Prasad Rajen: Social Security Amendment Bill (No 3) — First Reading 
Prasad Rajen: Social Security Amendment Bill (No 3) — First Reading 
[Volume:671;Page:17816] 
Dr RAJEN PRASAD (Labour) 
: 
 I am pleased to take a call on the Social Security Amendment Bill (No 3) and I say to the previous speaker that yes we will support this bill probably through all of its stages. But let me also say to that member that we remind him and we will remind Government members of all of their follies in the many other areas that also relate to many of the issues raised in this bill and the principles that speakers from the other side of the House have already talked about. So yes we will take every opportunity I tell Mr Todd McClay to do those things as well. 
The first point is that this is correcting legislation which is designed to fix two problems that have arisen—and yes we can understand that. The first arises from a decision of the Social Security Appeal Authority. That appeal authority has found a hole somewhere and it wants that hole fixed and to have a decision. This relates to section 71A of the Social Security Act 1964 which does not cover weekly compensation payments made by employers accredited under the ACC accredited employer scheme. So the practice of reducing dollar for dollar income-tested benefits by the amount of compensation for injuries at work paid through ACC by accredited employers is illegal and therefore has to be fixed. So I can see the need for correcting legislation which is what this bill is. 
It is also interesting to note that the scheme covers a lot of employees—about a quarter of all employees are caught by this particular scheme so it is quite important. There is a financial incentive for employers to be part of the scheme because they pay lower levies if they are in this particular scheme. If only some income benefits came under the scheme and not others we are told that that would create extra costs for employers and inequality amongst different types of beneficiaries. The word “inequality” comes up quite often in this bill and the Minister mentioned “inequality” in her own speech as well. I just wish that the Government was as quick also to address the many other kinds of inequalities we have seen because some of what the Government has introduced under equality measures so to speak are really “inequality” measures. That has found many New Zealanders going backwards. Much of the tax switch for many of our citizens has had the same effect as well. 
I can see how the regulatory impact statement says that the return to full-time or part-time work could be seen as a disincentive if the compensation were treated as income and the full benefit was paid out. So if somebody received the full benefit as well as some income then if that were cut off there really would be a disincentive for people to go back to work. The benefit plus the income would be higher than one would ordinarily receive so would thus act as a disincentive. Again this is a recurring theme. The assumption always is that those who are poor and those who are on low wages are somehow out there to get the system so we must screw everything down to the lowest common denominator in order to make it as difficult as possible. This bill in a sense does that. It tries to take everything down to the lowest common denominator. The point though is that this is not being done in a consistent manner. 
There are many other areas where disincentives are a recurring theme but they are not addressed. However we have to accept that there are good reasons for correcting the problem that has arisen with section 71A of the Social Security Act 1964. The approach taken is to make it legal for these deductions to be made for those people on weekly compensation payments. The Government has rushed this legislation quite urgently and it is important to discuss it now. But again when we look at the total amount of money that this provision will save we find that the regulatory impact statement says that the problem if not corrected would cost an additional $700000 in benefit expenditure per annum. So there we are—$700000 in benefit expenditure per annum is what this bill is trying to hold and what this bill is trying to fix. 
I agree with Katrina Shanks that if there is a problem with legislation we should fix it. But for something with such a small annual dollar value one wonders whether this is the priority. Given all that is happening at the moment we ask whether this is the priority at this time. Is this part of the Government’s plan for getting our economy going? Somehow it is always people at that end of the socio-economic spectrum who are the ones being watched most of the time when an amount as little as $700000 which we might pay off extra in a year is something that this particular bill is being brought forward to try to resolve. Again that masks the fact that the Government does not have a plan. This is part of its economic plan and if this is what it is—and measures like this—then I think we are in pretty serious difficulty. The bill also makes the correction retrospective. 
Retrospective legislation always leaves a bad taste in one’s mouth wondering if it could be avoided etc. Perhaps when we look at the bill in the select committee we will see if it is reasonable. 
There is one good provision in the bill as well and it is that the appeals currently going through are saved. If those appeals are successful then they will be accepted. So those appeals are not frustrated and I congratulate the Minister and the officials on thinking that through and making sure that at least retrospective legislation takes account of something that might have happened perversely. The regulatory impact statement also makes it clear that if the provision was not retrospective there could be an additional $3.2 million of one-off payments coming out of those kinds of appeals. I guess that provision takes care of the risk. 
There is a second issue that the bill addresses which relates to the inconsistency between policy and legislation as set out in section 61EA of the Social Security Act 1964. This inconsistency has the unintended consequence of giving access to accommodation supplements to some full-time students when it is the intention that their conditions are to be regulated by the Student Allowances Regulations 1998 and the student loan scheme. There is another bill currently before the select committee that is using the same kinds of principles to make sure that students and student loans are taken care of by that particular scheme. So it is really about unintended consequences. 
I am pleased the Government is looking at unintended consequences. As this relates to ACC as well I wonder what thoughts were given to the unintended consequences of coming down so hard on ACC payments for the treatment of sexual abuse victims. Where was the unintended consequence of that type of policy that the Government has brought forward? The effect of that policy on many women for many many months was very very serious. I know my colleague Lynne Pillay received many letters that said that that policy had taken people’s lives backwards. There is a little inconsistency in what the Government is doing. There were clear unintended consequences of a particular policy the Government brought forward under ACC affecting sexually abused women. Yet in this bill the Government is very careful to make sure that the unintended consequence is addressed. This provision will exclude students who are eligible for assistance under the student loan scheme. 
Labour will support the bill going to the Social Services Committee. I am sure there are many other aspects of the bill that I have not fully understood so I look forward to robust discussion and debates in that committee of which I am a member. I look forward to seeing exactly what some of the other unintended consequences are of this particular policy. It will give us a broader opportunity to look at the Government’s plans in this particular area and we will come back to the House to debate other areas as well. Thank you.