7. Question No. 7—Social DevelopmentMARAMA DAVIDSON (Co-Leader—Green) to the Minister for Social DevelopmentQuestion No. 7—Social Development7. MARAMA DAVIDSON (Co-Leader—Green) to the Minister for Social Development: Does she agree with the Child Poverty Action Group that We need to increase the benefit levels for a start and if another crisis occurs for a family Work and Income should have the capacity to forgive impossible debt."?Hon CARMEL SEPULONI (Minister for Social Development): This Government is committed to making sure we have a welfare system that is fair and accessible for all New Zealanders. This is reflected in our 2018 $5.5 billion Families Package investment and our 2019 Budget announcements to index main benefit rates to increases in average wages remove a harmful sanction that penalises sole parents and increase abatement thresholds in line with minimum wage increases. On top of that we've already started to address concerns around debt through the changes to the Credit Contracts and Consumer Finance Act to better provide protection for families from irresponsible lending and harmful mobile trading practices. The Ministry for Social Development (MSD) is also ensuring that people are paying debt back at lower rates which is the fair and just thing to do while still upholding the integrity of the welfare system. Is there more to do to address income adequacy in the welfare system and the impact of debt? Yes.Marama Davidson: Is she satisfied that hardship grants are the best tool to meet people's immediate needs when there has been a significant increase in hardship grants in the last quarter especially for food?Hon CARMEL SEPULONI: It's never satisfying to see people who need to come to MSD for hardship grants especially for food. I am heartened though that people know that when they need the support of MSD they are able to access that. It is important to note that hardship grants are up in areas where there are housing pressures—we cannot ignore that part of the picture—and I'm relieved that with this Government's actions we've seen a significant increase in public housing and that our target is on track. It's important to understand that hardship grants are not the only tool we use to support people in hardship. MSD also funds building financial capability providers to work in the community with people in hardship. We also now have the building financial capability champions in Work and Income sites available for clients who might need their assistance. We also have increased proactive messaging in client letters and have enhanced information on the MSD website. And MSD also have improved the information exchange between Inland Revenue MSD and the Ministry of Justice to support better management of debt including helping to prevent unnecessary overpayments and providing visibility of common debtors.Marama Davidson: Does she agree with the Welfare Expert Advisory Group that "This cycle of inadequate payments requiring one-off assistance top-ups and resulting in debt further limits the ability of benefit recipients to sustain themselves and increases stress"?Hon CARMEL SEPULONI: We know that changes across the whole system are required to ensure people in hardship are better off. It is important to note that food grants are a non-recoverable needs grant that can be accessed through MSD and so does not add to the additional hardship or debt incurred by MSD clients. We are unapologetic about making the system more responsive to those that need support from MSD. And alongside stabilising people's financial situations and addressing the hardship that they are experiencing we have also put a significant amount of investment into work focus in supporting people where able to be earning learning volunteering or caring. Marama Davidson: What is MSD doing to ensure people's needs are the primary consideration when deciding whether to provide a grant that must be repaid or a grant that does not need to be repaid? Hon CARMEL SEPULONI: Accessing any type of grant whether recoverable or non-recoverable requires MSD to have a good understanding of a client's situation. MSD's approach has always been to prevent debt wherever possible. That means dong things like looking at whether the client can be supported through other means—for instance the low- or no-interest loans through Good Shepherd—in ensuring that a client is in the first instance receiving their full and correct entitlement. Where assistance is recoverable MSD will look at the ability of the person to repay debt and ensure repayments are manageable. MSD accepts and I accept there is more to do in this space but I think that we are heading in the right direction. Marama Davidson: Is she open to reconsidering MSD's powers and policies in relation to debt to ensure these are consistent with Government wellbeing priorities? Hon CARMEL SEPULONI: I will continue to consider advice received that ensures we have a welfare system that is fair and accessible for all New Zealanders. I have signalled in my April Cabinet paper on the welfare overhaul that MSD is already focusing on ways to minimise debt creation and ensure debt repayments are sustainable as outlined in the recommendations. We've also initiated cross-Government work to address managing debt to Government agencies. Hon Louise Upston: Can the Minister confirm her answer to written question No. 34006 that "the Ministry of Social Development expects to recover all debts owed by current or former clients"? Hon CARMEL SEPULONI: Can she repeat that question sorry? Hon Louise Upston: Can the Minister confirm her answer to written parliamentary question—Hon CARMEL SEPULONI: Oh a supplementary—sorry. Hon Louise Upston: Do you want me to repeat it again? SPEAKER: Right let's start again. I called a supplementary question. Hon Louise Upston: Thank you Mr Speaker. Can the Minister confirm her answer to written question No. 34006 that "the Ministry of Social Development expects to recover all debts owed by current or former clients"? Hon CARMEL SEPULONI: The legislation in the Social Security Act is very clear that where MSD is at fault for a debt being incurred then MSD is able to write off that debt. But where the debt has been incurred by the client through no fault of MSD then the expectation is that the debt will be recovered."