Estimates Debate — Social Development and Employment

Thank you, Mr Chair. As I said in the Estimates hearing in June, when this Government took office we inherited an expanding welfare system. The Ministry of Social Development (MSD) was supporting 70,000 more people on jobseeker benefits than six years earlier, despite New Zealand having gone through periods where workers were in high demand. The number of people who’d been on jobseeker support continuously for more than a year grew by about 40,000 people. The number of children growing up in benefit-dependant households grew by over 50,000. The number of people receiving a working-age benefit is forecast to peak in January 2025 at about 388,100, or 12 percent of the working-age population. These numbers are the reason why this Government has placed a high priority on supporting people on welfare into employment and providing New Zealanders with greater opportunities to get ahead. It is also why one of the nine Government targets is to reduce the number of people on jobseeker benefit by 50,000 by 2030.

Under our Government, MSD will target its efforts on job seekers, with a particular focus on young people. In 2024-2025, dedicated employment case management investment is being prioritised for job seekers who are closer to the labour market. Case management services will be expanded to reach 70,000 people by the end of the year. We’ve set targets to have 70 to 75 percent of those supported by Flexi-wage and 50 to 55 percent of those supported by Mana in Mahi being jobseeker support beneficiaries by June 2025. I’ve announced a new traffic light system in August as a quick and clear way for clients to understand their current level of compliance with their work obligations and to understand what they need to do if they aren’t meeting their obligations. I’ve also announced an extra 2,100 places for job seekers aged 18 to 24 in community-led programmes that provide job coaching and other support to access training, education, and employment initiatives.

Budget 2024 prioritised spending on MSD front-line services that give those on welfare the support they need to join the workforce. We continued investing $1.1 billion in front-line employment services and supports. This funding in the employment multi-category appropriation for Budget year 2024-2025 will be put towards services that help people find and retain work, jobs and skills hubs that help people into a career in the construction and infrastructure fields, and Flexi-wage assistance to help employers to take a chance on harder to hire job seekers. I’m committed to improving the lives of vulnerable children by enacting changes to the oversight of the Oranga Tamariki system. Later this year, I plan to introduce legislation to increase the independence of the Independent Children’s Monitor by transforming it from a departmental agency inside the Education Review Office, to an independent Crown entity. I also plan to give greater visibility to the role of the Children’s Commissioner to reverting to a single commissioner.

Our Government is committed to reducing child poverty and has set a target to reduce the number of children experiencing material hardship to reduce from the current measure of 12.5 percent down to 11 percent in three years’ time. That will lift 17,000 children out of poverty. In setting a new target, we had to factor in how far behind we are in tackling this problem after all three primary measures of child poverty increased in 2023 under the previous Government. Officials advised that child poverty reduction targets set by the previous Government were no longer realistically achievable. Our new targets are ambitious but they also reflect the reality of the social and economic climate we are in.

Since becoming the Minister for Disability Issues, my top priority has been making sure the disability support system is stabilised. Delivery of disability support services shifted from the Ministry of Disabled People - Whaikaha to the Ministry of Social Development on 16 September. We have established a task force to implement the recommendations of the independent review into the disability support service. I’ve been consulting with members of the disability community to ensure that since the review was launched and we have also committed to engaging further on decisions arising from the remainder of the recommendations.

I’m proud to say that in Budget 2024 we invested an additional record $1.1 billion to boost Disability Support Services, meaning a record $2.6 billion is available. The problems that we are addressing through the Disability Support Services review aren’t funding issues; they are system issues. The independent reviewers found that many of the problems stem from the previous Government’s rush to set up Whaikaha. The ministry’s financial controls were poor, its monitoring of expenditure inadequate, and it lacked public sector disciplines and operational practices seen in other Government agencies. While the review won’t solve everything overnight, it’s important that we ensure that Whaikaha and the Disability Support Services are fit for purpose, financially sustainable, and help disabled people achieve their potential. I’ve also asked the ministry to scope a programme of work to enable us to make concrete, tangible improvements in accessibility. Thank you, Mr Chair.

I’m going to start with the public sector target of reducing the number of job seekers on benefit by 50,000, and I want to discuss the numbers, where we’re at, and where we’re forecast to get. At the time we had the hearing, there were 14,000 more people on benefit since that Minister and her Government took office in October. There’s now 26,000 more people on benefit. Now, we certainly don’t begrudge people who need support through the welfare system. However, it is indicative of an economy that is going backwards, and a lack of investment and focus on supporting people into employment.

I’m concerned, and I have a question for the Minister around forecasts. As at the Budget Economic and Fiscal Update (BEFU) for 2024, 202,000 people were anticipated to be on benefit by January 2025. That was when it was meant to peak, but, currently, already—and this is data from 6 September—there are 203,709 people on jobseeker support. If I didn’t make it clear, the BEFU forecast of 202,000 on jobseeker support by January 2025 was meant to be the peak, but it’s September and we’re already at 203,709.

I want to know from the Minister whether or not she’s received any updated advice or information so that we can share with the public what the new forecasts are, and how bad unemployment and the rates of beneficiary uptake are going to be under this Government, given that they’ve already surpassed the forecasts that we were given at the beginning. I also want to know, given there are 26,000 more people on benefit since that Government took office, how many more children there are living in benefit-dependent households and what that will mean for child poverty and child poverty predictions.

I have a different question, but I’ll put it on the table now, too. I want to know from the Minister why, given there are actually 30,000 more people on benefit now than there were a year ago, we are seeing food grants down 2,500 now compared to a year ago. It doesn’t seem to make sense that we have fewer people in the welfare system needing hardship support when there is a significant increase of the number of people that are currently in the welfare system accessing benefits.

I want updated forecasts for how bad unemployment and beneficiary uptake is going to get in the country, given how bad it already is, and significantly worse than forecast; how many children are living in those households and what the child poverty implications will be; and why there seems to have been a reduction in hardship assistance uptake, despite the fact we see 30,000 more people on benefit compared to a year ago.

Thank you, Mr Chair. I want to take us back to one of the decisions that was made as part of the Budget, which was to stop around 900 disabled workers from being entitled to earning at least the minimum wage. Some of those workers are currently earning close to $2 an hour for work that other people, and able-bodied people, could be making on the minimum wage. When we were unpacking this policy decision of preventing disabled workers from earning, at least, the minimum wage, to pay for tax cuts, we were told that one of the rationales was concerns from providers, including potential job losses.

I want the Minister for Social Development and Employment to tell us whether it’s true that going ahead with a wage supplement that would have topped up the contributions from employers would have resulted in job losses; if so, how many job losses would we have seen? To me, when I read the papers, it just seems like it was a callous cut to actually enable tax cuts, and it had nothing to do with protecting jobs. Can I confirm how many job losses we would have seen if we had gone ahead with the wage supplement, a top-up to wages in contributions from employers that would have enabled disabled people to earn at least the minimum wage?

I have been reminded to keep my answers short, so I shall. The first thing: in terms of the economic context, I want to repeat what the Prime Minister said in the House yesterday. When you have extraordinary Government spending, some of it wasteful, it leads to inflation, it leads to higher interest rates, it leads to a recession, it leads to unemployment—that is the reality of the cycle we are in, and, yes, it is worse than Treasury forecast.

The current forecast is that instead of 202,500 being on the jobseeker benefit in January 2025, it will peak at 214,000. That doesn’t change our target, it doesn’t change the work we’re doing, and, actually, what I would like to put on record is that our work exits in July and August this year are 1,500 up on the same time a year ago, so what we’re doing is working. I would just repeat for the member that, in terms of child poverty, we have an additional 50,000 children growing up in benefit-dependent households. That’s the legacy of the previous Government, and now we have 224,000 of those children—one in five, which is reasonably dire.

In terms of the next member Ricardo Menéndez March’s question about the minimum wage exemption, I would remind members that the minimum wage exemption predominantly applies for those who are receiving the supported living payment, so they receive a full-time benefit for their disability, and the minimum wage exemption at the moment applies to about 900 people, who are able to then be in a workplace or a disability enterprise. The feedback from the disability enterprises was they didn’t put a number on the job losses, but they were very concerned that if the wage supplement was to proceed, it would mean job losses.

The member might be interested in one of the pieces of work that we are progressing at the moment, and that is how we make sure that more who are on the minimum wage exemption—that that is used as a pathway into the open employment market or further education or training. That is something that I’m committed to. I’m very clear about supporting more disabled people into work.

Thank you, Mr Chair. What I’m hearing right now is that the Minister went off vibes, in terms of just anecdotal feedback from providers, that there would have been job losses, because she hasn’t been able to answer, straight up, how many jobs would have been lost if the Government had gone ahead with a top-up—a top-up—for employers to allow disabled workers to earn at least the minimum wage. If we look at the papers, it seems to me that she simply cut that initiative so that she could afford tax cuts, and it had nothing to do with protecting jobs, because she hasn’t been able to materially substantiate how exactly we would have seen job losses as a result of topping up employers’ contributions. I’m asking the Minister again: how exactly would we have seen job losses for disabled people, who deserve at least the minimum wage, if the Government had gone ahead with topping up employers’ contributions with the wage supplement to replace the minimum wage exemption?

Now, my second question is in relationship to child poverty. The Minister has talked about how we are behind on child poverty targets. She also talked about how her new targets are “ambitious” and “realistic”. Can I ask: how can she say that we are behind and not realise that she’s making us even further behind from meeting those targets when her changes to benefit indexation will put more children into poverty? My question on child poverty is: does the Minister accept that decisions made by this Government, changes to indexation to benefits, are projected to make child poverty worse?

Addressing the second question first, when we talk about the state of child poverty in New Zealand, the unfortunate reality is the 2023 report came back and showed that each of the three primary measures were going in the wrong direction. If you look at material hardship—that’s the one our Government focuses on—in the six years that the Labour Government was in charge, the number of children in material hardship went up by 4,100. Our focus is on supporting families into employment. That is the best way to lift children out of poverty—today and in the future. That’s what our focus is. Budget 2024 will lift 17,000 children out of poverty.

Thank you, Mr Chair. Can I ask the Minister some questions around Māori employment and unemployment. I’ve heard her a number of times saying how this is a priority. We accept that this is a priority. We will also understand that, when Governments come in, Māori unemployment particularly is double sometimes. When I came in as the Minister, it was nearly triple that of the general rate. In terms of the Government’s targeting of Māori unemployment, how does that apply in terms of the needs-based provisions that have been emphasised recently by David Seymour and Nicola Willis? I say that in particular because I look at a scheme like Māori trade training, which the Minister will be aware of. What sort of directive has been given there? Can the Minister explain where programmes like Māori trade training fit in? Will that mean that there will be fewer positions, in terms of Māori trade training?

Can I also go to another question: Mana in Mahi, of course, has always been a kaupapa that both the previous Government and this Government are talking about, and I’m interested in the Māori uptake in that area. Is the Minister on track for 50 to 55 percent of those being supported by Mana in Mahi being job seekers by June 2025? Can she tell the committee today what the current percentage is? Also, does the Minister have a target in terms of reducing Māori unemployment; if so, what is it, and is she working with iwi and Māori providers in this area? Obviously, it’s a major priority, and the Minister would have had some consultation, some discussions with iwi leaders, no doubt. Is that forming part of her priorities going forward?

I thank the member the Hon Willie Jackson for his question, and one of the unfortunate realities of the weak economic situation we are in, with rising unemployment, is that it does mean, as we have seen in previous challenging economic times, that Māori unemployment is rising at a rate higher than for the rest of the population, which is, of course, very concerning.

Going through some of the programmes that he referred to—Mana in Mahi: our target is 50 to 55 percent to be coming on to Mana in Mahi from the jobseeker benefit. If we look at the current numbers, 35 percent of participants are Māori. It is a programme that is producing results, as is He Poutama Rangatahi and the Māori trades training fund. In terms of the programmes, basically what we are looking at, if you look at the target of reducing the number on jobseeker benefit by 50,000, 40 percent of that 50,000 will be Māori. We’re about looking at what programmes will work for individuals, what do we give, what provides the best success for them to move into employment. I’ve been really encouraged by some of the programmes that I’ve seen, and providers, the most recent being in Auckland last week, where, with Mayor Brown, we recognised 1,000 new jobs in only one element of Auckland Council’s business with Ngā Puna Pūkenga, and many of those were young Māori and the providers, the employers, were Māori as well.

Basically, our Government is looking at the 50,000 and saying, “How do we place one person at a time into work?”, because we know that’s what improves their life outcomes, absolutely working with iwi and Māori to solve this problem.

E ngā mana, e ngā reo, tēnā koutou katoa. Tēnā koe, Mr Chair. I just want to stand and address some urgent issues—the Government’s commitment to ensuring that the wellbeing of Māori communities is prioritised, particularly in light of the current Budget cuts and policy shifts. We’re witnessing significant reductions in staffing within the Ministry of Social Development and cuts to key social programmes. These raise critical questions. How does the Government plan to hold itself accountable for ensuring that culturally appropriate services for Māori are adequately funded and not undermined by these staffing cuts? The Māori communities and partnerships groups play a vital role in supporting our whānau, hapū, and iwi. If these roles are diminished, it’s our people who will feel the brunt, and the brunt will be felt by our Māori providers out in our communities.

Another concerning point is the 12.2 percent reduction in funding for the improved employment and social outcome support appropriation. Why has there been such a cut when Māori face some of the highest unemployment rates in the country? These are varied services that our community rely on to gain meaningful employment and escape the cycle of poverty. What evidence does the Government have that this reduction won’t harm the quality of services provided in Māori communities?

We’ve also heard of the plan to reduce the number of people on jobseeker support—50,000, as other members have said. Does the Minister stand by her intention to remove these people without ensuring that they are employed? More critically, how will the Government ensure that this doesn’t disproportionately push Māori into further hardship or underemployment, given that Māori are already overrepresented in these statistics?

We cannot overlook the housing crisis which affects our whānau across the country. Given the increased need for emergency housing assistance, why is the Government forecasting a decrease in funding for homelessness and transitional housing programmes which disproportionately affect Māori? This is particularly troubling when we know the Government’s broader policies, such as the imposition of benefit sanctions and the 90-day, no-clause tenancy terminations, only increase the demand for emergency housing.

Let’s not forget about tāngata whaikaha Māori, our disabled Māori populations. What specific steps is the Government taking to address the negative impact of funding cuts on programmes that support them? The discontinuation of the wage supplement programme for disabled workers is especially concerning. How can the Government justify these cuts, knowing that it may result in disabled workers earning as little as $2 an hour?

When it comes to our kaumātua, does the Government believe it is fair that Māori die seven to 10 years earlier than non-Māori, yet receive less benefit from superannuation due to their shorter life expectancy? This is an issue of equity, of fairness, and of one that should not be ignored.

Lastly and most urgently, I must highlight the devastating issue of youth suicide among Māori. Does the Minister believe that cuts to youth support whilst this Government are pursuing an agenda harmful to the identity of rangatahi Māori to be wise, considering that Māori have higher suicide rates than non-Māori? We must ask why services supporting rangatahi Māori are being scaled back when they are already some of the most vulnerable in our communities.

Our communities deserves answers. We deserve action. We deserve policies that uplift—not diminish—the potential of our people. Kia ora.

I thank the member Takutai Tarsh Kemp for stating her concerns in the committee. I won’t be answering questions that are outside the scope of the delegation that I have today, and I won’t repeat the comments that I answered to the previous question.

Just to give an example of the employment initiatives, the member made a comment about a reduction in the employment monetary compensatory amount. The baseline amount is the same as it’s been over several years. The only difference was some time-limited funding that was related to COVID coming to an end, but the baseline has pretty much remained the same.

In terms of front-line services, in the reductions that were required in the savings exercise for Budget 2024, front-line services were protected. To give you an example, case management is one of the most effective things we can do in terms of supporting people into employment, and we have more case managers than we had a year ago. He Poutama Rangatahi, which is very much targeted on young Māori—great providers around the country—is rated as effective, and 73 percent of the participants are Māori.

Thank you, Mr Chair. I’d like to ask the Minister a couple of questions, given that she has repeatedly said that she’s committed to better outcomes for disabled people. However, we don’t really see that outlined in the Budget at all. I’ve got a couple of specific questions around—I’ll start with the minimum wage exemption.

I do note that the Minister has noted that she’s been asked this by other members before, but I have quite a specific question because the Minister has said, in her own record—from memory, during the Estimates hearing as well—that the reason for scrapping the work on the minimum wage exemption and deciding not to scrap the exemption itself—which of course is part of Budget 2024, and returning the money that was put aside for that to the centre—the Minister has said that this is because Aotearoa Disability Enterprises has come out and said that they cannot guarantee that jobs will not be lost as a result.

I have spoken to them since, and that is not the understanding. What we have heard from them is that they wanted the detail of the policies that was announced by the prior Labour Government. Given that that’s not what they have said—and I cannot see that in any quotes from them in any media as well—I’d really like to know from the Minister why she made the decision to do that, if that’s not purely a cost-cutting exercise as it is being seen by disability communities more broadly.

Hon Carmel Sepuloni: Where did the $37 million go?

Hon PRIYANCA RADHAKRISHNAN: That is my first question that—yeah, I’d like to know where the $37 million that was earmarked for the minimum wage exemption to be scrapped, where is that going? That is one question that I’d like to know.

The second is really around baseline funding that was earmarked for this year for the EGL roll-out—the Enabling Good Lives roll-out—which is now being used to shift Disability Support Services (DSS) to the Ministry of Social Development. Given that that’s baseline funding within the Estimates, I would like to know why she’s decided to use that funding to make this shift, given that there’s been absolutely no evidence in any of the reviews that this is actually going to lead to good outcomes for disabled people.

I’d also like to know how she’s committed to better outcomes, given that she has cut access to flexible funding. She’s put a freeze on residential care, which means that some of the most intellectually disabled New Zealanders will not gain access to residential care. She’s paused EGL and, as I mentioned, is now using the budget that was earmarked for 2024’s EGL roll-out to shift DSS into the Ministry of Social Development—a ministry that does not have the capacity, capability, nor the inclination to be able to administer Disability Support Services. And she’s gutting Whaikaha, the Ministry of Disabled People, a ministry that disability communities fought for, for many years.

I’d also like to know, Minister, where the $1.1 billion that was earmarked in Budget 2024 is actually going, because, as far as I can tell, no one within the sector knows where that money is going either, and I would like some transparency around that in Budget 2024, because, really, all the sector is feeling at the moment is considerable anxiety and distress because of reviews that have led to changes that were not even recommended within the review. If this Minister’s saying that she’s committed to better outcomes for disabled people, where are they?

I thank the member the Hon Priyanca Radhakrishnan for the question because it gives me the opportunity to put the facts on record, which are quite different from what the member was referring to. I also didn’t address the comment about tangata whaikaha from the previous member’s question. I would just remind the committee about the increase in investment of $1.1 billion, which the previous member has asked about.

I didn’t want to repeat things that I’d made in the opening statement, but let me go back to make it clear to the member. The unfortunate reality is that the disability support service was getting to a period where it was running out of its appropriation, and it was not necessary for it to do that. It was not necessary for it to do it. In previous years, if you look eight to 10 years earlier—

Hon Carmel Sepuloni: Under National and Labour—we topped it up.

Hon LOUISE UPSTON: If the member wants to hear the answer, I’m happy to do so; if they don’t, then I will return to my seat. The increases were sort of in the range of 2 to 4 percent on an annual basis; in the previous three, four, five years, they went to double digits. No one could explain double-digit increases. That is the unfortunate reality of Whaikaha being in a situation where they were running out of their appropriation. What did the Government do? The $1.1 billion included $80 million to ensure that Whaikaha could continue to provide Disability Support Services to 30 June, and it covered that appropriation. Yes, it did mean some changes to the guidelines around flexible funding, and I appreciate that that was incredibly stressful at the time.

The review was necessary. It found far more than we expected it to. As I said, it is not a failure of funding, with the increase of the $1.1 billion; it is a failure of the system—the system that the previous Government set up in a rush and set these very high expectations and then left it to be. There is an incredible disparity across New Zealand for disabled people in terms of the services and support they can access. That’s clearly unfair and it’s not sustainable at the moment. The first thing we have to do—in answering the member’s question about Enabling Good Lives, our Government is committed to the vision and principles of Enabling Good Lives. What we are doing at this point in time is stabilising the system before we seek to improve it. For those of you who have been involved with a business or an organisation that is broken and failing, job number one: stabilise it—stabilise it. That’s what we’re doing with urgency.

The independent review panel made some recommendations. One of them was to maintain the level of funding to residential providers at last year’s rate while a rapid review into pricing can be undertaken to understand why, despite there being fewer people in residential care, the increase in costs is over 30 percent—right? Understanding what is driving the increase in costs is pretty fundamental in stabilising the ship, and that is exactly what we are doing.

In terms of the funding allocated for Enabling Good Lives—yes, as I said, job number one is stabilise the system. That is why we have had to set up a task force; they have a range of work. Two of the future pieces of work that members will be really interested in are looking at flexible funding, looking at the guidelines and what the rules should be. This Government fully understands the value disabled people place on choice and control and flexibility, which is why, with these recommendations, it is absolutely critical that we understand and can decide, together with disabled people, organisations, families and carers—

Hon Priyanca Radhakrishnan: Too little, too late.

Hon LOUISE UPSTON: —what those rules should be. “Too little, too late.” Well, actually, that former Minister should have made sure the organisation was set up to be successful, because disabled people have paid the price for that, and I think that’s really unfortunate.

What we are committed to doing is fixing the system, getting to a place where disabled people have greater access, fairer access. We are targeting the support based on those who have the highest needs.

I also want to address the issue of creating a stand-alone ministry. So instead of Whaikaha - Ministry of Disabled People—

CHAIRPERSON (Teanau Tuiono): Do you want another call?

Hon LOUISE UPSTON: Mr Chair.

Teanau Tuiono: The Hon Louise Upston.

Hon LOUISE UPSTON: Instead of it being a departmental agency in the Ministry of Social Development, it will be a stand-alone ministry. I’m actually not quite sure why the previous Government didn’t do that in the first place. If they want a strong advocacy group, that’s what they should have done. I’ll be really excited to be working with and seeing the results we can provide together with Whaikaha.

Thank you, Mr Chair. A couple of questions, but, firstly, I’d just like to pick up on the issue of the minimum wage exemption scheme, and I congratulate the Minister for recognising the value of those disability enterprises projects. As someone who has visited on a number of occasions and seen the value that those workers give—those disabled people—it is actually quite uplifting to go in there and see the self-esteem and the purpose that it gives to their lives. Making sure that those enterprises are able to carry on, I think, is absolutely critical, and I commend you on your position on that.

The main point I wanted to make—because you have traversed that matter a little bit—was the juxtaposition of the situation you inherited where we previously had very low unemployment yet massively increasing jobseeker numbers. Now, something must have been broken there, Minister, for that to have happened. To quote my colleague Shane Jones about the nephs on the couch, there were too many nephs on the couch. I have been, as the Minister for Rural Communities, out and about all around the country, and one of the things that I’m stunned about is often, when I’m going to, normally, primary industries—horticulture, particularly—seeing the number of recognised seasonal employer workers, often in iwi-owned organisations.

Something is broken in that system, and it’s not just iwi-owned. Something is broken in the system when we have the increase in the NEETs and the job seekers and when we have opportunities that are going begging, actually, and I know that you have taken some steps to address that and I would just like you to illuminate us on that, please.

Thank you, Mr Chair. Just highlighting some of those quickly, because I know my time is limited, the first thing we did was actually set the expectation that there would be rights and responsibilities and that those who were receiving jobseeker support would need to fulfil their responsibilities—i.e., their work obligations. That was one of the first things we did.

As I said—I’m not sure if the member heard me say it earlier—it’s really exciting to see with the changes that we have made to date, including the introduction of the traffic lights and the use of obligations and consequences, an increase of 1,500 people exiting the jobseeker benefit into work. That’s 1,500 more than at the same time last year, and yet look at the economic conditions we’re in today. I think that’s a remarkable result, and I’m very proud of that.

I just want to clarify: earlier, I asked a question about the additional 26,000 people on benefits since the Minister took office and I asked how many more children are forecast to be in poverty as a result of that. She used a figure of 50,000. I just want to clarify whether the 50,000 additional children forecast to be in poverty are a direct result of there being a lack of work and more people on benefit, or if there are other reasons as well for that. I also want to know what the measure is that the Minister is using when she refers to child poverty—whether it’s before housing, after housing, or if it’s material hardship—so we can understand that a little bit more and, also, within what time frame is the Minister talking about with respect to those child poverty figures and that increase?

Just off the back of some of the disability related questions in the House, I also want to put to the Minister that it is very difficult to understand what is going on when we are told one thing by the Minister and the experience of disabled people and disability organisations is completely different. I want to know from the Minister why it is that she continues to say in the House that there is no funding freeze, that disabled people are getting more funding to support them and more access to services, when disabled people and disabled people’s organisations are telling the media and are telling politicians in the House that that is simply not the case, that their access to support has been frozen, and that they are no longer able to access some of the supports that they were previously accessing. I want to know from the Minister why there is such a difference between her perspective on how well off disabled people are under her watch compared to disabled people’s perspectives.

Addressing the child poverty one: we don’t forecast the number of children in material hardship.

Ricardo Menéndez March: You actually do.

Hon LOUISE UPSTON: The figure that I referred to, the increase of 50,000, was actually an increase of 52,000, and that was the number of children in benefit-dependent households that occurred after the last six years. We don’t forecast an increase in the number of children growing up in benefit-dependent households; it increased by 52,000 children under the last Government. Unfortunately, our child poverty measures—the three primary measures—have gone backwards. In terms of the measure that we will focus on, it is material hardship, and we have set a target of 11 percent. It is 12.5 percent at the moment. That is 17,000 children that our Government will lift out of poverty.

In terms of the increase of disability funding: as I said, a record level of investment, $1.1 billion. Some of the change that’s occurring at the moment—well, one of them actually is that budgets have been put back in place for needs assessors and for the Enabling Good Lives sites. They always had budgets; sort of four or five years ago, the budgets were removed. Nobody could tell me why they were removed. That’s a concern in and of itself but also speaks to why, unfortunately, the ministry then got into such a financial mess.

In terms of the changes, the $1.1 billion obviously hasn’t flowed through to disabled people yet because we are undertaking the rapid review of residential pricing and recommendations five and six, which were very well published when we announced the findings of the review; that is the work that needs to occur over the next few months with disabled people.

I’m going to once again try to ask a straight-up question that I haven’t gotten an answer to or it hasn’t been addressed, and that is how exactly would it have resulted in job losses if the Government had gone ahead with the wage supplement meant to replace the minimum wage exemption? The Minister has completely glossed over this very simple question. She keeps talking vagaries about concerns from providers; she hasn’t been able to substantiate exactly what they were. She keeps also referring to potential job losses. I want to ask: how would going ahead with the wage supplement to top up the wages of disabled workers to bring them from $2 an hour, in some cases, to the minimum wage have resulted in job losses?

If there hadn’t been any projected job losses as a result of going ahead with the wage supplement, can she then tell us, finally, that the reason why she decided to cut the wage supplement is to pay for tax cuts? So far, she hasn’t been able to substantiate exactly how it would have resulted in job losses, and I think people deserve to know this. They deserve straight-up answers, rather than this continuous, vague rhetoric about concerns for providers, when she didn’t even consult, as a Minister, with any of these providers, let alone with disabled workers. Our communities deserve a straight-up answer from a Minister that keeps ignoring the voices of disabled people.

That member may not be aware that one of the jobs in Opposition is that you are preparing your policies to take into an election. In the 2020 election and the 2023 election, the National Party policy was to maintain the minimum wage exemption. Part of the job as an Opposition spokesperson is to go and meet with the sector, to talk to disabled workers. I have two organisations in my electorate, so I’m a frequent visitor to both of those, talking to the organisations, talking to the disabled people that are there, talking to their families. I’m very confident in our position.

Why can’t the Minister tell us how going ahead with the wage supplement would have resulted in job losses? She has alluded to that before, so either she didn’t do her homework in Opposition or she hasn’t been straight up with the House about how exactly lifting the wages of disabled workers by topping up employers would have resulted in job losses. She’s insulting the intelligence of people in this House by skirting around this answer and not giving straight-up information, so I’m going to ask again a quite straightforward question: how exactly would we have seen job losses if we had gone ahead with the wage supplement to replace the minimum wage exemption?

I’d like to pick up on that, and I too want to ask the Minister—because I asked this once before and there was no actual response, even though the Minister nodded at the time—where is her evidence? Where is her evidence? It was National Party policy prior to the election to maintain the minimum wage exemption—why? Where is the evidence that jobs would be lost, as the Minister has said—on record—given that Aotearoa Disability Enterprises can’t actually back that up? All they wanted to see was the detail of the policy that she has now scrapped. Where is the Minister’s evidence?

Where, also, is the Minister’s evidence that shifting Disability Support Services (DSS) from Whaikaha to the Ministry of Social Development will result in better outcomes for disabled people? Where is that evidence? That was not in the review, and the sector wants to know. These are questions that the disability community—is this a policy that the Minister’s dreamt up? If not, where is her evidence?

Also, given what the Minister said just previously to questions asked about the shift of DSS and the review and the gutting of Whaikaha, why did the Minister choose not to top up Whaikaha’s funding—as previous Governments have done—work in consultation with the disability community in accordance with the motto “nothing about us, without us”, which has been out the window by this Government, frankly? Why did the Minister choose not to strengthen Whaikaha if she’s placing all of this blame on the fact that the previous Government set up Whaikaha quickly?

Let me just point out that the disability community gets why it was set up quickly. That was because we wanted to ensure that there was no dropping of services or disabled people didn’t fall between the cracks as the Government got their act together. It was set up quickly—they get that; this Minister does not seem to get that—but the next steps were to then strengthen the functions and the financial structures of Whaikaha. Why did the Minister choose not to do that and instead to gut the very ministry that disabled people have fought for?

Why is there no transparency, also, between the announcement the Minister made on 15 August—which talked about a vague funding freeze but did not actually state that the wait-lists of residential care facilities would now be out the window, and that only people who are out of prison, out of mental health units, occupational therapy placements, or needed severe physical care would get a placement—why was she not transparent about that? Why was that sent in operational guidelines to agencies without so much as an announcement by this Minister? Quite a few questions there, Minister, and we’d like some answers.

I’d just like to put on the record of the House the findings of the independent review of the disability support service (DDS), the intention of which was to strengthen its long-term sustainability. It made six findings: “(1) Delivery of DSS is inconsistent, (2) The DSS 2024/25 appropriation will be breached if spending is not controlled, (3) There is inadequate budgetary control and commercial rigor, (4) The two areas of largest cost growth are flexible funding provisions and residential facilities-based care, (5) The new departmental agency is not set up in a manner that enables it to manage effectively the nature and scale of its appropriation, (6) Current policy settings and service design do not allow the Ministry to administer and deliver DSS effectively”.

There are, of course, a number of options available when you receive findings that are as stark as that. What we needed to do, as I said before, was to stabilise the system and to make sure there wasn’t the level of disruption that occurred to disabled people with the changes in March, and that was my commitment. It would be great not to be in this position. At the time of the release of the findings of the review on 15 August, a number of documents were published, so I did a full media conference, I put the press release out, the full report of the independent review panel, the Department of the Prime Minister and Cabinet stocktake—which was released before the election, which also highlighted significant issues—and also a report called the Link report, which had dire findings in terms of the ministry’s financial capability and position. It required urgent action, and that’s exactly what’s been taken.

The previous Minister may not understand the changes that have been made, but the reality is that through the period of the independent review panel, I met with disabled people, with their families, with carers in their homes, in their residential settings, with providers, with disability organisations—you name it, I met with them during that time to make sure. What they’ve said to me was that the system is too confusing and it’s not consistent. We want to make sure that it’s sustainable and we want to make sure that those with the highest needs get their needs met.

Thank you, Mr Chair. If I could just take this opportunity, with your indulgence, to acknowledge that this is Aotearoa New Zealand Social Workers’ Day and acknowledge the hard work they do.

My question to the Minister is: what changes has the Government made to reduce the number of New Zealanders who are reliant on the jobseeker benefit, given that $4.4 billion was allocated for it in the Budget?

I’ve been able to traverse some of those. One of them that I wanted to just put on the record of the House, with thanks to that member for his question, is the employment investment framework. I referred to one of the components of that, which was to make sure that employment programmes that are funded by taxpayers are focused on those who are actually on the jobseeker benefit because—surprise, surprise—many of them weren’t.

The second is absolutely and resolutely to focus on young people. What we do know from the Taylor Fry report is that young people who go on to the jobseeker benefit under the age of 25, their future years on benefit is 19 years—19 years, and 23 if they’re Māori. That is unacceptable. We’re focusing on young people and getting support to them earlier. The third one was to expand case management, which is one of our most effective employment initiatives, to 70,000 people.

I just want to know why the Minister made the decision not to include any disabled people on the panel that did the review of Whaikaha - Ministry of Disabled People, given the motto that has been used already in this House, “Nothing about us without us”, and how can the Minister expect disabled people and disabled people’s organisations to take that review seriously, given that they weren’t even given a seat at the table to give their perspective?

The other day in the House, and I think this is important to refer to as well, we had an acting Minister in place—that was Minister Penny Simmonds, which seemed a bit mean as far as I’m concerned; I’ve never seen a Minister displaced from a role and then made to do the acting position in the House during question time—talk about the funding and say very clearly that there was no funding freeze, however, acknowledged there was a funding pause. I want to know from the Minister, what is the difference between a funding freeze and a funding pause when it comes to Government funding for agencies and for services?

I don’t have much time, so I’m going to change topic very quickly just to get these questions in as well. These questions are about Te Pae Tawhiti and business transformation at the Ministry for Social Development. I want to know from the Minister for Social Development and Employment whether or not that business transformation programme is going ahead. I want to know from the Minister for Social Development and Employment what was budgeted for at the last Budget for business transformation, what we can expect in terms of change that will support our welfare system and the Ministry for Social Development to be able to support New Zealanders, and the risks if the investment is not put into place for the system and its ability to hold up.

Also, recently I think I saw that there’s no one in the role of deputy chief executive for business transformation; what does that mean for that programme of work? Is that because the programme of work is stopped, or will there be delays in that work because of the fact that the leadership isn’t there and also because of the lack of investment, funding, and prioritising by the Government?

The member raises an important project that is well under way at the Ministry of Social Development, and that is Te Pae Tawhiti. One of the things that was kind of strange when I came into the role was to find that a nine-year programme of work that was broken into three horizons of three years was only funded for two of the first three years, which was a bit strange. I can reassure the member that the programme is working well; we have a fantastic team of specialists who are working on Te Pae Tawhiti.

How, as she has claimed before, would going ahead with the wage supplement result in job losses?

Mr Chair.

CHAIRPERSON (Teanau Tuiono): Ricardo Menéndez March.

RICARDO MENÉNDEZ MARCH: How exactly would going ahead with the wage supplement result in job losses, as she has claimed before?

Mr Chair.

CHAIRPERSON (Teanau Tuiono): Ricardo Menéndez March.

RICARDO MENÉNDEZ MARCH: Will the Minister actually front up to the public and explain, as she has claimed previously, how going ahead with the wage supplement will result in job losses? Or will she just continue staying silent, pretending that that assertion has any factual basis?

Mr Chair.

CHAIRPERSON (Teanau Tuiono): Ricardo Menéndez March.

RICARDO MENÉNDEZ MARCH: Why is she refusing to answer my questions as to why going ahead with the wage supplement, as she is claiming, will result in job losses?

Minister, one of the things that we have seen coming out of COVID and out of Cyclone Gabrielle and other adverse events where the Ministry of Social Development (MSD) sort of strode in and had to pick up the pieces was that some of these work programmes and initiatives that you’ve got behind—even though some of them have been thrown together quite hastily—have actually worked. Also, some of the other probably longstanding entities that have had a degree of MSD support, and I’m thinking, in the rural communities, actually, of the rural education activities programmes (REAPs) and the like.

I’m just wondering what your vision is for those, because—particularly the REAPs—they have, as I say, longstanding networks. They’ve got a proven track record. I have seen, as I hope you’ve seen too, they’ve got a recent impact report done that shows they’re returning $4.90 for every dollar invested, which is quite impressive, and that work is being undertaken by Sir Bill English’s ImpactLab, which is quite a reputable outfit.

One of the things that I find a little bit problematic with some of this stuff is that MSD does some good work in supporting it, the Ministry of Education does part of it, and sometimes the Ministry of Health is involved in some of these things as well. There’s a lot of cross-party stuff that goes on, which actually can make it quite difficult for some of these organisations, and I’m sure that’s not the only organisation that’s in that boat—so just some thinking around how you would support some of those programmes that are doing great work out in our communities.

I thank the member for his question, and one of the things that our Government has been really clear about is that the way to have a greater impact on New Zealanders’ lives is when you have the Government, community organisations, and business lining up together. I have met with a number of rural education activities programmes (REAPs) over my time as Minister. They do do really important work, and I understand the frustration when they have contracts from a number of different Government departments.

One of the pieces of work that we have picked up from the previous Government is their social sector commissioning so that we’re able to really look at how we simplify it and have longer-term, higher trust relationships with providers. The REAPs would be one that springs to mind and are an example of how Government, community organisations, and businesses line up with the community job coaching, of which there’ll be 2,100 places. The Government is funding it, obviously, through MSD, the community organisation provides the job coaches, and the business provides the employer opportunities, and that’s how we’ll get more people off welfare and into work.

Why did the Minister make claims previously that going ahead with the wage supplement would have resulted in job losses and now she is quiet when asked to substantiate those claims and explain how?

All right. I’ll try another question. Mr Chair.

CHAIRPERSON (Teanau Tuiono): Ricardo Menéndez March.

RICARDO MENÉNDEZ MARCH: What is the projected decrease in the number of people on the jobseeker benefit from the changes to re-applications which mean people have to apply every 26 weeks now?

Members, the time has come for the dinner break.

Ricardo Menéndez March: There’s five minutes.

CHAIRPERSON (Teanau Tuiono): We will resume—just to acknowledge that the debate started early, so members, the time has come for the dinner break. We will resume the debate at 7.30 p.m.

Sitting suspended from 5.55 p.m. to 7.30 p.m.

Good evening, members. Members, the committee has resumed. Before the dinner break, we were debating the Appropriation (2024/25 Estimates) Bill. There are two hours and 34 minutes remaining in this debate, and I thought it was worth going through the timings. New Zealand National has one hour and 12 minutes, New Zealand Labour has 31 minutes, the Green Party of Aotearoa New Zealand has 14 minutes, ACT New Zealand has 13 minutes, New Zealand First has 22 minutes, Te Pāti Māori has 19 minutes, and Darleen Tana has three minutes.

Members, we now have the Minister of Transport. The Minister is available to speak to the portfolio from 7.30 to 8.30 p.m.

Transport