and how long they are on for, I do want to remind this committee that, as I’ve said so often, about 50 percent of those people who are on benefit actually have a health condition or disability or are caring for someone with a health condition or disability. Then you add to that the number of beneficiaries who are caring for children, and that’s been quite challenging during the last year and a half with childcare challenges due to COVID. I think that we can see how the challenges have led to some of these numbers.

Thank you, Madam Chair. I was very careful, at the start of my address, that I talked very deliberately about job seekers, Minister. So it would be helpful if you could be clear about what I’ve asked.

I want to move to emergency housing. Over a million dollars a day is going into motels, which are, clearly, no place to raise children—4,500 children are currently living in motels. We’ve seen the average stay in a motel now is 14.7 weeks. So I want to ask a series of questions, Minister.

The first is: given the length of time that individuals and families are now living in motels, why has there not been any effort to secure better rates for taxpayers, for the moteliers, when they would be empty anyway? And the Minister accepted this point the last time she was before the select committee. So that is my first question. What work is now under way, given that it hadn’t been previously, to secure better rates so that there is better value for money out of people who, unfortunately, are living in motels for longer?

The second is: what is the Minister’s plan and deadline for not putting children in motels?

And my third is: looking at examples from places like Rotorua, where people who live in the community and have done for years are now being driven out of their own houses because they do not feel safe in areas like Fenton Street—tourists and visitors will no longer go to Rotorua, because of the motels and the volume of activity. And, in other communities, complaints of gang violence, stabbings next to a motel that was used by the Ministry of Social Development, that is next door to an educational facility, when, on multiple occasions, concerns have been raised about the risks to the community who live next to these motels—when will the Minister wake up and take action to protect the community from what is occurring in these motels and protect the 4,500 children, when it is clearly no place to grow up?

I’m awake; it’s just a pity that, between 2008 and 2017, we had a Government who were asleep at the wheel. So with regards to the first comment made by that member, the Hon Louise Upston, about the job seeker benefit and her being specific, I was as well. That member might not know, but there is job seekers “work ready” and there is job seekers “health and disability”. So I think that’s an important thing to know about.

Also, with respect to emergency accommodation, no one wants to see people in emergency accommodation; no one wants to see children in emergency accommodation. We were landed with this when we became Government, this policy, because of the lack of housing and the lack of investment in housing across the country that had endured—under the previous Government, again. We have committed to a public housing programme, and that is the most important part of it—is actually building the houses that these families need. Unfortunately, we haven’t been able to build all of the ones that we need all at once; however, that programme is on track, and those houses continue to be built. And we have changed from selling off State housing to ensuring that we are increasing the stock for the families that need them here, as well as changing a number of other settings across housing to ensure that we can meet the demand from New Zealanders who need housing.

Rotorua was used as an example earlier with respect to emergency housing. It has been very constructive working with iwi, working with social services, working with other Government agencies, and with council, with regards to the plan that we came up with there. We have indicated that that is what we want to look to do, moving forward—initiatives like that, that are geographically place-based initiatives that work for the community in which they’re working for. And so, in that particular instance, obviously we worked together to look at ways in which we could contract motel accommodation in a way that could cohort particular groups, especially prioritising families with children. And so that certainly has been a focus.

We’ve also put case management in place around those that are in emergency accommodation, and measures and supports that didn’t exist when we inherited that policy by the previous Government. There were no supports. It was a bit of knee-jerk reaction because of the fact that publicly it had come out that there were so many New Zealand families, sadly, sleeping in cars, and so they had introduced a policy without the supports around to be actually able to get in there and provide the fulsome, holistic types of support that those families and children needed. And so we’re in a position where we’ve been able to do that. I think we’ll see more of that moving forward. As I’ve indicated, Rotorua was just first off the mark with regard to that place-based focus, but there’s more to do.

Thank you, Madam Chair. Just in terms of perspective, your department is overseeing $300 million a year—six times more than when you came into office—with nearly 30,000 on the social housing register and, I’d say, 4,500 children in motels. So it is unacceptable after four years to say—when this situation has clearly got worse, you have to accept some responsibility for the dire situation of those families who are stuck in motels and for the community who live around them.

So I ask, again, what has the Ministry of Social Development (MSD) done to secure better rates for the motels it is using for longer? I want to give you an example from a social service provider that I met with not so long ago, who now refuses, because it is so unsafe because of the threats and intimidation and the gang presence at these motels—and they’re a hardened social service provider. You know, they’re not new to this game. They will no longer deliver food parcels and services directly to the motel units because it is too unsafe for their staff.

So what is MSD doing to improve the security of those who are living in—unfortunately—these motels, who are providing services to some of the vulnerable people who live there, and the community, who have to put up with it? The situation is just getting worse.

Thank you, Madam Chair. I might just go back to a question from the ACT Party on the establishment of the Ministry for Disabled People. In Budget 2021, we did indicate I think it was $73 million towards systems transformation. There is also, of course, going to be that process of transitioning the disability support services out of the Ministry of Health and into the new ministry, and so with that will come the appropriation of funding that previously would have existed within Health. I think the initial numbers that I got for setting up and running a ministry for disabled people was $73 million over—no, I think it was $85 million over the forecast period. So we can check that and I’ll come back to you if that’s wrong.

With regard to emergency accommodation, going back to that question—OK. We can talk about the fact that, as I’ve said to the member Louise Upston a number of times, the Ministry of Social Development (MSD) doesn’t actually have the legislative power to contract for emergency accommodation. It is when someone comes in and is homeless and needs urgent emergency housing, then they are eligible for a grant that will go to an accommodation provider who is willing to provide that emergency accommodation support.

In some parts of New Zealand, it isn’t as difficult to find emergency accommodation options. In some parts, it’s very hard because they don’t have the level of options that we need, and in some parts of New Zealand, we don’t actually have too much of an issue—I think Christchurch is a good example, and Canterbury—with respect to emergency housing. We haven’t seen the numbers inflated like we have in other parts of the country. With Canterbury, it’s really clear. There’s been a housing build under way post-earthquake, and so that means that they don’t experience that, and then we’ve got regions where it is an issue.

On top of MSD working to get people into emergency accommodation, they’re also—as I’ve said—working with providers, as is the Ministry of Housing and Urban Development, to ensure that those people have the support that they need. We’ve put things in place such as housing products that didn’t exist when we came into Government and things like work brokers. Many of our whānau find it difficult to get into private rentals. It can be because of the number of children that they have, because of landlords not wanting to take on large families. It can be because of things like credit ratings, and perhaps they’re not the preferred person.

So there are a range of housing supports that are needed here that extend beyond emergency accommodation, and I feel very confident that our Government is taking a very holistic approach to what is needed. But, as I said earlier, the hardship and need that we inherited is something that we continue to address, but, unfortunately, there was just such a high level of neglect under the previous National Government for nine years that we’re still in a situation where we’re still having to clean up their mess.

Thank you, Madam Chair. I’ve just got a quick question around annual departmental expenses. I’ve had a look and it looks like annual departmental expenses have increased by $1 billion since Labour came into power. It’s almost doubled, and I’m just wanting to know what’s behind these increases. What specific areas are you focusing on? Are you getting the outcomes that you wanted to achieve? And have we got another billion dollars’ worth of value to help our most vulnerable?

Just a reminder, please, before I take the Hon Louise Upston’s question: to the member Nicola Willis, you’re most welcome to get up and actually ask a question instead of just shouting over the top like that. Thank you.

Thank you, Madam Chair. So on the topic of emergency housing and the use of motels, I think the Minister should just accept that actually on every one of those metrics, you have failed, and the result of that is children growing up in motels, trapped in motels, in places where social service providers are too scared to go because of the threatening behaviour, the violence, the gang intimidation, and the drug use. The fact that the Minister doesn’t have a deadline by when she will stop putting children in motels is a disgrace.

So I’m going to move on. I want to address the issue of wage subsidies. So most New Zealanders would say that the wage subsidy roll-out last year was incredible—very successful—and the Ministry of Social Development (MSD) has had an incredible amount of well-deserved praise for the work that it did. So my question around the wage subsidy specifically relates to Delta. What planning was under way for Delta and for the wage subsidy that would be rolled out? Why is it that despite more than doubling the numbers of staff looking after the wage subsidy, firms were waiting, on average, 17 days for round one? Why is it, when the feedback had been positive in getting the wage subsidy out the door quickly, a very cumbersome, confusing system of a two-week application process was introduced, and then when the first deadline appeared the system was not available, it shut off at midnight, and business people who are already incredibly stressed about running a business, paying staff, putting food on the table, and paying their rent, that MSD made it incredibly difficult to get the support to them?

And I want to know, as the final question: what additional increase for funding has MSD received for the wage subsidy, and what forecasts are there for the wage subsidy to be utilised under the traffic-light system, and at what traffic-light colours will the wage subsidy be payable, and what will the rules be?

Some of those questions would actually be under the purview of the Minister of Finance, and so I wouldn’t want to step into his terrain, otherwise I might get in trouble.

With regards to the wage subsidy, thank you to that member, it has been a lot of work from the Ministry of Social Development (MSD) working with Inland Revenue, alongside the Ministry of Business, Innovation and Employment and others, and it was a huge exercise. The vast majority of people that I talked to have received the money in their accounts very quickly.

I think with Delta, what we did see was that there were some issues with regards to information that was given at the time that people were applying for the wage subsidy. That did not help with regards to delays, and so that certainly was one of the reasons. Not ideal, but, of course, I think, on a number of occasions, MSD have said that they are working as quickly and as hard as possible. Many of them could be rectified and sorted out, and so in the end it did work out.

With that issue when it was shut down for applications early, the member said it was shut down at midnight. It was actually meant to be shut down at midnight. Unfortunately, someone pressed the wrong button at shut it down at 7 p.m., and that’s where there was confusion for anyone who might have gone on, because they thought that they still had that five-hour period to be able to apply. So that was human error. MSD fronted about that. We also put communications out to people to say that they wouldn’t be disadvantaged and that they could still apply and they could let MSD know if they had attempted to go on during that five-hour window and couldn’t because of the fact that the application process had already been stopped as part of that.

What we have learnt as we’ve gone, I think, as we’ve continued with the wage subsidy, there have been continued bolstering of the integrity checks, and I think that has been important, as well as just the kind of fluidity in which MSD has been able to work, except for, as the member rightly put out, where there were some delays because of information supplied and some technical issues between IRD and MSD. So it was verification of entitlement, validating information with IRD, and ensuring that the right employers were paid. So there were a range of issues that came up which caused those delays.

Thank you, Madam Chair. I wonder if I could just get some clarification around some of these funding figures that the Minister in the chair, Carmel Sepuloni, has spoken about. The Minister said there was a $3 million transition funding for the setting up of the new ministry, but the Cabinet paper had $5 million in it. So is it $3 million or $5 million? Also, the Minister said an operating budget of $73 million but then $85 million, and I’m just wondering if you can clarify which that is. From the appropriation of the health funding, presumably that will cover the respite care funding, and has the Minister enabled sufficient funding to increase the respite care from the $75 per day that it currently is, which works out at about $3 an hour—which is, in fact, I would’ve thought, illegal—and whether the Minister is going to try and address that issue, which is causing so much grief for families who are struggling to be able to get respite care because, of course, nobody is prepared to provide 24 hours’ care for $75.

Sure. Just on the last issue, that would need to be directed at the Minister of Health. I don’t have any responsibility for the funding for respite care. It doesn’t come out of the Ministry of Social Development.

With the other issue, with regards to clarifying the funding for the disabilities transformation programme, in the 2021 Budget it’s $73 million that has been identified as the amount that is in place for Disability System Transformation. So when you look at the suite of measures that we announced on 29 October, really they are all connected.

With the accelerating accessibility, or the Accessibility for New Zealanders Bill that we’re planning, that hasn’t yet been costed because the bill won’t be introduced to the House until July 2022. We’ll need to go through a select committee, and then once that is completed, then there will be able to be costings for that, but at this stage we don’t have that.

Madam Chair, I’m very mindful of the fact that I’m supposed to be talking about ACC, with that ministerial hat on, and we haven’t had an opportunity to do that yet. So I’m putting to the committee that perhaps we should switch to that portfolio and have 10 minutes on ACC.

Thank you very much, Minister for that overlay and to talk about ACC. As we discussed back during the vote, Labour—

💬 Kieran McAnulty: Point of order, and I apologise to the member but it is convention for the chair of the relevant select committee to commence the sections, and the chair is behind me.

Thank you very much, Madam Chair. And yes, indeed, as the chair of the Education and Workforce Committee I’m happy to take a call on this debate.

I’m going to provide a quick outline of the process our select committee followed in considering the annual reviews on the Accident Compensation Corporation and WorkSafe New Zealand. This year, in line with the review of the Standing Orders 2020, we took a sector-wide approach to the annual review process. In this case, considering ACC and WorkSafe, we decided to report on the labour market as a whole rather than reporting on each entity separately. We invited the Minister, the Hon Carmel Sepuloni, to speak on the broader themes and issues she’s working through in her portfolio. What this new process allowed us to do was to not only consider the findings of the individual agencies but how they relate to each other, and also what sector-wide outcomes are being achieved for New Zealand.

I also want to take this opportunity to thank the Hon Michael Wood, Minister for Workplace Relations and Safety, for his contribution to the select committee at this process. Because what that provided us was to have a further sector-wide lens, a view on the issues.

But focusing on the ACC part of the overview, the Minister for ACC went into details on the big role that ACC has had to play since COVID-19 spread to New Zealand. She told us about the work her office is doing to look after pre-existing claimants and whānau in ensuring their safety, as well as proactively modifying the way that treatment and support were provided.

We had officials from various Government departments providing useful further information on how ACC are improving their service to claimants. They talked, in particular, on the introduction of a new case management model, which was completed in 2020. We heard that since the model was introduced, ACCs client satisfaction rates have significantly improved. The Minister said that the Government had made the decision in July 2020 to keep levy rates unchanged until 2022. We heard that this decision has helped ease the financial pressures of COVID-19, and also, at the same time, it provided more certainty for businesses.

Our committee was also pleased to hear about ACC’s work to improve outcomes for Māori. We heard about their strategy Whāia Te Tika and the three focus areas there. We heard about initiatives that are supporting this particular strategy, including introduction of a Māori customer advisory panel and the testing of a Whānau Ora model for the provision of home-based disability and support services.

The committee considered many more aspects of ACC, including its contribution to support New Zealand’s efforts to reduce net emissions to zero by 2050. The committee was pleased to learn that in a great display of timeliness, ACC had already taken steps to reduce their emissions, and in August 2020 had introduced a climate change framework.

We sought information on what investment ACC was making to prevent workplace injuries and, in particular, in the higher risk areas of industries like farming, construction, and forestry. We learnt about ACC’s views on the dealing with psychosocial harm in ACC cases as well. That has given us something to look forward to hearing about.

It was a robust review, and just like when I opened the Estimates debate earlier this year for the education sector, I wanted just to acknowledge the new format that we considered these entities within. I thank the Ministers for giving their time to the committee. It gave us an opportunity to have a very robust debate about the future of the labour sector in New Zealand, and at the same time that provided for increased parliamentary scrutiny. Thank you, Madam Chair.

I’ve got two areas of questioning for the Minister that we discussed through the select committee, and I acknowledge the select committee chair there. The first area is around the transformation programme, which includes the next-generation case management system. We were told in that select committee hearing that everything was fine. But I think subsequently to that we’ve found out that things are not fine, actually—widespread issues around staff workload and falling client satisfaction rates. So my question to the Minister is quite clear around that. Does the Minister stand by her statement at the time in regard to the transformation programme that it’s showing promising signs? And if so, how can she, and why can she, still be confident that is the case when it has become very clear, subsequent to those conversations, that the ACC system in regard to the transformation programme is failing its staff and failing Kiwis who are reliant on the ACC support system?

The second area of questioning that I would have for the Minister is in regard to trust in ACC, another area of topic that we discussed. Subsequently to that, there’s been widespread reporting of a culture of employees sharing private images of bodily parts and images and injuries on Snapchat, in a group called the ACC whores, including of an athlete representing New Zealand on the world stage, and these photos also included someone who attempted suicide. This has all been reported by media. This is completely abhorrent and completely unacceptable. I want to understand from the Minister, who holds the accountability for the performance of her department: what is specifically being done about protecting Kiwis’ privacy within the ACC corporation? And a second aspect is: is the Minister confident that the investment, significant investment, in privacy infrastructure and capability is sufficient, given these very real problems? Thank you, Minister.

Madam Chair, I’ll try and speak really quickly, because I know that the member Jan Logie would like to say a few words. With regard to the case management model and the business transformation model and that case management model, the work was completed in 2020, September. However, they have said that they need time to embed. Clearly, there’s some room for improvement. It doesn’t mean that it’s all bad. However, there certainly is some room for improvement, and that’s certainly the discussion that I’ve had with the board chair, and I know that the acting CEO has been working hard on that.

The privacy issues—that’s completely unacceptable. It was appalling. I think we were all absolutely shocked by that. I think the ACC has done the right thing by commissioning an external review. They worked with Treasury with regard to the terms of reference on that. We will wait to see what the findings of that review are, and I am confident that ACC will take on board the findings and recommendations that come from that.

Thank you. Specifically, is the Minister willing to consider a law change to lose the requirement for an assessment for sensitive claims to establish mental injury to put over $20 million and over tens of thousands of precious psychologists’ and psychiatrists’ time back into healing rather than causing harm?

We will be having a law change very soon—or at least having legislation come to the House. It doesn’t cover what has been asked for by the member, Jan Logie, but I am excited about the fact that we are able to introduce legislation that will cover birth injuries and will reverse some of the harmful changes that were made under the previous National Government in this piece of legislation that will come to the House before the end of the year.

There’s more work to do. I’m always looking for ways as Minister to work with Ministry of Business, Innovation and Employment on policy developments that see us covering off some of the equity issues or gaps that currently exist with ACC. I do want to say that ACC is a world-class scheme. I feel that, as a country, we are very fortunate that those who came up with this idea 50 years ago did. It was 50 years ago, though, and so we do need to be mindful of the fact that 50 years later, the world has changed. How do we ensure that the scheme is fit for purpose for 2021 and moving forward? That’s certainly where my mind is at, but I can’t pre-empt to that member what any future legislative changes might be. All I can say is we certainly are already looking at that space.

Thank you, Minister. Members, the committee is suspended for the dinner break, and we will resume at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.

Ā, kāti rā, tēnā rā tātou katoa. The committee has resumed. Members, before the dinner break, the committee was considering current issues and priorities in a special debate. That debate is now resumed. There are approximately three hours, 15 minutes remaining in the debate. The following Ministers will be available to speak to their portfolios: from 7 p.m. the Minister of Transport, from 8 p.m. the Minister of Housing, from 9 p.m. the Minister for Children. Minister Wood is in the chair now for the transport portfolio. The question is that current issues and priorities be noted.

Transport