Financial Review Debate — In Committee 
Financial Review Debate — In Committee 
[Volume:646;Page:15068] 
Financial Review Debate 
In Committee 
Debate resumed from 18 March on the Appropriation (2006/07 Financial Review) Bill. 
Ministry for the Environment ( 
continued 
)  
JACQUI DEAN (National—Otago) 
: 
 The financial review for the Ministry for the Environment highlights the fact that the Government’s management of New Zealand’s freshwater resources has some major deficiencies and is putting our clean green record internationally and domestically at risk. 
Hon Trevor Mallard 
: Stop attacking the farmers. 
JACQUI DEAN 
: The Minister does not want to hear the truth but the Minister must hear the truth— 
Nathan Guy 
: I raise a point of order Mr Chairperson. It is my understanding that the Minister in the chair cannot interject. 
The CHAIRPERSON (Hon Clem Simich) 
: The preference is that the Minister does not interject and I am sure he has taken that on board. 
JACQUI DEAN 
: Thank you Mr Chairman. I am sorry the Minister feels he needs to embark on an outburst at my speech. I am sorry he does not actually like the truth and does not like what he has to hear today. None the less here I am for a further 3 minutes to tell the Minister the truth. The truth is and the facts are that water quality particularly in lowland streams is deteriorating under his watch. Water quality measurements in places like the Waikato Canterbury Otago Southland and other places in New Zealand show that the proportion of streams that have poor water quality is increasing and there are a number of water quality hot spots throughout New Zealand. Places like Lake Taupo the Rotorua lakes and Lake Ellesmere are all examples of poor or deteriorating water quality all under this Minister’s watch. The Government’s record in water management has got so bad that the Government’s policy response to it has been dubbed not the Sustainable Water Programme of Action but— 
Hon David Carter 
: What’s it called now? 
JACQUI DEAN 
: Well it was interesting. At the New Zealand Water and Wastewater Conference in Rotorua last year one of the major conferences on water the senior Ministry for the Environment policy analyst got up and put up on his projector a slide with the title: “The Sustainable Water Programme of Inaction”. 
Hon David Carter 
: Sounds like Mr Anderton must be doing it. 
JACQUI DEAN 
: Well I think that that little slip of the tongue that little bad day at the office said it all on this Government’s management of fresh water in this country. 
So the Government’s call for sustainability just rings a little hollow—and I am sure the Minister does not want to hear this either but he has to—when after 8 long years in office the Government has presided over a worsening deterioration in water quality. The water in many iconic lakes and rivers is unfit to drink or swim in and there is a water allocation system that is failing a number of over-allocated catchments around New Zealand. 
Much of mid-Canterbury water and groundwater is over-allocated as are a number of catchments in Otago and further south. Many consents to take water on the Waitaki for example are still called in following the Government’s bungled and inept handling of the Waitaki water allocation framework which came about as a result of Project Aqua by Meridian Energy. This Government has a very poor record on the environment. 
Hon TREVOR MALLARD (Minister for the Environment) 
: 
 I thank the member for her contribution to highlighting what is a very important issue. Jacqui Dean has taken a proper approach to the issue. Although there was a lot of rhetoric in her speech she did highlight a very very serious issue which is the quality of water and the long-term problems we have had in New Zealand. It is something that has been one of my main focuses as Minister for the Environment. 
I think all of us—people of our generation—know that there are places where we could swim and even drink from when we were young that we would not let a dog swim in now. That sort of change over quite a long period of time is very very serious and it is something we have to work on reversing. 
In some places a lot of progress has been made. There has been a lot of progress on point discharges especially in urban areas. In some of the clean-up there has been progress as well. I invite the member to have a briefing or to visit the Waiwhetu stream and see the clean-up there of probably the dirtiest water in the country. It is a stream in the middle of an industrial area where for about 30 years chemicals were dumped through stormwater into a stream. 
Jacqui Dean 
: I was part of the project. I’ve cleaned streams. 
Hon TREVOR MALLARD 
: The member would not get in this stream to clean it. It is so dirty and so infected that the member would not go near it. In fact I tell the member that that stream—the Waiwhetu stream—actually has lead in the sludge coming out that is of mineable level. If that stream was slightly bigger it would be a source of income because one could mine it for lead. A lot of other heavy metals are involved in it too. 
After years and years—decades—of inaction by Governments on both sides of the House we are finally getting on with cleaning up that stream and a number of others. For example work is going on in the Taupo catchment. I think most people are aware that a lot of nitrates are going into the lake and that this has to be reversed. A large amount of Government funding is going into a trust that is working to reduce nitrate levels. 
But I tell members that it will not happen quickly because nitrates that are used on the surface of farms now around the western part of the lake— 
Jacqui Dean 
: Is this your speech from earlier today? 
Hon TREVOR MALLARD 
: I have made a number of speeches today on a number of topics—not so much on the western access. Some members care about Lake Taupo and the environment and I tell them that even if we stopped now for another 30-40 years nitrates will be flowing into Lake Taupo from those farms. It is important to work not only towards stopping it now but also on mitigation methods. 
Clearly there will have to be some policy changes over a period of time. We cannot go on intensifying farming in the way we have in areas where water is at risk. It is obvious to everyone who is concerned in the Waikato for example that the discharges going into that river cannot continue even at their current rates. Therefore the intensification that has been occurring during recent years will have to be unwound either by technology new methods of fertilising new methods of fixing fertiliser or reducing stock numbers in some areas. 
That will be hard because it will involve some changes in what people previously regarded as their rights on a particular farm. But there will be a question in the end over what is for the greater good of the country that particular region and the farmers’ neighbours. That will be policy that I will be prepared and pleased to lead this year next year and for the years after that. 
Report noted. 
Department of Labour 
KATE WILKINSON (National) 
: 
 I thought I would preface my speech this afternoon by reminding members of what the Department of Labour’s primary role is and that is to improve the performance of the labour market. The report noted that the department has identified workplace productivity as the key to lifting New Zealand’s living standards and wealth. 
I would like to concentrate for a moment on those issues of productivity. It is alarming to find that the report states: “Despite the department’s efforts to improve productivity it was noted that New Zealand’s labour productivity growth in the measured sector has markedly declined since 2000;”. Today’s  
Independent 
 talks about productivity in an article headed: “Productivity: It’s a hard road to hoe” and we have heard that Statistics New Zealand is hiring 1½ people to work for 2 years on a feasibility study to determine whether it is even possible or feasible to measure public sector productivity. New Zealand appears to be deciding whether it is feasible but we know the answer to that. The report says that a good start might be to measure productivity at the Department of Labour. 
The Department of Labour has a website that includes references to workplace productivity. That website was last updated last year on 6 December. The department’s website was last updated over 4 months ago and I do not think that is a wonderful example of workplace activity. The Department of Labour seems to create groups. It had a Workplace Productivity Reference Group. Then it had a Workplace Productivity Working-group. But that working-group was established in 2004—4 years ago—and we still cannot measure public sector productivity in the Department of Labour. In fact the most recent news item for the reference group was in April 2007—over 12 months ago. 
If we measured productivity by the number of productivity work groups or productivity reference groups set up by the Department of Labour then maybe the department would win the productivity prize. It is a sad state when the very department that is responsible for workplace relations is not bearing up to what it should be doing. 
The Department of Labour is responsible for advocating good workplace practices. If members look at the financial review they will be horrified to find that the number of personal grievance claims in that department alone has nearly doubled in 12 months. In fact last year the cost of settling employment relations problems was $97500. The year before the cost was $7000. That is a massive $90000 more to settle the department’s own personal grievance and employment relationships problems—and this is the very department that is supposed to be advocating good workplace practices. One might like to suggest that it should be practising what it preaches. 
Labour has spent so much of our taxpayers’ money but it cannot tell us whether it has been effective and sometimes it cannot tell us what it has spent it on because it just does not measure that productivity. This is not a new phenomenon. Back in 2005 the report to the incoming Minister—and I appreciate that it was not the Minister in the chair this afternoon the Hon Trevor Mallard—cited productivity as a major concern yet the numbers are absolutely dismal. Labour productivity growth has averaged a mere 1.4 percent per annum. By comparison between 1990 and 1997 it averaged 2.6 percent per annum between 1997 and 2000 it reached an average of 3.4 percent per annum and now it is a paltry 1 percent. New Zealand’s productivity growth has markedly declined and that is a tragedy. 
Hon TREVOR MALLARD (Minister of Labour) 
: 
 I want to thank that member Kate Wilkinson for the opening she has just given us and to give her if she likes a relatively simple explanation because I think for that member it needs to be about labour productivity. When unemployment is rising people who are in the lower skilled jobs and who are the least productive are more likely to get the sack and when the National Government was in office that happened. When that happens—when the people who are less productive because their skills are lower and the machines they use are less sophisticated get the sack—average productivity goes up unemployment goes up and average labour productivity goes up. When we have a Labour Government and unemployment comes down a whole pile of people who have never had a job who would not know how to work a sophisticated machine and who are not in the professional category get jobs and average labour productivity is exactly— 
Dr the Hon Lockwood Smith 
: What about capital productivity? 
Hon TREVOR MALLARD 
: We will get to capital soon. What happens then is that productivity drops. Instead of celebrating the fact that more people have got jobs that member is moaning about it. 
Now having said that I do not think it is good enough that many people who are coming into the workforce now or who have been in the workforce for a number of years have skills that are not adequate for the modern world. There are a number of reasons for it—probably the abolition of the Apprenticeship Act was part of it and probably a very important part is that the National Party got rid of trade training including Maori Trade Training and a number of areas like that. Our skill development both in pre-workforce and especially within the workforce was abysmal under the National Party. That is why we have had to have a massive growth in spending in that area and in the numbers involved. The number of apprentices has gone from almost none to I think 40000 entering Modern Apprenticeships since we have been in Government and there are a number of areas like that. 
I do want to go back away from some of the more general employment and training issues that the member referred to and say that at some stage soon the National Party will have to front up. Its current policy for example is to cut back paid parental leave. Its current policy is to make the fourth week of leave negotiable—to take it away from workers and say “You’ve got to negotiate it.” Its current policy as far as sick leave is concerned is to cut back the eligibility for sick leave. Its current policy is to make a large number of changes to the Employment Relations Act all of which go against the interests of workers. I was looking forward in fact a number of people were looking forward to Kate Wilkinson speaking I think it was last week or the week before when it was announced that she would be giving a comprehensive update on the National Party policy— 
Charles Chauvel 
: The same as Bill English? 
Hon TREVOR MALLARD 
: Well the same as Bill English on KiwiSaver. She turned up read from the research unit notes and gave no policy at all. There are some things that I can say about that member. She is a relatively new member and not very experienced. But I can tell the member that when she promises an audience that she is going to give a comprehensive explanation of industrial relations policy and it states that on the invitation the audience thinks she is fraudulent when she does not do it. They think that member committed fraud. A whole pile of people some of whom were silly enough to think that the National Party might have a chance to be in Government turned up to listen. They were shocked. There were people who were not only from a left-wing perspective— 
Kate Wilkinson 
: You weren’t there. 
Hon TREVOR MALLARD 
: No but I have had reports from all over the place on how poorly that member performed then. 
DARIEN FENTON (Labour) 
: 
 I am happy to take a call on the financial review of the Department of Labour. If I had taken a bet with my colleagues that the productivity figures for the 1990s would be wheeled out in this debate today I would have won a lot of money because there they were—those old tired figures about what happened in the 1990s. What is interesting about the National Party is that its members do not want to talk about the 1990s unless they think there is something good—and they think that the productivity figures for the 1990s were good. Well as my colleague the Minister of Labour said productivity is easy to grow if it is based on low wages on high labour utilisation and on low investment in skills and plant. Any fool can produce higher productivity on those measures. In fact I reckon any sweatshop in any Third World country or developing country or any organisation using child labour would be able to show high productivity. With low skill and low wages of course there is going to be high productivity. 
But what National’s approach did not do during the 1990s was grow wages. It contributed to an almost nil wage growth in 5 out of 9 years during the 1990s. It contributed to a growth in the wage differential—which it now likes to whinge about—between New Zealand and Australia by almost 50 percent and it did not grow our skill base; in fact it shrank it. This Government has been running to catch up ever since. You did not encourage innovation you did not do any training and you did not even know what a high-quality workplace looked like. 
Kate Wilkinson 
: I raise a point of order Mr Chairperson. I do not particularly relish interrupting the member but the member is bringing you into the debate and that is not appropriate. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member for raising that; she is quite right. Could the member try not to do that? 
DARIEN FENTON 
: The National Party did not even know what a high-quality workplace would look like. The point of improving productivity is to contribute to society’s long-term standards of living so that everybody shares in the benefits of a growing economy. It is not about making people work harder and faster—which the National Party seems to think it is—or for less pay and nor is it about making some people at one end much better off and everyone else worse off. I do not hear from the National Party its answers to improving productivity. I hear a lot of whingeing moaning and grizzling— 
Kate Wilkinson 
: Be patient. 
DARIEN FENTON 
: The member tells us to be patient; we are waiting with bated breath to hear what National’s policy is about improving productivity. I suspect very much that it will be the same old things those members did in the 1990s so they can get back to Government because that is the only way they know of getting that graph to go up. Of course their policies caused huge damage to people. The standard of living went down under the National Government. 
I also agree with the Minister that National needs to explain its agenda on workers’ rights. It is time the National Party fronted up. Sooner or later that party is going to have to do it. At the moment there is just guesswork and it is not a pretty picture. One thing that everybody is very clear on is that National is still promoting a law change that would expose 700000 working New Zealanders to unfair sacking and discrimination every year with the reinvention of Wayne Mapp’s “Get the Sack in 90 Days Bill” which was resoundingly beaten in Parliament in 2006. We can look at the record for our information. The National Party has opposed every decent piece of employment policy over the last 9 years including 4 weeks’ annual leave paid parental leave and time and a half for statutory holiday work. So it is time National told people what its real intentions are. 
Kate Wilkinson 
: We will. 
DARIEN FENTON 
: The National Party says that it will but I think it has a secret agenda. I do not think the National Party wants to own up to what its policies are. It is hoping that no one is going to ask—that there will be no questions about its industrial relations policy leading into the election. National is hoping to keep it quiet and it is hoping that “Slippery John” will be able to get through the next election campaign without any questions about industrial relations. Well I am sorry but there will be questions and they are coming now. They are coming thick and fast. We want to know and the workers out there want to know what National is going to do about industrial legislation. What will National do to improve productivity? If National thinks it has better ideas where are they? Tell us what they are. 
We know so far that National would like to dismiss some workers—unfairly—on probation. I have already mentioned that issue. We know that National would like to have workers sell their fourth week of holidays—in other words a worker would go along and sign up to a job and find that the fourth week of holidays would be included in his or her pay. 
Report noted. 
Ministry of Social Development 
JUDITH COLLINS (National—Clevedon) 
: 
 If anyone wants to look at the future of the Labour Party—well we have just seen it! Darien Fenton is one of the hardest working members of the Labour Party and one of the most talented and that is actually one of the reasons why Labour is doing so well in the polls at the moment! 
That speech was just a few notes from the Labour research unit on the ninth floor of the Beehive. It was just the same old rhetoric—everything is wonderful under Labour they say. Tell that to the member’s constituents who do not have enough money to pay the mortgage and go along to the supermarket wondering whether they can buy the block of cheese they normally get for their kids. We see the increased cost of petrol and everything else under this Government. That is what we see. 
Certainly this is most relevant to the beneficiaries that the Ministry of Social Development deals with. We are constantly told by the Government that unemployment numbers are down and we accept that. They are down but for how long? The world’s economies are in turmoil. We see that right now. Almost every day the front pages of newspapers talk about what is happening with overseas economies and therefore what is happening here. 
We have heard a lot about what happened in the 1990s. We have heard a lot about the 300000 or so jobs that have been created in the last 9 years. Well I have news for this House. There were 300000 more jobs created in the 1990s under a National Government as well. And that was actually when economic times in the world were very very tough and New Zealand had to deal with the fact that the National Government inherited a bankrupt economy from a Labour Government that cooked the books and then made out that there was money in the Budget when there was not. That is what the National Government inherited. But the Labour Government inherited from National a good set of books and a good economy and what has Labour done? In the 9 years Labour has absolutely wasted it. Labour fudged the books—that is the other thing it does. 
If we look at the household labour force survey which is the only official record for unemployment we find that 25000 young people are not in work or training or education. That number has not changed significantly in the last 9 years. New Zealand has been getting fantastic commodity prices—not due to this Government—and there are opportunities everywhere but that number of unemployed young people has not changed. 
So many children still miss out in life. More children than ever are being referred to Child Youth and Family. The departments that deal with kids in need are now bigger and the reason is that more children are in need. The Salvation Army report of last year showed that the gap between the rich and the poor is becoming bigger under this Government. More children are missing out and more children are living in poverty despite all the opportunities. The reason for that is that this Government is interested only in cooking the books and in making out that everything is fine when it is not. 
The Government spends an awful lot of taxpayers’ money because it cannot trust taxpayers to spend their own earnings. Let us look at the cost of staff recruitment in the Ministry of Social Development. The ministry spent $101000 in 2002 on recruitment. It is a big department and one can understand that. But what did it spend in 2006? It spent $608000—and that was not spent on wages; that was spent just on recruitment. 
Craig Foss 
: On bureaucrats. 
JUDITH COLLINS 
: Absolutely. If we look at the number of people on the sickness benefit and the invalids benefit we see that 130000 New Zealanders of working age are now too sick to work. That is after 9 long years of a Labour Government. Huge amounts of money have gone into the health budget but more people are sick. Huge amounts of money have gone into education but more students are leaving school unable to read write or do basic maths. 
More people are failing. Why is that? It is because this Government knows only about wastage. It loves to employ people in all sorts of Government departments particularly those involved in communications. The spin doctors have had a huge windfall under this Government. Anybody who looks at these accounts will see that spin-doctoring—the communications outfits—has grown like Topsy. That has happened under this Government because it is interested only in power. We need only look at the beneficiary debt owed to Work and Income to see that this Government is not doing its job. 
RUSSELL FAIRBROTHER (Labour) 
: 
 That last speaker spun spin. That speaker can sit in the Social Services Committee hear half an hour of a submission and before the witness has finished whip out and issue a press statement that takes out of context one line of the witness’s evidence. She does that without even challenging the witness by saying: “I’m going to report you in this way. What do you say?”. The witness at the select committee leaves the committee only to hear on the radio that what was said has been taken out of context. Talk about spin! That lady defines it. If that lady spun a web we would all be fighting for our existence. She spins like any campaign spin doctor. 
What she forgets to tell members is that the increase in the Public Service is because by 1999 the previous National Government had run our Public Service so low that this Labour Government could not operate efficiently. Our infrastructure was virtually non-existent. It has taken moderate and reasonable growth to bring the Public Service to a level of efficiency. 
That same speaker as the deputy chair of the Social Services Committee signed off the financial review report of the Ministry of Social Development which we are debating today with nary a negative comment. She made not one negative comment so she endorsed the committee’s review of section 59 of the Crimes Act—the new law. Section 59 gives an example of the slip slip slipperiness of the National Party leader. He brought about the compromise on section 59 without telling his caucus. When we listen to the National caucus members we realise that they do not like it. They talk behind his back about it. They undermine him about it. They do not like the deal he struck because they know that it is slip slip slippery. 
The report we are confirming today which was signed off by the deputy chair of the select committee tells us: “The new law has not resulted in an increase in notifications to CYF.” The committee also indicates that it is pleased with the increased funding for the SKIP programme. We know because the committee has endorsed it that the increase in the SKIP funding goes in well with the section 59 amendment—which was foisted upon the last speaker by her leader with his deceit of his own caucus members in that slip slip slippery method of his of getting it done without telling them—and there have been no increases in notifications to Child Youth and Family. 
That takes me to the endorsement by the National Party including the last speaker of the moves to reduce the level of violence in this community. The select committee reported on the moves to reduce violence and the previous speaker endorsed the committee’s appreciation of the increased awareness in the community of family violence. That speaker endorsed the work of the Ministry of Social Development to bring about a less violent community. The report states: “We are pleased to learn that the case conference method has fostered inter-agency co-operation producing better outcomes for families.” What that speaker was saying when she put her pen to paper to endorse the report was that the Government departments are working very very well. Those public servants that her slippery leader is attacking anonymously and without specific detail are working well and that was endorsed by the National members of the Social Services Committee which noted that inter-agency cooperation is bringing about a reduction in violent offending in our community. That is the reality; those are the specifics of what we talk about. 
I want to take that last speaker and her colleagues to what has happened with youth on the unemployment benefit. In 1999 there were 17000-odd youths on the unemployment benefit. These days the figure is about 300. That is a reduction of over 90 percent. More significant the number of people receiving the independent youth benefit for more than 13 weeks is so small that it is barely worth mentioning. But did the last speaker dwell upon that? Of course she did not because she would not want to recognise the huge successes of this Government in the realm of unemployment—particularly in regard to the independent youth benefit. But the report which was signed off by the National Party members acknowledged the great success of this Government and the Public Service in that area. We are working well to reduce youth unemployment. We have to accept that our unemployed youth are a danger to the future safety of our society. If we can keep the youth unemployment rate down and have our youth working we will build a strong and healthy society. The select committee in the review we are discussing effectively endorsed that. 
I thank the deputy chair of the committee for her cooperation. When the rubber hit the road she had to front up and agree that those were the results. It is easy for her to stand here and spin away as she does with the media by misquoting what goes on in the committee but when push comes to shove she knows that we are doing a very good job. 
SUE BRADFORD (Green) 
: 
 Although there is no question that the administration of our benefit system has improved in a number of ways over the three terms of this Labour-led Government there are still significant problems especially for those most impacted by Work and Income—beneficiaries themselves and their families. 
One of the issues once again highlighted by the 2006-07 financial review of the Ministry of Social Development is that of beneficiary debt. The department told the Social Services Committee that although the number of people on benefits is dropping beneficiary debt has increased with over $755 million owed in both recoverable assistance and overpayments. As far as I am aware this level of debt is still rising. 
Although some might condemn this level of debt as an example of the imprudent financial habits of people on income support the Green Party views it instead as a symptom of several fundamental political and systemic failures. The first of those is that the benefit cuts made by National in 1991 have never been restored. Sadly Labour has been content to continue with the damage inflicted in the 1990s requiring people to live on benefits that in many cases are simply not enough to provide even the essentials of existence. There continues to exist what appears to be a large-party consensus that anyone on a benefit must expect to simply endure substantial levels of deprivation and hardship even when this affects another generation as well—their children. 
Roughly speaking 20 percent of our country’s children still live in poverty according to the Ministry of Social Development itself. Many of them are the children of beneficiaries—particularly sole parents—and many of them are tangata whenua. According to the Child Poverty Action Group the incomes of superannuitants have risen by 8.5 percent in real terms since 1999. The action group says that “between 2000 and 2004 the percentage of New Zealand children in severe to significant hardship rose from 18 percent to 26 percent while during the same period the percentage of those over 65 in these categories remained steady at about 4 percent.” Although thankfully the percentage of children in poverty has decreased since the first half of this decade at 20 percent the figure is still far too high and the yawning gap between the way we as a society treat the children of beneficiaries and the way we treat old-age pensioners continues. They are all dependent on our welfare system but one group has its pensions inflation adjusted each year while the other is left out and left behind in all sorts of cumulative ways. Beneficiary debt of any sort whether to the Government itself or to private lenders would be vastly lower if the benefit system itself paid people enough money to live on in the first place. 
The second reason that so many beneficiaries continue to subsist within an endless cycle of debt is that in April 2006 the special benefit was abolished and replaced with temporary additional support—colloquially known as TAS. Up until that point the special benefit had provided a third-tier level of last ditch discretionary assistance for people in the situation where the gap between their actual income and the necessities of life was too high to bridge by any other means. With benefits remaining low and even some low-wage workers requiring assistance from Work and Income the special benefit played a key role in allowing case managers a way of topping up people’s benefits to liveable levels. 
However for 2 years now the new system has been in place with only people fortunate enough to have been on the special benefit at the time of the changeover being lucky enough to have their entitlements grandparented. Of course the number of people in this situation is dropping all the time while people new to a benefit or people whose circumstances have changed find themselves totally at the mercy of the new system. When we asked questions during the financial review process about the impact of the change from the special benefit to temporary additional support and about the rise of recoverable assistance the department responded that it was largely because of the higher prices of essential goods like fridges and school uniforms. I suggest that if these items are such an important component in the rise of debt then perhaps the core benefit levels themselves should be increased to take account of higher prices—not to mention the ever-increasing price of things like accommodation petrol and food. 
There simply continues to be a large number of beneficiaries who cannot survive on what they are allotted by the department even when their entitlements are maxed out under current law. This is the fundamental reason why so many beneficiaries spend their lives going deeper and deeper into debt to everyone around them including the Government and why some people find themselves in particularly difficult—if not impossible—circumstances because of the removal of that third-tier discretionary benefit. 
Related to all of this is the Government’s ongoing pledge to bring in what it calls a single core benefit. In every financial review of the Ministry of Social Development for the last 5 years or so we have been asking where the Government is going on this issue and when this benefit will be brought in. The latest answer this time around is that the new Minister expects to ask Cabinet to consider the proposal in 2008—although which part of 2008 remains unspecified. Although I accept that the ministry has in fact as it says implemented 80 percent of its original single core benefit concept revolving around the whole drive towards work first the really hard part which relates to income support remains totally unknown and up in the air. A single core benefit could be a really good thing for beneficiaries if it brought benefits up to genuinely survivable levels and was part of a reform that made our welfare system simpler fairer and easier to administer. However without details both the Green Party and other interested people like beneficiary and disability advocacy groups and beneficiaries themselves will continue to be fearful of what a single core benefit might actually mean—for example if it leads to a reduction in income levels and an even greater loss of any discretion in the system. I am not expecting any particularly good news on where this is going in the near future although we could all be pleasantly surprised. 
The ministry’s financial review also deals with the question of young people receiving the unemployment benefit. I genuinely welcome much of the sterling work that has been done in this area over the last 8½ years—particularly by the Government and the Mayors Task Force for Jobs. However I hope that the reduction in the number of 18 and 19-year-olds on the dole is not done—and will not be done—at the expense of any young person’s right to receive a benefit. I noted with interest the outcome of a recent case in Rotorua where in 2007 the local Work and Income office unlawfully denied access to the unemployment benefit to a number of out-of-work 18 and 19-year-olds. In August five of the young people filed proceedings in the High Court against the Ministry of Social Development claiming that they were being discriminated against because of their ages. They had been told at Work and Income seminars that they were not entitled to the dole until they were 20. In fact of course they were eligible for the unemployment benefit given that they met all relevant criteria and an out-of-court settlement was subsequently reached in favour of the young people. 
As part of that settlement the Ministry of Social Development gave an assurance that it accepted as fundamental that the New Zealand Bill of Rights Act applies to people applying for the unemployment benefit. This means that Work and Income offices—not just in Rotorua but all around the country—must give applicants a fair hearing and that natural justice and due process apply at the interface between the applicant and the department. I hope that the outcome of this case has sent a message to Work and Income offices everywhere that not only should applicants for benefits not be lied to in a bid to keep beneficiary numbers down but also people must be treated fairly and well and not denied entitlements at the whim of a particular case manager or office. 
In the  
Gisborne Herald  
of 1 December last year a trainee social work student Jeanette Schullerquist from Sweden talked about her experiences during a few days of frontline beneficiary casework in Gisborne. She said that she was shocked by how some case managers talked to their clients and: “The benefit rate in New Zealand is so low that it is hard for most people to survive the week. Then when they come in to see their case manager it is like they are being kept down and made to feel really small. … these case workers were being very judgmental and making the beneficiaries feel really small.” This is not a quote from something that happened in 1991 or 1998; this was going on in one of the Tairawhiti Work and Income offices in November 2007. Sometimes it takes an international guest to see things more clearly than a lot of local people. I know that the local commissioner Lindsay Scott responded quite well to Ms Schullerquist’s observations—well at least in the media—and I just hope that services on the East Coast are improving accordingly. 
For those of us who believe in a fairer society for everybody not just for some it is really important that as we face the prospect of quite a significant recession in the medium term we get our welfare system into as good a shape as possible. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 As we are reviewing the Ministry of Social Development which is the largest Government department and which deals with the support of people in New Zealand society who are often very vulnerable I think that it is very important—although not intending to be deliberately negative—to focus on those areas where the ministry’s performance can improve. 
I remember that in the last parliamentary term it was United Future that brought to the attention of the House that although the numbers of people on the unemployment benefit were dropping at a very pleasing rate at the same time the numbers of people on sickness and invalids benefits were skyrocketing. When we looked and did a bit of pathology on those figures we discovered that 50 percent of those who had transferred from one benefit to another had done so because of the condition of stress. We expressed at that time our concern about what was happening with those particular benefits. There is still a measurable increase in the numbers of people on sickness and invalids benefits but as our review showed that pace has slowed down considerably. We are very pleased about that and about the initiatives the Government has put in place with wrap-around services to try to help people on sickness and invalids benefits to come to a place of health and return to some form of employment. 
One of the other things I heard other speakers mention is that we uncovered in this review the fact that the amount of debt owed by beneficiaries is considerable. Of that debt $150 million is due to benefit over-payment and the ministry described to us the reasons why the other sizable lump of benefit debt was around the issue of cost of living. Essential goods are currently at the stage where there are questions whether the current core benefit is at a high enough level. It is very interesting to be having this review in an election year because it begs the challenge to all parties in this House to be upfront about what they will do with benefit levels and whether they will embark on and support any review into the future of those levels. 
It would appear that work on a single core benefit is largely complete. Although a less complex benefit system holds some appeal it is unclear what the status of secondary entitlements like the accommodation supplement will be under this single core benefit system. It is also unclear what discretionary funding will be available to Work and Income workers to deal with cases as they come in with the extraordinary needs that crop up from time to time and how if there is any discretionary funding that will be administered and by whom. 
United Future has an additional concern that we would like to challenge the Ministry of Social Development to consider and that is the fact that many of their clients whether Work and Income clients Child Youth and Family Services clients or Housing New Zealand Corporation clients lack advocacy services. This includes disability clients; we include disability clients under the Ministry of Social Development even though they are technically under the Ministry of Health because the Disability Strategy is clear about the fact that those with disabilities in New Zealand need to be included and need to be able to participate. That is a social need not a health need so United Future would love to see disability issues removed from the Ministry of Health and put under the Ministry of Social Development because we believe that that is the appropriate ministry to be managing the overall needs of those in the disability sector. But it is really apparent with many of the clients of this ministry that they lack proper advocacy services as they approach the ministry with their various needs. It is a very daunting thing to approach a department that has the power to determine people’s incomes the power of whether people get to see their children and under what circumstances and the power to determine how much autonomy people should have over their benefit needs. For those in the disability sector there is the experience of knowing that they will have an ongoing reliance on the people they are appealing to for help and they have to be sure that they have the ability and skill set to make an appropriate appeal that will see a result that is fair and equitable. 
United Future would love to have the Government investigate further what could be done to establish an advocacy service for all clients of the Ministry of Social Development because we believe from our experience at an electorate level that that is needed. Many of the people who come into my office with complaints have a very similar status. They are often poorly educated and not often skilled at articulating their needs so they need someone to articulate those needs for them. 
Hon RUTH DYSON (Minister for Social Development and Employment) 
: 
 In the couple of minutes that I might have I am very privileged to speak in this financial review debate. I will begin by acknowledging all the members of the Social Services Committee particularly those who have spoken today. That committee is extraordinarily ably chaired by Russell Fairbrother. I also acknowledge members of other parties who have contributed very constructively in areas where we put party politics aside and work for the best interests particularly of children and young people. So I acknowledge that.  
I will respond in particular to a point that Judy Turner just made in her contribution where she wished for the Office for Disability Issues to be established within the Ministry of Social Development as opposed to the Ministry of Health. I can tell the member that her wish has been granted. It was established there and it will remain there. As the Minister for Disability Issues I give her that commitment. The advocacy the oversight—the whole-of-Government office—is within the Ministry of Social Development and the member is absolutely right: it is the best place for the Office for Disability Issues.  
I will talk about a number of issues in relation to this financial review and the first is the Pathways to Partnership new funding model and new funding level to which our Government has made a commitment with our non-governmental organisations as recently announced by the Prime Minister. That involved a substantial amount of new money so that contracted essential services will now be fully funded for the first time ever. This is a huge investment in early intervention and family support for better support to be given particularly to children and young people but also to their families.  
Report noted. 
Clauses 1 to 9 and schedules 
A party vote was called for on the question  
That clauses 1 to 9 and schedules be agreed to. 
Ayes 61 
New Zealand Labour 49; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 48 
New Zealand National 48. 
Abstentions 10 
Green Party 6; Maori Party 4. 
Clause 1 to 9 and schedules agreed to.