Estimates Debate — Social Development and Employment

Thank you very much, Mr Chair. I rise to speak on the beginning of this Estimates debate on Social Development and Employment as the chairperson of the Social Services and Community Committee.

Vote Social Development is the largest Vote in Budget 2025. The Vote funds many social services including income support, student loans, emergency housing and support, and disability support. In 2025/26, the appropriations sought for Vote Social Development totalled $45.33 billion—that’s over $45 billion.

The appropriation of Vote Social Development comes under seven ministerial portfolios. The Ministry of Social Development administers the Vote. The Minister for Social Development and Employment is responsible for 94.6 percent of the Vote, with appropriations totalling $42.829 billion, including benefits or related expenses.

Five other Minsters have responsibilities for appropriations of the Vote: the Minister of Revenue, the Minister of Housing, the Minister for Veterans, the Minister for Youth, and the Minister for Seniors. As part of our consideration of the Vote Social Development, our committee held hearings with the Minister for Social Development and Employment, the Hon Louise Upston; the Minister for Youth, the Hon James Meager; the Minister for Seniors, the Hon Casey Costello; the Associate Minister of Housing, the Hon Tama Potaka; and the Associate Minister for Social Development and Employment, the Hon Penny Simmonds.

This is obviously an incredibly important Vote for the people of New Zealand—a very significant part of Government expenditure. It is good to have a debate about these Estimates here in the Chamber today. With that, I will conclude my contribution.

Thank you, Mr Chair. As I said in the Estimates hearing in June, my highest priority is supporting more New Zealanders into employment while at the same time ensuring that those who do need support are able to draw on State support when they need it. I’m committed, of course, to the Government’s target of reducing the number of people on the jobseeker benefit by 50,000 by 2030. Our Government is focused on supporting people on welfare into employment and therefore providing with them with the opportunities that work provides, because the faster we can help beneficiaries find sustainable employment, the better outcomes they have for themselves, their families, our communities, and, also importantly, our economy. It’s part of the Government’s commitment to boost growth and with a key emphasis on maximising the potential of New Zealanders and developing the talent of our people. I’m conscious we’ve only got a short time, so I’ll provide some brief opening statements before going to questions.

Through Budget 2025, Vote Social Development received funding in key areas that align with our priorities while also reducing expenditure and delivering services more efficiently. If I look for a moment at the focus, clearly, of reducing the number of people on jobseeker support by 50,000 to 140,000 by 2030. We’ve also confirmed the multi-year transformation programme, which is called MSD—services for the future. It’s about improving services to New Zealanders who need assistance.

Some of the key investments are as follows: 490 front-line staff in employment programmes to help get more people into work, adding a parental assistance test to determine eligibility for jobseeker support and emergency benefit for 18- and 19-year-olds, updating automated decision-making using the Ministry of Social Development’s (MSD’s) processes, improving both the accuracy and integrity of MSD payments, and also changes to the accommodation supplement. We’ve improved redress for survivors of abuse in State care, including increased payments. Other key areas include the continuation of supporting national and regional food distribution infrastructure and community food provision, and we’ve continued the important funding for Kickstart Breakfast programmes and KidsCan jackets for two years.

I want to talk briefly about the Employment Investment Strategy, which will run through to 2028. The strategy guides decision making about which clients to allocate to employment support and which programmes to invest in based on people’s employment support needs, evidence of what works, and their distance from the labour market as well as value for money. It supports MSD to be more targeted and efficient with the investment to help achieve our priorities for employment. This strategy will support MSD’s front line to shift investment through allocation of clients to case management, and employment interventions under the improved employment and social outcomes support multi-category appropriation.

As expected in the current economic climate, the overall number of people receiving a benefit has increased ahead of a forecast decrease from December this year. However, our focus on employment and proactive staff engagement is helping more people to move into work. We’ve seen more than 80,700 people moved off welfare and into work in the last financial year despite these challenging times. There is, of course, more work to do, and we’ll continue to help people overcome the challenges to prepare for and find a job. Thank you, Mr Chair. I’m happy to take questions.

Thank you, Mr Chair. One of the major problems we’ve got in the country at the moment, and have had for some years, is a problem around Māori and Māori unemployment. When we were in Government it was running at nearly three times what the average rate was, and we were able to bring that down. This Government has still got it at just over double what the general rate is, and it’s very concerning.

I would like to know from the Minister: what’s the plan in terms of Māori unemployment? Is there going to be a focus on some of the targeted programmes that the previous Government brought to the table—obviously, Mana in Mahi was one of those major programmes. Māori Trade Training was a major investment from the previous Government. Has she considered reinvesting into and boosting Māori Trade Training, which delivered 63 Māori-led projects and supported over 4,000 Māori across Aotearoa?

I’m just opening up with those questions in terms of what the Government’s overall plan is—because I never heard that in the Minister’s introductory remarks—in terms of Māori unemployment and boosting Māori in employment.

I thank the member for his question, and, as we’ve discussed in this House before, unfortunately, when we have a labour market the way it is, Māori are disproportionately affected. What I would say is that what we’re seeing in the numbers between those aged 18 and 24 coming on to jobseeker benefit is that, actually, the number of Māori coming on is less than we might have expected in terms of that proportionality, so that is positive. The investment strategy, with investment in initiatives like Mana in Mahi and He Poutama Rangatahi, is absolutely focused on young Māori and Pasifika. I’ll also add that Budget 2025 will mean that every young person under the age of 25 on the jobseeker benefit will be in case management.

Thank you, Mr Chair. First of all, I just wanted to comment on the Minister’s initial remarks. I find it incredibly rich that she both talks about her focus of getting people into employment while yet her own Government is cutting thousands and thousands of jobs—intentionally so, despite not needing to do so.

My question’s related to the advice that Treasury gave her in relation to the tightening of the eligibility for jobseeker supports who are between the ages of 18 and 19. At the time that the Budget initiatives were going through, Treasury actually said that this should be deferred to next year’s Budget because the savings would be highly uncertain as there’s little data on the number of young people who may be affected, and that this change would also have several perverse incentives as it’s currently designed. What are these perverse incentives that Treasury warned her about, and does she agree with Treasury that the savings coming from this initiative would be highly uncertain?

This is no small feat that we’re talking about. This is about restricting access to some of our youngest and most affected, at the moment, by unemployment, alongside Māori and Pasifika; we’re talking about young people here who are struggling to get access to entry-level jobs. If the Government is going to be making it harder at a time of high youth unemployment to access these benefits, I would like some answers in relation to the advice that Treasury gave her in relation to the savings but also around the several perverse incentives that are created by this policy—can she name them?

I’m pleased the member raised the 18- and 19-year-old policy, because it gives us the opportunity to talk about the intention behind it. The intention, which I’m assuming members opposite would also expect, is that every 18- and 19-year-old in New Zealand is in further education, further training, or in a job, and that going on welfare isn’t the first option to them. That’s the intention of it. Treasury, in many of the Budget savings, will say that the level of savings is uncertain. That is no different from this proposal. What I will say is the member will need to wait only a little bit longer to hear the final policy settings of the 18- and 19-year-old policy.

Thank you very much, Mr Chair. Now, moving on to one of the savings that will start coming in in this Budget—despite the announcements being made last year, the legislation was introduced during the Budget process. It is in relation to the tightening of access to the accommodation supplement for people who may be receiving the income-related subsidies who may have boarders, for example, or who may be in private rentals. Does she agree with the advice that the Ministry of Social Development (MSD) gave her that this policy will leave people worse off, on average, by $100 each week, and does she also agree with the advice that shows that the disabled, Māori, the young, and the old will be disproportionately impacted by this policy? What message does she have to old people, young people, disabled people, and Māori, who, as MSD has noted, will be disproportionately left worse off as a result of these changes?

As I’ve said previously when we’ve debated this legislation—which is a Budget 2024 measure—the changes to the boarder contribution are about making the system fair, transparent, and equivalent. If somebody is receiving income from a boarder, that will be counted in terms of the housing assistance that they are eligible for. It is a simple step that is about making the system fairer. I accept that in this policy there will be some people who were receiving income from one and two boarders, and now their housing supplement will be affected. We appreciate that and we accept that, but what we need to do is ensure we have a system that is fair and has integrity.

Thank you very much. When the Minister for Social Development and Employment talks about fairness, does she think that it is fair that some of these people may be left in even deeper poverty and may be requiring additional assistance from Work and Income, and, if so, does she think this undermines the supposed savings that she’s trying to make through this initiative?

Thank you, Mr Chair. Following on from what the Minister has just said, does the Minister accept that the impact of our youth unemployment is much more extreme, and can she give the latest numbers for 18- to 20-year-olds unemployed and 20- to 25-year-olds unemployed?

Can I also know from the Minister: is she concerned that such high youth unemployment will have long-term consequences on the mental health of those people who are unemployed at a time when they are forming their careers, their future careers? This is a critical time in their lives, and has she considered the impact on that, both economically and in terms of mental health?

I’d also like to know from the Minister—she came into Government at a time when Labour had the highest employment rates. That was something that we could be extremely proud of. How many more unemployed people are now requiring jobseeker benefits today than when she took over in November 2023, and what does that cost the country? There have been promises made about reducing the number, but my understanding is we are 26,000 more on the lists than we were. That seems to me to be an extremely worrying statistic, but it also seems to be one that would come with enormous cost.

Does she accept that those people that are on the jobseeker benefit today are there because they are legitimately unemployed due to the downturn in our economy engineered by this Government? If that is the case, if she accepts that they are legitimately unemployed—and I see the Minister’s expression and I accept that she might not accept the second part of what I said, but she can actually answer the first part, which is: does she think that those people that are unemployed now are there because of their own fault, or is it through no fault of their own, given that she accepts there’s been a downturn, in which case, why has she moved into a mode of penalising those people?

What I want to know, for those people today who face really high costs of things like butter and the cost of registering a car and the cost of energy: what are they actually receiving from this Government if they’re on the jobseeker benefit? I don’t think a lot of New Zealanders know just what that looks like for the average person. What do they get, and has it been inflation-adjusted for those very things that I said—energy, for the cost of food, and for the cost of things like car registration? Have they had more as those costs have gone on—is that part of the equation? Actually, has there been an inquiry made as to whether they can actually live on what they’re on? Can they make ends meet? I’ve got more questions for the Minister, but I’d thank her for an answer for these first.

I’m not going to go into an economics class about how the economic recession got created. I think most people know that, and it’s been debated in this Chamber. I’m more than happy to answer the question, but I’m also going to refute outrageous statements that were made by the member prior.

As of the end of June, there were 48,200 people on the jobseeker benefit between the ages of 18 and 24, which, of course, is an increase from the previous year. What we saw under the last six years was an increase in the number of years that that age bracket would be on benefit throughout their lifetime—18 years—which we are totally unwilling to accept. That’s why, as I said, Budget 2025 and the Employment Investment Strategy means that every one of those young people will be in case management. That is the most successful programme. That’s why we are investing in it—to improve their opportunities of being in employment. While it is challenging at the moment, we want to ensure young people are using this time to prepare and get ready as the economy grows again.

Thank you very much, Mr Chair. I have a series of questions, all in and around the youth figures. Recent statistics out yesterday from Stats NZ show there’s 19,000-plus fewer jobs filled by 15- to 24-year-olds. What I’d like to know from the Minister is what plan does she have or what solution is she offering for those young people who might go through a training course or receive some extra support but there’s no job to go to? In that space, what solutions does she offer, particularly those that are in that 18- to 19-year-old bracket, which aren’t impacted yet but soon will be by no longer being able to receive the jobseeker benefit? What specific solutions are in place for young people who have gone through training but have no place for work?

As I said, that age bracket is a concern, because we know their lifetime years on benefit have been increasing, and we want to pull that back. We want 18- and 19-year-olds to be in further education, training, or in employment, and we know that as the economy grows, it creates more jobs—the level of investment in infrastructure projects, for example: 240,000 new jobs expected. These next few months are challenging. The 18- and 19-year-old policy doesn’t come in until 1 July 2027. That’s what we announced in the Budget.

I just would remind the committee—and it’s what most people will expect—that 18- and 19yearolds will be the responsibility of their family first, as opposed to just this idea that the best life is to go straight on welfare. We’d be encouraging them to go into further education or further training.

I neglected to answer the question of the previous member about increases to welfare payments because of inflation. They are annually adjusted with the Consumers Price Index.

I’ll reframe it again for the Minister, because I listened very carefully and I did not hear the answer to my question, which was: if there is a young person in New Zealand that has gone through training and education but does not have an offer of employment that they’re able to take up, what is the Government’s solution to situations such as that? Are they going to take up some more training? Are there incentives by the Government? Is there any action or plan in place for young people who have gone through training but have not managed to secure a job like the 19,000 over the past 12 months?

I did answer that. I answered that very clearly: further education or training, infrastructure investments, bringing 240,000 additional jobs, and parental responsibility.

Thank you, Mr Chair. Thank you, Minister. I will be sticking with the tightening eligibility 18-19 piece, if I could. Now that Budget 2025 forecasts over $325 million in savings by restricting benefit access to 18- and 19yearolds—I’ve got a couple of supplementaries after this—how will the Government justify this cut when it disproportionately affects rangatahi Māori, over 4,500 of whom currently receive support? Can the Minister provide an update on the development of the parental assistance test and whether Māori advisers or youth advocates or other Māori—smart people, like me—have been involved in its design to ensure cultural appropriateness? Will the Minister confirm whether young people will be denied support if their parents refuse to complete the parental test, and how does this protect the rights and wellbeing of vulnerable rangatahi?

The final question, if I may, Mr Chair, is: what safeguards are in place for rangatahi escaping unsafe or unsupported home environments where parental means cannot or should not be tested? Thank you.

As I said in answer to one of the previous members’ questions, more detail will be available on that shortly. Some of those issues are exactly what is being considered in the detailed policy assessment. Let me just say again that this policy is about ensuring 18- and 19-year-olds are in further education, training, study, or employment. What we do know—I know that members opposite would be deeply concerned when we quote these figures—is that for a young person to go on to a benefit under the age of 25, they spend 18 future years of their life on welfare. None of us want that, so we are looking at new interventions to reinforce an expectation that, actually, most people in this Chamber would have been raised with—that when you come out of your secondary schooling education, further education, or further training, you get a job. That’s the expectation our side of the Chamber wants to set. We are aspirational for young people; we’re aspirational for young Māori, and we want them to have a life of opportunity and choice, not one trapped on welfare.

Thank you, Mr Chair. I just wanted to follow the member Mariameno Kapa-Kingi’s line of questioning over there, because I think, with respect, that the Minister has been a bit vague in terms of her responses with regard to Māori employment and Māori unemployment, and I do want to know this. We’re still trying to get our heads around why, when unemployment was on the rise and was dramatically rising for youth and Māori, she cut Māori trade training at Budget 2025, particularly given that Māori trade training, as we know, has had a significant impact in terms of young people right around the country. It confuses me that something so successful was cut by this Government. That was something that was embedded in in a couple of generations, actually, and I was able to bring that back when I was a Minister. Something that was so successful was cut by this Government, and we’ve never really had any answers on that.

I also want to ask the Minister whether she is able to break down for us Māori, Pasifika, the over-65s, youth, people in their own homes—are we able to get some details in terms of those who are needing the accommodation supplement? We seem to be lacking in the detail which would really help in terms of any overall plan from this Government. In terms of Māori, again, can I ask the Minister: does she have any details in terms of how many Māori are on a main benefit since she took over in this position?

I would ask that member to ask his question again about the accommodation supplement, but let me answer the others first. As at the end of June, there were 406,100 people on main benefit. Of that, 148,539 were Māori. In terms of the increases over the last year, the total percentage was 6.6 percent, and for Māori, it was 5.7 percent. The increases are lower, and that’s why I made that comment before about the under18 to 24-year-olds.

In terms of the Māori trade training, we made the decision to end that. It was a programme that was brought forward in terms of a response to COVID. As we have done in many instances, we have ended funding for things that were COVID-related, and we clearly never saw the levels of unemployment—thank goodness—that were forecast at the time. What we have done is invest in the most intensive programme that is available and that we know has the greatest success, and that is case management. As I’ve said, every 18- to 24-year-old will be in case management.

Well, that’s very sad to hear that type of response in terms of Māori trade training. As I said, it was a programme that was acclaimed by everyone no matter what their political affiliations were. I just want to come back to the question that the Minister asked—she asked me to reframe that question. The question is: how many more people have needed the accommodation supplement since she took over? Can she break that down for us: Māori, Pasifika, over 65, and youth—are there any numbers in regards to that? While we’re talking about Pasifika, does she have any numbers in terms of Pasifika on jobseeker support since she took over? It would be good to get a response on that. But back to what I was saying on Māori trade training: I think that’s one of the biggest mistakes that this Government has made.

Thank you, Mr Chair. In response to the questions by the Hon Willie Jackson regarding Māori trades training places, he will be pleased to know that in the tertiary education space, we have increased the number of youth guarantee places by 175 places per year, where that wraparound support and additional care of the students is absolutely imperative to the success of that training. So those 175 additional youth guarantee places are certainly most useful in that space.

In terms of the 18- to 24-year-olds, the option is either case management or contracted services if they’ve got work obligations, which could be part-time or full time. I’m happy to answer the question around accommodation supplement. I don’t have that data on me. If you wouldn’t mind, please, putting that down in writing, and we could get an answer to you.

At a time of high inflation, more people sleeping rough, and front-line organisations talking about the struggle of the high cost of living, what we have seen since this Budget is a record number of people—at least the only other highest number we’ve seen is in September 2024—being declined for assistance. In fact, in the latest quarter, June 2025, under her watch and after this Budget, we’ve seen the highest proportion of people on the benefit being declined for assistance for something like an advance. An advance is something that can help you sustain your rental, pay your bills, have enough clothing so that your children do not get sick. How does the Minister justify seeing, under her watch, the highest proportion of people and applications being declined for assistance that is lifesaving for many?

Following up on that, does the Minister have any information on who is most disproportionately impacted by this record proportion of people being declined for assistance such as advances, and has she made any directives, received any feedback, or passed on any feedback to the Ministry of Social Development on this issue? This is real, because people on the ground are telling us that they’re facing more declines for basic things that they need, and the data is clear that a greater proportion of applications are getting declined under her watch. What is the reason for that?

Let me just go back and answer the question around Pasifika: the number of 18- to 24-year-olds on the main benefit is 7,047. That was just to answer the Hon Willie Jackson’s question.

In terms of advance payments, I have not made any directives to the Ministry of Social Development around advance payments. We are experiencing challenging economic times, and some of the measures that we have done in Budget 2025, for example, are to ensure that people aren’t getting overpaid so that that lends to a debt. One of the challenges with advance payments is it then creates further financial difficulties further down the line. I want to assure the member I have issued no directive around advance payments.

Thank you, Mr Chair. I’d like to ask the Minister a little bit more about what she said concerning youth. She talked about this group of people who spend 18 years on the benefit. What I wondered is if she would accept that that was not apples with apples, because what you had when that was the number was the entrenched unemployed group, versus now, when the reason you have such high youth unemployment is because there are no jobs out there and these are the last people that will be employed because they have no job experience. Does she accept that this class of people is very different in that way and this is the opportunity for them to get work if work is available? The answer isn’t just training; it’s actually the availability of work.

Also, I would like an answer to my question about what it is actually costing the country to have the giant blowout of people on jobseeker benefit. I think that’s a fair question. I’d also like an answer to the question about how much people get on jobseeker, because I do not think that the public understand how little it is, and whether people can live off that amount that is there. I appreciate the answer about the adjustments that are made on the basis of the Consumers Price Index, but my question wasn’t that. It was: was it actually something that was adjusted in terms of the things I mentioned? Car registration was one, the cost of food was another, and I think I had a third thing—the cost of energy, which is, of course, huge. I think those are all questions that the New Zealand public would really like the answer to.

I also want to know from the Minister—we talked about the Government engineering this. I mention engineering this unemployment, because they wanted to kickstart the economy, as they saw, by bringing wages down. The Government changed the Reserve Bank mandate to exclude any concern for unemployment in its decision. I understood the logic of that to be that it would create lower wages in that situation, because lower wages were good for kickstarting the economy. Why does the Government punish the very New Zealanders who are victims of a faulty strategy? They become unemployed by their very own design—they want them to be unemployed so there are more people in the workforce and the wages go down—and yet they’re punishing them by sanctions and suggesting that 18-year-olds are somehow, in some habitual way, staying on the benefit for 18 years. Thank you.

Sorry, I need to correct the figure that I gave the Hon Willie Jackson: it was not main benefit; it was jobseeker.

Just going to the lifetime number of future years on benefit, because I think the House will be interested to know that in June 2017, for someone under the age of 25 who was on jobseeker support, their future years was 12.2 years—it is now 18.2.

Ricardo Menéndez March: Not continuous—they’re not continuous years.

Hon LOUISE UPSTON: No, it’s not continuous, it’s someone who goes on and off, but hopefully your maths will tell you that 12.2 is a lot less than 18.2, which just happens to line up with the six years that Labour was in office.

We are deeply concerned about young people being on the jobseeker benefit, which is why we are fully unwilling to accept that 18 years is as good as it gets. That’s why we are focused on very intensive programmes like case management to support them to have higher expectations for 18- and 19-year-olds.

To the member Helen White: Consumers Price Index (CPI) calculations are based on an average of household costs across a range of baskets—I’m not going to spend the time in this committee listing them. That is why we index to CPI the jobseeker benefit. For someone over the age of 25, the flat benefit is $361.32.

Thank you very much, Mr Chair. I’d just like to pick up from my questions before. I was asking the Minister specifically around the 19,000 fewer jobs for those young people and what the Government’s solution was to finding a place for them if there was no job there. The Minister’s answer was that her Government was going to create 240,000 new jobs. Well, I would just like to understand, from the Minister, how did she get that figure?

As I understand from previous comments that the Prime Minister has made, that’s over 4 years. Can she just confirm that the 240,000 new jobs her Government will deliver—how was that specific number arrived at? If she’s able to, what specific initiatives will produce those 240,000 jobs?

I’m not going to list the infrastructure projects that have been already quoted in this House around the creation of new jobs. One thing that’s very different about the Government we have today as opposed to the one that was outgoing in 2023 is we’re clear that it’s not the Government creating the jobs. We create the conditions for the jobs to be created as opposed to the Government creating them.

Is it correct that it is not the case that the reason why there’s been a greater proportion of declines for advances is that people have be put in a worseoff financial situation, which she alluded to in her previous answer to me, and that it could instead be because of a changing culture at Work and Income due to increased anti-beneficiary rhetoric? I say this because the stats speak for themselves.

There’s been an uptick of proportions of declines for things like advances. Her own answer to my questions in writing shows that it is not because people would be put in a worse-off situation but for a range of other reasons. Does she think it is fair for a greater proportion of people to be declined assistance at a time of high cost of living pressures and front-line organisations talking about increasing homelessness?

Thank you, Mr Chair. I just want to come into the sanctions area now. In terms of the culture, what communities are saying to us is that the culture, sadly, has changed tremendously given where we were a couple of years ago. We’ve always had a sanction system, but obviously imposing sanctions is difficult if children and whānau are involved. I want to ask the Minister, in terms of the sanctions area, what reports has she had of the checks and balances to ensure that some of our tamariki have not been hurt by these sanctions? Is she following through with a lot of the reports that we’re getting from whānau? How much have sanctions increased since she changed the sanctions regime? It’s a very punitive strategy that this Government has gone down. How many of those families are ones with children who have been punished by the sanctions strategy? Has an increase in sanctions correlated with a reduction in job seekers, which surely has to be the aim of any Government? This is an area of vital importance to our communities who have suffered through this terrible sanctions strategy that this Government is rolling out. Where are we right now? I ask the Minister if she could respond.

I’m proud of the fact that we have a much more active welfare system than when we took office. That is for a range of reasons. One of the reasons is the traffic light system, and 98 percent of those receiving benefit are at green, which means they know their obligations and they’re fulfilling them. I think that’s something we should all be really pleased about—0.6 percent at orange, and 1.1 percent or 1.2 percent at red. The number of people who are actually under a sanction is incredibly small, which I think is great news.

The other great news, of course, is that we introduced non-financial sanctions for the very reason that there was a concern for a blunt financial sanction where there are children in the household. There will be a review after 12 months, and the next two non-financial sanctions don’t come in until 1 October. That was very deliberate and about giving Ministry of Social Development case managers more options to have a sanction that was more suitable and appropriate to that family.

Thank you very much, Mr Chair. Just going back to those 240,000 new jobs, I am aware that the Minister has said that’s going to come from a range of infrastructure projects and she doesn’t want to list them out, but I would still like to know how she arrived at the figure of 240,000 additional jobs. I would also like to know: is she using job growth based on population growth? Now, she may want to take some advice from officials, but the Government must have undertaken some form of calculation to arrive at the figure of 240,000. I’m assuming they didn’t just make that up. If so, can she please explain: is she using job growth based on population growth to produce that figure of 240,000 more jobs?

Minister, is it factually correct that disabled people will be disproportionately pushed into deeper hardship as a result of the changes that she has made when it comes to eligibility for accommodation supplements for people who have boarders? If it is correct that disabled people will be disproportionately put in hardship from this change—I don’t think she’s listening to the question, but if it is correct that disabled people will be disproportionately affected by this, what is her message to disabled people affected by this policy?

Does the Minister accept that there’s a real possibility that the increase in sanctions may have led to an increase in previous beneficiaries not having enough food and seeking help from food banks, and this also may have led to an increase in beneficiaries becoming homeless? If so, what work has happened to track this correlation, and what advice has she been asked for or has she received about those issues?

Just in the interest of the Minister addressing and answering my question, is it correct that disabled people are going to be disproportionately impacted due to the changes she has made to the eligibility—it’s actually really hard to speak to the Minister when she’s talking to someone else. Is it correct that disabled people will be disproportionately impacted by the changes she has made to the eligibility of the accommodation supplement for people who have boarders, and that disabled people will be pushed deeper into poverty as a result of these changes compared to other groups? If so, what is her message to disabled people affected by these changes?

I’m not sure if the Minister for Social Development and Employment has answered my question, which is: has an increase in sanctions correlated with a reduction in job seekers? Further to that, many of our organisations, particularly community organisations, have talked to us about a dramatic increase in homelessness and the use of food banks. Does the Minister accept that there’s a real possibility that the increase in sanctions may have led to an increase in previous beneficiaries becoming homeless? It seems to be obvious as we go out there and see the results community organisations are responding to us about. Can I also ask the Minister: in terms of some of those community organisations, is she working closely with those organisations right now? Thank you, Madam Chair.

There’s been a number of questions around sanctions, so I would repeat what I said about a very small number being under red, which is when a sanction applies. It is really simple for someone to come off a sanction, and that’s for them to re-comply with their obligations. Just because somebody is at red, it doesn’t mean it’s a permanent state of things—they have options in terms of complying with their obligations. I will say again in this Chamber—because it tends to be misrepresented on frequent occasion—no one is sanctioned for not getting a job; they are sanctioned because they are not fulfilling their work obligations, which are things like going to an interview, having a CV, fulfilling their appointments with the Ministry of Social Development, and taking the necessary steps to look for, prepare for, and find a job. The sanction isn’t if they can’t find a job, and I said before that the new traffic light regime will be reviewed after 12 months.

Thank you. I still have not received an answer to the question about what the cost is of the blowout of 26,000 more New Zealanders not being in employment under the watch of this Government. I would really like that, and I’d like the Minister for Social Development and Employment to tell me whether she considers it a personal failure that those people are currently unemployed. I want to know from the Minister whether those people are ones she considers to just have an attitude problem or, in fact, they have been the result and fallout of an economic downturn, in which case what I would expect is that we would step up as a Government and support them into work in a way that actually was manageable for them.

I want to know an answer to a question I asked right at the beginning, which is: does she think that people, our families, our working families, often, who get accommodation supplement, and our unemployed families where one or two of the breadwinners have lost their jobs since the Government took hold of this economy and has been responsible for the way it has been run for quite some time now—are they actually able to pay the bills? Has she made an inquiry? I’ve asked about specific payments, not Consumers Price Index, which we know is a flawed system and it doesn’t quite manage to do that. Has she looked to make sure that those families can pay their bills?

One of the things that the Minister has done is she has decided to review people on accommodation supplements and take away the bare amount that they were getting from boarders. That was $100 a week from those very people who were trying to make ends meet. I would like to know whether she’s looked at that since and thought, “Well, the cost of butter is now about $8.”—if you’re very lucky, it’s $8—“Maybe I need to look at this in terms of whether they can actually make ends meet.” I’d like an answer, sincerely, to those questions.

I was hoping I wouldn’t need to do this in the Chamber because it’s been said multiple times before, but let’s just—

Helen White: I still haven’t heard it.

Hon LOUISE UPSTON: OK, good. Excellent. Here’s what happens. High levels of spending, excessive levels of spending, wasteful spending, leads to high interest rates, high inflation, and higher unemployment. Unfortunately, when we came in, we came into a period where inflation was 7.2 percent. We’ve managed to get it down to 2.5 percent, which is remarkable in this short period of time. If the member’s worried about the price of butter, she should worry about inflation and be celebrating the fact that it’s down from 7.2 percent to 2.5 percent.

In terms of the unemployment rate, the unemployment rate forecast by Treasury for the previous Government—I think it was June 2022—was expected to be at 5.2 percent at this time. Guess what it is? It’s 5.2 percent. We are not further away from what the unemployment rate was expected to be when that member’s party were in Government. But, unfortunately, anyone on this side of the House would prefer not to be dealing with the circumstances we’re dealing with. We have got inflation under control, but for, I think, something like 44 percent of mortgage holders, they are yet to refix their mortgage. They are not seeing those falling interest rates in their bank account yet—that is still to come.

We know that there is a lag period between inflation coming down, interest rates coming down, the economy turning, and recovery beginning. Unfortunately, the unemployment rate is always the last to follow. The member asked specifically: what is the taxpayer bill for those on the jobseeker benefit for 2025-2026? It’s $4.6 billion. But, actually, I’m less worried about the fiscal cost; I’m worried about the human cost. That is why our side has set an ambitious target to reduce the number of people on the jobseeker benefit by 50,000 by 2030. Yes, we could have said, “Let’s have a really pathetic target because we have inherited an economic recession, we’ve inherited challenging times.”, and given up and gone home. No, because for every single one of those people that come off welfare and into work, we know what a difference it makes for them and their families. I’m celebrating 80,700 people in the last year coming off welfare and into work, despite the trainwreck of economic conditions that we have inherited. It’s $4.8 billion.

I will ask, once again, is it correct that disabled people are disproportionately affected by the changes she has introduced that will strip away income for people who have boarders; if so, what is her message to disabled people living in poverty, who will be disproportionately affected by this change?

The changes that we have made around the accommodation supplement, going back to Budget 2024, were to make a fairer, more equitable system. If you are a disabled person who has boarders, yes, it will affect you. If you are a disabled person who is a taxpayer, you want a fairer, more equitable system, and also if you are a disabled person who sees benefit of the accommodation supplementary boundaries and rates changes, you’ll be celebrating.

Thank you, Madam Chair. I think just because the Government’s come in under forecast doesn’t mean at all that the Government has been successful in terms of their employment strategy. In fact, it’s been a disaster for this Government. We’re seeing record numbers go to Australia, and the question, again, is where is the employment strategy in terms of this Government? We don’t see one. All we see and hear is that you have come in under what was forecast with the previous Labour Government. That is not an employment strategy; it is just a continual waffle about the previous Government.

I ask the question: is the closing of major work sites such as Kinleith and now Eves Valley sawmill indicative of the Government doing enough to tackle unemployment? What is the strategy? Where is the investment, and has the Ministry of Social Development accounted for a potential increase in demand for its work programmes in areas where major work sites are expected to close? Is there something that we can expect from the Minister other than her continually saying we have come under the forecast that was forecast for the previous Government?

We have published an Employment Investment Strategy, which the member is asking about—an employment strategy for 2025 through to 2028. That is very much focused on a range of things—a priority around 18- to 24-year-olds—so that we can move that curve back from the 18.2 years average future time on benefit that we have inherited, back to the 12.2 years, for example, which is where it was in 2017. Part of the investment strategy is the 490 case managers, because we know that one-on-one case management is the most effective intervention we have had. That is through data and evidence that tells us which programmes are more successful. We are investing in what works the best. Other initiatives like Mana in Mahi, He Poutama Rangatahi, Mayors Taskforce for Jobs, and Ngā Puna Pūkenga are all about focusing on how we ensure we are targeting those programmes to the people they will have the greatest impact on. I would invite the member to read that employment investment strategy, and, if he has questions on it, to put them down in writing.

Thank you very much, Madam Chair. I’m going to have a third go at asking the Minister. She’s promised that her Government will create 240,000 new jobs. Could she please confirm how that number was calculated? If so, is she using job growth based on population growth to arrive at the number of 240,000 new jobs that she has promised?

Well, from Budget 2025, it was Treasury’s forecast at that time that there would be job growth of 2.7 percent, 240,000 jobs.

Can she confirm that that calculation that she’s referred to by Treasury is actually job growth based on population growth, not any specific action that her Government has taken?

I would invite that member to ask Treasury. It’s Treasury’s forecast.

Again, is the Minister for Social Development and Employment telling me that she does not know herself? Is the Minister responsible for how her Government is going to deliver 240,000 more jobs, and does she not know how that figure was calculated?

I’ll correct the member, because I’ve already said it in this House. The Government is very different from the previous one in terms of who they believe creates the jobs: businesses create jobs. If I think about the announcement today, with Qantas and Jetstar adding 660,000 additional seats across the Tasman and within New Zealand—that creates jobs. The Government is creating the conditions where businesses will grow and create more jobs. In terms of additional jobs that have been mentioned in this House—the member referred to the Prime Minister; I’d also refer to the Minister of Finance and the Minister for Infrastructure. The significant projects that kick off in the next six months will create more jobs.

Last question in this section.

Thank you. It is really a question that I have asked and I have not had an answer for. I think it’s a central one. Twenty-six thousand more people are unemployed than there were under our Government. While the Minister for Social Development and Employment gave me figures for what it cost the country this year, she did not give me the answer to the question, which is: what is the difference in cost between what it cost under a Labour Government, when we had less unemployment, and the cost that it is now because we have 76,000 people that are unemployed and having to receive that money? What is the extra cost to our country, let alone the cost to the mental health of those people, etc., etc., etc.? Thank you.

As I said, we now are forecasting in the 2025-26 appropriation documents $4.6 billion on the jobseeker benefit. That member wants to ask a question about comparing a cost to 2023. I’ve gone through the figures, I’ve explained how we get to this point in terms of the economic cycle, and she seems to have missed the point that we have come in at a time where high spending, high interest rates, high inflation led to economic recession and the harshest economic times since the 1990s. What follows is higher levels of unemployment. That is why our Government has set a target to reduce the number of people on the unemployment benefit by 50,000. We will push through these challenging economic times with our Going for Growth strategy, which is all about not just the fiscal cost but the human cost. The human cost that I as Minister am unwilling to tolerate is that someone under 25 will spend another 18 years of their life on welfare.

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