Wall Louisa: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeWall Louisa: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — In Committee[Sitting date: 08 April 2014. Volume:697;Page:16951. Text is incorporated into the Bound Volume.]LOUISA WALL (Labour—Manurewa):Kia ora Mr Chair. Thank you very much for the opportunity to contribute to this Committee stage of the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. We are speaking on Part 2 of the bill which very much focuses on the debt recovery part. Part 1 is about the fraud measures; Part 2 really is about the amendments and provisions to enact those fraud measures.What I specifically want to focus on—and I do have a couple of questions for the Minister in the chair Associate Minister for Social Development Borrows—is I guess the integrity of a social security system that contains our most vulnerable societal members. That is the context of this piece of legislation. It is a context where the most vulnerable New Zealanders seek help from the Government. The Government helps those members of our society. Within the context of this bill we are talking about $23 million worth of fraud that is perpetrated within our social security system. There are approximately 700 fraud cases every year. Within that context 200 of them are specific to relationship fraud which is the whole focus of this piece of legislation.The question I had for the Minister came after reading the regulatory impact statement dated 8 November 2012 which essentially outlines a problem definition and the intervention logic. What I found really interesting within that paper was that in 2012 there was a $485 million debt to the Ministry of Social Development. In context of that amount of money $106 million was due to fraud which was 22 percent of the overall amount that was owed to the Ministry of Social Development. The actual percentage of relationship fraud I have got no idea of. There was $176 million worth of overpayments which actually is about the administration by the Ministry of Social Development. So it is actually the ministry’s internal processors who overpay people and then beneficiaries who have been identified as getting too much money have to enter into a repayment scheme with the ministry. Then there was also $203 million worth of advances which was the bulk of the provision. These are beneficiaries who have requested assistance from the Ministry of Social Development. They want assistance.The reason I bring these issues up is that it seems to me that we have gone down a really punitive path in terms of relationship fraud specifically and that we are wanting to criminalise a group of people. The punishment contained within Part 2 of the legislation is very much about fining people who are beneficiaries and then actually saying that if they have not got the money the worst case scenario is that we are going to send them to jail which actually does not make sense to me. What would have been maybe a more pragmatic response is sharing the debt. I believe that there are women particularly and specifically who end up in debt through relationship fraud and who end up having the whole of the liability of that debt that the Government says it is owed because they are in a relationship where their spouse is earning too much money they have got an accommodation supplement they were not entitled to or they have got a whole lot of entitlements they were not entitled to. This piece of legislation is saying: “OK we’re going to share the burden. Their partners have enjoyed the Government’s money and we believe that a fraud has been perpetrated so they must pay.” My question to the Minister would have been around the fact that there is an administrative cost in terms of now creating a new regime around dealing with fraud and I just wonder why we could not have treated—for the women and for the men actually—aspects of this particular legislation as advances and then just integrated the $106 million worth of fraud into existing systems. Why are we creating a whole new system when in fact we could have just added value to what was already there?I am particularly passionate about this area as a member of the Social Services Committee because whom we are dealing with are as I said before our most vulnerable members of society. Many people have talked about the context of relationship fraud. It is mostly women who are getting the DPB. What I found staggering actually in this regulatory impact statement is that there was not a gender analysis because I think that what we are actually talking about is debt that women have. There was not an ethnic analysis. We do not actually know how many Māori or Pacific or other New Zealanders are affected by this particular issue.You know frankly what we have tried to highlight tonight is the prioritisation by this Government of trying to recover what amounts to a very small amount of money that beneficiaries owe. What we have said is that the opportunity cost for that time in terms of a bill would have been much better spent looking at the up to $6 billion worth of tax evasion that occurs in the country. The whole reason and rationale for highlighting that to New Zealanders some of whom will be watching tonight really is trying to underline the prioritisation of this Government of making sure that beneficiaries pay back money that they supposedly have defrauded our Government of. As I said before these are New Zealanders who would have got too much accommodation allowance or too much other support which actually has enabled them to survive and live in this country within the context of no work or the work that they do have actually not paying them enough to live on.Another question I have for the Minister is around the commencement date because that has changed. This Act was supposed to come into force on 4 November 2013—The CHAIRPERSON (Lindsay Tisch): Part 2. We are on Part 2.LOUISA WALL: Sorry Mr Chair. The question really is about communicating this piece of legislation if the House consents to it being passed to the social security community so that it understands the implications of this bill. The only thing I can see out of it that could be positive is that the ministry is going to engage with people—I would target those on the DPB—to make sure that they know that there are new requirements within the context of this legislation that could have huge implications for their relationships. It obviously has huge implications for how they live their lives. It is just to make sure that they are fully informed and can make an informed decision about how they live and how they meet the requirements of being a recipient of the Ministry of Social Development support. Lest we forget the people we are talking about are those who are unemployed. They are those who in most cases have children so they have dependants. They are people who without the State’s support actually have not got a home and have not got food on the table. Fundamentally at the end of the day it means that our children do not have a solid base from which to be able to go to their local school to learn and be the productive members of society that we all want them to be.My challenge really to the Minister in the implementation of this legislation is that hopefully there will be some empowerment in the process because I do see aspects of this that are really positive. Leaving women in debt and having to pay off $5 a week for the rest of their lives with it actually compounding if they owe and take advances because they need other forms of support just means that the poorest and most vulnerable end up being revictimised and stigmatised to a point where life is too tough and where even getting out of bed and making sure their kids get to school is a struggle. So Labour is supporting this piece of legislation. Obviously we do have reservations. The big question we would ask this Government is why it has prioritised this when there is a whole lot of other income that the Government could be getting. From our perspective this is a perpetuation of the stigmatisation of beneficiaries which appals us. Kia ora.Part 2 agreed to.