Menéndez March Ricardo; Sepuloni Carmel; Upston LouiseRICARDO MENÉNDEZ MARCH (Green): Thank you Madam Chair. Just following on those answers. So she talked a bit about—I think I heard correctly—the Ministry of Business Innovation and Employment advice in relationship to that gap between benefits and the minimum wage. Can the Minister provide further details? Again we could have probably gotten those papers at a select committee stage to evaluate them in detail. But can the Minister provide more details about that individual piece of advice actually for example being based on research around the gap between benefits and minimum wage contributing to employment outcomes and whether widening that gap actually contributes to better employment outcomes and whether that advice was also formed out of the experiences of people receiving income support as well who could provide lived experience feedback around whether that gap actually contributes to—and I guess I draw a line around not just employment but good employment right? Because we know that there's such a thing and the Ministry of Social Development has provided research around how people if they don't enter employment that is well matched can go back on to a benefit and so we can end up with this like feedback loop of people going into employment and back on to a benefit because there's not good enough work at matching people into adequate and good employment as well. So I'm just wanting to seek clarification because my question was around research less so advice. And while I recognise officials do their best in providing advice I do draw a line around when research is being used as opposed to just I guess ideological assumptions around whether that gap actually contributes to employment outcomes.One of my questions that wasn't addressed altogether was around whether a child impact assessment had been done. Again I'm really really curious to see whether those tools are being utilised because it is a critical tool that is used in relationship to how children will be impacted by pieces of policy and legislation. And if there was a child impact assessment being done I'm keen to get a sense of what that told us. And if not I'm really concerned about why that wouldn't be used as a tool because it's not—yes it's the child poverty impacts that have been talked about that but there's also other impacts that it could have on children right? I mean we know children living in poverty and increased poverty also have high risk of experiencing poor health outcomes for example and that is captured in other elements like a child impact assessment rather than just simply child poverty figures and kind of just treating them as stats.The other thing that she mentioned that I'm keen to unpack and have addressed is she spoke about the average length that people spend on a benefit. I know she kind of keeps citing this report around some of those outcomes that people on the benefit experience. One of those was low incomes. But I guess my question is: well isn't it the case then that people experience poor outcomes and lower incomes because those have been set by Governments including by setting lower increases to benefits? So I guess my question is: isn't she contributing to the poor outcomes in that report that she's talking about by setting lower increases to benefits? Because there seems to be a contradiction between the report she keeps citing and then what she's doing which is contributing to lower incomes because this bill as far as I'm aware and in relationship to what Part 1 does in terms of the indexation doesn't address employment outcomes at all explicitly or there's no research here that would back this up. So that's why I'm really keen to unpack the recent report that she keeps citing.Then going back to the question I had around the costs of hardship grants and advances this was more about fiscal implications right? And why I'm fixating on this is because several members of the Government including the Minister have talked about that balanced approach in our finances but again when we have cost savings because of lower increases to benefits those costs can be passed on elsewhere. And if she cannot outline what those projected additional costs will be then what is the purpose of this exercise? I think it's kind of not good enough to just say Well look we'll deal with it later and we'll address it in other parts." But we're talking about the impacts that this specific piece of legislation will have and other flow-on effects such as hardship grants and advances. And I don't feel like that has been addressed altogether.Hon CARMEL SEPULONI (Labour—Kelston): I asked a question earlier about the rate of average wage growth which was then followed up by the Hon Grant Robertson. And the way I heard it—and forgive me if I'm wrong Minister—was that it will be set at or it is 5.3 percent versus the Consumers Price Index (CPI) which is 4.7 percent. If the general adjustment is therefore going to take place with those numbers in mind I just want to make the point then that the supplementary analysis report modelling is not right because it has been done at a time where actually there was potentially going to be a window where this year the CPI would marginally outstrip wage growth. But given the numbers that the Minister has said it sounds like that is not the case. What concerns me about that is then that means the negative impact on beneficiaries kicks in immediately as opposed to from next year. So I need to hear from the Minister and get some clarity about whether that is the case. Now if that is the case and the general adjustments are going to be based on the CPI figure of 4.7 which falls below average wage growth as I heard it then that must mean there will be much larger fiscal savings in the forecast period. In the supplementary analysis report it stated it to be $670 million. I want to know what the updated fiscal savings are going to be given the figures around average wage growth and CPI because effectively if there are increases in fiscal savings then that means there is less money that would have potentially gone to those on benefit. And I'm also concerned that means there may be an increase in the number of children compared to what is in the supplementary analysis report who will experience poverty because of this change.Hon LOUISE UPSTON (Minister for Social Development and Employment): Thank you Madam Chair. To answer the member from the Greens Ricardo Menéndez March no child assessment was done on this legislation. In terms of answering the Hon Carmel Sepuloni's question there's been no different process followed than previously. So in terms of the annual general adjustment it will follow the same process as it has previously. And the supplementary papers were prepared earlier and we are now having legislation that we committed to in the election where we would change the annual increases to benefits based on CPI. That is what we are delivering today. It is quite straightforward and it is a commitment that we—Hon Carmel Sepuloni: Point of order Madam Chair. I wasn't asking about a change in process; I was asking about the figures that we have now been presented within the House that we didn't previously have. We didn't know the comparison between CPI and wage growth.Hon LOUISE UPSTON: Which is what happens usually when the annual general adjustment (AGA) is set because as the member will know as a previous Minister in terms of the time frames the AGA work is prepared well in advance of 7 February when those wage figures come out. So fiscal savings or not the point that I just made to the member was to be very clear about the fact that we made a commitment ahead of the general election that all increases to benefit would be indexed to CPI. That is exactly what we're doing. It is exactly what's been done for 31 of the last 35 years. It's not that difficult to understand what we're doing. I accept that members might disagree but we are delivering on an election commitment."