First Reading (27 May 2004):

The Future Directions package announced today in Dr Cullen's Budget and represented by this sudden Bill is a mixed blessing. There is no question that the Green Party welcomes the steps which the Labour Government is taking to seriously address issues of endemic child poverty, and it is a relief that after four and a half years in power they are finally taking action in beginning a redistribution of resources towards families and children which is so badly needed after the structural adjustments and widening gap between rich and poor of the last two decades.

However, at the same time the Green Party is quite disturbed by the underlying attitude represented here which basically says it is much better for any parent, even a sole parent with young children, to be out there in the paid workforce rather than staying at home and carrying out the even more important job of being a good mother. I have a strong sense today that Labour is actually strengthening that dangerous moral imperative that first emerged in the 90s with the Shipley, Bazley and Rankin reforms, an imperative which says that really all parents, including all single parents, should be contributing to the formal economy rather than nurturing their babies and children.

This Bill has as its focus 'making work pay', a slogan used again and again to bolster an acceptance by society that if you're on a benefit you should get off it as quickly as possible even if it's to the detriment of you and your children, and that somehow the children of beneficiary families deserve and need less money to live on than the children of parents in paid work.

I believe the State should be neutral on whether single parents should have to work or not, and should also accept that it's not a bad thing if one partner in a two parent beneficiary family works as a full time caregiver rather than being worktested and forced out to work.

This is not to say that we don't support any measures to help beneficiaries with the transition between benefits and work, where there are indeed huge and accumulated problems with wage rates which are too low to support many families, a variety of punishing abatement regimes, and the indubitable burden of extra costs incurred when people first start work after being on a benefit.

However, we believe that the way to deal with the transition is not by continuing to entrench the disparities between beneficiary and working families on the same or similar incomes, but rather through directing support to the working adult and their needs.

Second Reading (27 May 2004):

I'd like to take a relatively brief call on this second reading of the Future Directions (Working for Families) Bill to raise a few issues in particular.

My first concern is around the proposal to replace the Special Benefit with Temporary Additional Support. It looks as though the current discretionary regime will be replaced by a rules based system operating through regulation. This takes some of us who have been around for a while back to the ill fated attempt by National to do the same thing with its Social Welfare Reform Bill in the mid 1990s. That Bill met with massive opposition from beneficiary advocacy groups and community social services organisations generally, and eventually even National backed down on it.

It is very difficult to regulate for the totality of human existence, and if a regulatory regime is introduced, there are always going to be people who fall through the cracks. Because the Special Benefit is a benefit of last resort this leaves no assistance available for those whose circumstances just happen to fall outside those contemplated by the officials drafting the regulations.

No matter how well intentioned this particular Government might be, and overall I believe they are, I still think it is dangerous to do away with discretion regarding special benefit. Beneficiary advocates have lobbied hard over the last few years to persuade the Ministry of Social Development to hang on to discretion, and to train their staff to exercise it properly. It is a great pity that it appears we are going to lose this — unless other things happen first, like the lifting of benefits to levels that mean there will be much less need for third tier assistance.

In a similar vein, it is also of concern that the temporary additional support being proposed, presumably by regulation also, will be capped at 30% of the main benefit. This takes no account of the fact that the exigencies of human existence are infinite, and that at times people can find themselves in extraordinarily difficult circumstances through no fault of their own. While I accept that the State cannot and should not ever be expected to automatically be capable of picking up all the pieces of peoples' lives, I believe that, ideally, Work and Income staff should retain the ability to make fair judgements based on the realities of the situation, rather than being completely constrained by regulation.

However, taking a longer term perspective, the Green Party would in the end prefer to see the need for third tier benefits done away with altogether, but that is dependent on the total reform of the welfare legislation, a bullet Labour is not yet prepared to bite, as this Budget and this Bill make very clear.

We look forward to the day when the Social Security Act 1964 will be thrown out completely by a Government which is willing to start over with an income support framework based on principles of sufficiency, simplicity and universality. But meanwhile, it is no good getting rid of third tier assistance while benefits are still too low for people to live on, and it is no good working towards universality if what it means is basic levels are reduced to the lowest common denominator, for example limiting everyone to the rate of the unemployment benefit.

I am grateful that the Government hasn't headed down that particular path with this Bill, and that Labour is evidently committed to making sure no one will lose as the different stages of the legislation are gradually implemented.

The second area I'd like to just quickly touch on here is the question of how this package does and doesn't affect beneficiaries who do not have dependent children. Apart from increases in the Accommodation Supplement, which will apply in a highly variable fashion according to circumstance, beneficiaries in this category face an uncertain future, especially with the eventual loss of the Special Benefit as well. For example the Wellington Peoples Centre believes that a single person with severe disability and low housing costs could well end up worse off as a result of these initiatives and I'd be interested in the Government's response to this, given their assurance that no one will lose out as a result of the changes announced today.

But at the same time, I also recognise that the benefit system with all its layers and its some 35 different forms of assistance continues to be used really as a way of subsidising the inadequacies of a health system which often doesn't treat people well or in time, whether they have physical or mental health problems. The Green Party of course applauds the Budget gift of more money for joint operations, but this doesn't solve the much deeper crisis embodied by the fate of tens of thousands of people on sickness and invalids' benefits who are simply not well enough to work but who would love to if they could regain their health sufficiently to be able to take on employment.

Finally, I'd just like to reiterate some frustration on the part of the Green Party that substantial increases in support for families are going to take so long to roll out. The people this Bill is aimed at helping, low to medium income families, need support now, not later. It would have been great if Dr Cullen could have seen his way clear to using some of his windfall to put a little more than $170 million into this for the 2004/5 year. I know a billion dollars or even $500 million for this year would have looked uncomfortably like a serious election bribe, but in fact this is what the 30% of the country's children who live in poverty need now, not later.

This Bill and the Family Directions package are to be welcomed for the enormous step forward they take towards restoring a greater degree of equity to New Zealand society. I am just sorry we couldn't have done it a little more quickly and with less discrimination against beneficiaries and their families.

Committee stages (28 May 2004):

The Green Party is tabling an amendment to Part 1 of this Bill in which we seek to repeal clauses 12, 23 and 25. While, being realistic about things we are not particularly hopeful of the chances of our amendment passing, I am putting it forward because I think it is important to highlight the dangers in so substantially changing the Special Benefit regime, especially given the lack of opportunity for public consultation. With this Bill being rushed through the House under urgency all the people and groups who would normally have plenty of time to make considered submissions on changes to the Social Security and tax laws are being denied that chance, and in most cases are probably simply unaware of the detail of the reforms that are being made.

The Green Party amendment which I'm putting before the House in effect reverses that part of this Bill which repeals section 61 G of the Social Security Act, and sets up a new system called 'temporary additional support.' The effect of what the Government is doing here is to remove statutory discretion for the Special Benefit. Its replacement, 'Temporary Additional Support' is likely to subject a small, but very vulnerable, number of beneficiaries to greater poverty than is currently experienced by anyone.

To give just one example of how this could work in future, I will take the situation of a single invalids beneficiary with very high disability costs living rurally who has to travel significant distances twice weekly at a cost of, say, $200 per week for treatment of a chronic medical condition, which is only available at the nearest city. On current rates, disability allowance to cover the costs of travel for the treatment is capped at just over $48 a week.

The proposed cap on the temporary additional support at 30% of the main benefit rate would result in maximum TAS at the current invalids benefit rate of $61.55 a week. Any disability related costs above $109 per week would have to be met out of the person's invalid's benefit itself. In this example, this would amount to $90.27, leaving the beneficiary with only $114.91 a week to meet everyday living expenses.

By contrast, under the current special benefit regime, while there is a guideline cap of 30% allowable costs there is still discretion for the departmental staff to exceed this if the beneficiary's individual circumstances justify it. A special benefit of $152 would likely be paid in respect of the disability related travel costs for the beneficiary I've just described. So in effect, what we are going to see is a big benefit cut for some people, and for an unknown number of individuals and families in the future, who find themselves in all sorts of difficult situations beyond their control.

Third Reading (28 May 2004):

Yesterday afternoon when the Budget was announced I felt genuinely moved and gratified that at last this Labour Government was doing something which will directly go some way to alleviating endemic child poverty. Overall the Green Party has welcomed, indeed applauded, the 'Working for Families' package which, at least partially, redresses the structural imbalance between rich and poor which has developed over the last twenty years.

However, there are a few issues of concern lurking beneath the socially benevolent exterior of the 2004 Budget and these are issues the Bill in front of us today brings to the fore.

First of all, and most alarmingly, upon reading the fine detail of the Future Directions (Working for Families) Bill some of us were somewhat startled to discover that suddenly and without warning the Special Benefit is to be disestablished, and replaced with a much more limited form of assistance called 'Temporary Additional Support.'

Now to those who are happily not familiar with the labyrinthine intricacies of New Zealand's income support system this will not mean much at all. But for those who depend on this very system for enough money to live on, the Special Benefit is, unfortunately, an unavoidable tool of survival.

In an ideal world, the Green Party would like to see the Special Benefit and the whole complex range of third tier assistance abolished completely and immediately. The 35 or so forms of benefit and allowance that have grown up over the years are a nightmare to administer. They soak up huge administrative costs, including salaries, which could be put to much more productive use elsewhere in the Work and Income system, for example in providing a lot more vocational support for unemployed people.

The Special Benefit also has a particularly difficult history because it has been administered so ineffectually and with such random application between geographical areas. As a result of this, beneficiary advocacy groups in the last couple of years have carried out what they call Special Benefit Impacts in Rotorua, Hawkes Bay and the East Coast, in an effort to get Work and Income to pay people what they were actually entitled to in areas which suffered particular discrimination. These Impacts have had a significant effect in encouraging local departments to improve their attitudes towards beneficiaries.

The Government is to be commended for the work it has done in trying to reduce some of the greater inequities and stupidities in Special Benefit administration, for being prepared, up till now, to budget more for Special Benefit, and for having an overarching policy which says all beneficiaries should actually be able to access their full entitlements, quite a novel notion really in the longer history of social welfare.

However, what we're seeing in the Bill in front of us this afternoon overturns all this. The effect of this Bill is to remove the Special Benefit and replace it, partially, with something called Temporary Additional Support. While this sounds fine on the surface, in fact what the Government has not spelled out in any of its grand Budget promotion is that this new allowance will be much lower and far more restricted in its application than the Special Benefit.

When I introduced an amendment attempting to reverse this aspect of the Bill in the committee stages this morning, I was probably naively surprised, when the Government suddenly placed a fiscal veto on my innocent little amendment, alerting me to the fact that the financial implications of what's going on here were probably a lot worse than I'd suspected. I then turned to the Estimates themselves to discover that the Government is going to be saving $7 m on the special benefit in 2004, $45m in 2005, $57m in 2006 and $91 m in 2007.

While there will be some compensation for some future beneficiaries in the fact that those will children will gain through the new family support regime; and while some will get help through the temporary additional support allowance, these savings go to show that in fact the Government plans to gain a substantial amount overall from cutting the special benefit, and the ones that will suffer are most likely to be beneficiaries without children, and who have particularly high living and/or medical costs.

The Government is going to save a great deal of money from scrapping this benefit, at the expense of a lot of people who rely on the temporary support it affords them in otherwise desperate situations.

It is particularly disturbing that the Government is rushing a change of this significance through under urgency and under the cover of a Bill which overall seeks to improve things for families and the poor. This is the sort of administrative change and benefit cut that should have been subjected to the normal Select Committee process, where all concerned groups and individuals could have had a chance to analyse the Bill and make their views heard.