Borrows Chester: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeBorrows Chester: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — Second Reading[Sitting date: 18 March 2014. Volume:697;Page:16772. Text is incorporated into the Bound Volume.]Hon CHESTER BORROWS (Associate Minister for Social Development):I move That the Social Security (Fraud Measures and Debt Recovery) Amendment Bill be now read a second time. The bill is about protecting the integrity of the welfare system and it is about ensuring that it is there for those who are genuinely in need. It is just one of the steps the Government is taking to ensure that those who rip off the welfare system are held to account. We know that the overwhelming majority of people receiving welfare assistance genuinely need it. They follow the rules. They are honest with Work and Income and receive the help they need. The bill targets the tiny minority who take money they are not entitled to.The changes are designed to be sensible fair and practical. The premise of the bill is simple. Relationship welfare fraud claiming a single or sole parent rate of benefit such as sole parent support while being in a relationship takes two people. The fraud occurs only when a partner is there to create it yet in most cases only the beneficiary is held to account when a fraud is discovered. Their partner who has created the fraud facilitated it and benefited from it gets away with it and that is not fair. That is why this bill will hold to account partners who knew of the fraud or who were reckless as to whether there was a fraud. It will allow for the recovery of money from the partners who knew or ought to have known they were part of a fraud. It means that one partner usually the woman will no longer have to bear on her own the consequences of that offending of two people.As well as this the bill makes important changes to ensure the Government’s continued ability to recover fraud money. Taxpayers expect that when money is taken from the Government it will be recovered if at all possible as long as it is in the public interest to do so. This bill will ensure that that occurs subject to appropriate directions in the way the money is recovered.As a result of the select committee processes there have been a number of recommended changes to the bill and I want to acknowledge the work of the Social Services Committee. Although no issue before this House is ever entirely free from politics I understand that members have engaged on this bill in a frank and constructive manner and I thank them for that. I want to thank both Government members and members opposite. I also want to thank and acknowledge the individuals and organisations that made submissions on this bill. The feedback from submitters was insightful and helpful. The majority of submissions were supportive of or recognised the fairness in what the bill aims to do.The Social Services Committee has recommended a number of small sensible improvements to the bill and one of the recommended changes clarifies the new offence provision. It clarifies that to be liable for prosecution a partner is not required to know the precise entitlement or the precise nature of the excess amount the beneficiary was receiving.A small number of amendments were also recommended around the debt recovery provisions. Some submitters voiced concerns that the bill could be read as going against New Zealand’s international human rights obligations. In response to this the committee recommended a change that ensures that staff take into account all relevant matters when determining the rate and method of recovery therefore ensuring greater consideration of people’s circumstances. Again I want to thank the Social Services Committee members for their time and effort.I would like to take a moment to address some of the concerns raised in the minority report from the select committee. Holding people criminally liable for activities they were reckless to is not new in the law and I am happy to point members to any number of provisions in the Crimes Act and Summary Offences Act that do this. I also reject the concern raised that we should require a positive action by someone before holding them criminally liable for their fraud. That ignores the nature of such welfare fraud that the partner can deliberately by omission create facilitate and profit from that fraud.The concern over changes to allow the Ministry of Social Development to receive information without first seeking it from the beneficiary is misplaced. It ignores that this change was made at the start of 2013 and even before then in 95 percent of cases the information had to be sought from other parties only after a month’s delay because the information was never supplied. To suggest that it might lead to human rights and privacy violations and corrupt practices by officials is a slander to the many dedicated and professional investigators employed by the Ministry of Social Development.I take offence at the contention that some parties opposite seem happy to repeat and that is that the Government focuses on welfare fraud and ignores tax fraud. The numbers show this statement to be misleading. The Government spends more than four times as much on tax compliance as it does on chasing welfare fraud and overpayments. This Government has invested almost $200 million of new funding into fighting tax avoidance and evasion yet no new funds for chasing welfare fraud and in 2011-12 the Inland Revenue Department imposed more than $600 million in penalties and interest for failure to pay tax compared with only $124000 in penalties imposed on those who took money from Work and Income that they were not entitled to. It all leaves me wondering why some members of other parties are so reluctant to discuss welfare fraud that they seek to detract from the topic whenever it arises. Is it because they are ashamed of the casual disregard their party showed taxpayers and their money when they were last in Government? Or is it because they cannot bring themselves to admit that this Government has come up with a simple fair and sensible solution to ensure that welfare spending goes to people based on need and not greed?Finally I would like to touch on other work going on around this bill which is just one part of our welfare fraud reforms. We have increased information sharing between Government agencies so that fraudsters are picked up early. At last count this had resulted in over 5300 illegitimate benefits being cancelled worth at least $56 million per year. We have set up a team working across social sector Government agencies to take an all-of-Government approach to address and to identify fraud committed against Government agencies and we are placing those who have previously ripped off the welfare system under greater scrutiny as the public would expect us to do. These people will have to prove to us that we can trust them before these restrictions are removed. We are ensuring that the ministry can prosecute people who abuse the welfare system including through this bill those who sit back reap the benefits and know that their partner is defrauding the welfare system. The changes in this bill are needed and they are fair. I commend the bill to the House.