Bradford Sue: Financial Review Debate — In Committee 
Bradford Sue: Financial Review Debate — In Committee 
[Volume:646;Page:15076] 
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.