Ardern Jacinda: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — First ReadingText is incorporated into the Bound VolumeArdern Jacinda: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — First Reading[Sitting date: 27 August 2013. Volume:693;Page:13120. Text is incorporated into the Bound Volume.]JACINDA ARDERN (Labour): It is my pleasure to rise and follow on from the Associate Minister for Social Development the Hon Chester Borrows on the Social Security (Fraud Measures and Debt Recovery) Amendment Bill which has been brought before the House. I want to say up front that I appreciate the time that the Minister gave to me personally to give me some extra breakdown details on the bill and how he foresees it working. We have already said that Labour will support this bill to the Social Services Committee but we said at the very beginning that we feel like there are some inconsistencies with different forms of treatment of fraud and we wanted to see whether or not this was an opportunity for us to even up that playing field. That is something we will pursue through the select committee process.I think with debates like this that it is always important to set up from the outset the general principles and values that you want to apply before then setting out the way that you are going to anticipate the policy working. First and foremost we would like to get on the record that fraud wherever it exists is wrong—bottom line. There is no dispute. Fraud wherever it exists is wrong. As the Minister has said and I agree fraud within the benefit system is also particularly destabilising because fraud in that system undermines the entire system for those who need it most and that is why it does need to be weeded out. Equally it then tars other clients with a very unfair brush as does an individual who does not fulfil their obligations to try to seek work. That then tars other people with an unfair brush as does a Minister characterising people in the system in an unfair way. I think it would be disingenuous not to imply that there are times in this House when people who access Government support through a genuine need and legitimate reasons are unfairly portrayed. So that is why we treat these issues with a lotof caution and we seek that members treat fraud across the board in an even-handed way. It is for that principle which I have already outlined that we see it as important.In that regard fraud where it exists in our tax system must always be pursued because just as fraud within social security undermines the system for everyone else fraud and tax evasion undermines the principle that we all have a collective responsibility to contribute to the ability to run this nation to build the roads to build the schools to build the housing system—all of those universals that we consider so important. But not all fraud is treated equally. Why should it not be? If we are saying that in principle they both undermine a system then surely we should be treating them equally. There are provisions in this bill that will not apply across the board and yet they are lowering a threshold the test for prosecution. That is why we want to ask the question: why are we not treating them the same?There are some differences. Scale is one of them. As I said fraud everywhere should be pursued but there is certainly a gap in the amount that is being pursued or at least in our success in prosecuting and reacquiring money that is lost through tax evasion and fraud. Just a comparison: $39 million in the benefit system and it is more like $1 billion as an estimate within our tax system. So that is certainly an area on which we would like to hear a bit more of a public conversation from the Government in terms of how we can do better in that area. Do not drop either. That is not what we are saying. But why when we have had two debates now on fraud within the benefit system have we not had one on this other area where there is so much more work to be done? That is something we implore the Government to do.I have heard it argued though that it is unfair to compare benefit fraud with tax fraud and tax evasion because tax evasion is evasion and it is not fair to strictly label that as fraud. But it is fair to say that that exact thing has been happening with some of the announcements that the Minister has been trumpeting. Not so long ago we heard him point out that great swathes of fraud had been uncovered as a consequence of the Inland Revenue Department sharing information with the Ministry of Social Development. The issue is that not all of that necessarily was fraud. Some of it indeed will be but some of it is just highlighting the blatant inefficiency of our system. It is highlighting where there had been overpayment. Why was that? Well because a large number of people who are getting Government support are actually in work. They are just not earning enough to survive week to week so their earnings are topped up with a benefit of some description.In order to make sure that someone who is working different hours every single week is not being topped up by too much or too little they are required to call Work and Income at the end of each week usually a Friday and state the hours that they have worked. The issue as anyone will know who has worked somewhere like a supermarket or a fish and chip shop like I have in the past is this: I did not always get my payslip at the end of the week telling me the hours I had worked. I would carefully take down what I thought I had done but they were not always necessarily the same thing and that is what is happening with our Work and Income clients. They are calling based on what they know but sometimes they are in precarious seasonal work with fluctuating hours and fluctuating overtime and changing rates and they are not always giving the correct details to Work and Income.When Work and Income staff then go and do that data match they find that sometimes there are discrepancies. At various points we had up to 20 percent of our sole parents in part-time work. We are not talking about a small group of people where this potential error can take place. So all I ask from the Minister is that the next time he does a data-matching exercise rather than standing up and trumpeting the amount of fraud he has weeded out perhaps we could talk about the fact that not all fraud is deliberate;some of it is the inefficiency of our system. Can we address that? Can we address the fact that I have Work and Income clients who come and tell me that Work and Income found it so difficult to manage their—Peseta Sam Lotu-Iiga: I raise a point of order Mr Speaker. I do not mean to interrupt the member but she is clearly getting away from the context of this bill. You allow her to go a little bit away but for 2 minutes now—The ASSISTANT SPEAKER (H V Ross Robertson): Order! I am on my feet. All contributions will be heard and the member is making some valid points and it is a debatable issue. This is a wide-ranging debate. It is the first reading.JACINDA ARDERN: That intervention just demonstrates that the chair of the Social Services Committee does not understand the driving forces between overpayment and what has been characterised by his Government as fraud. If we want to fix the amount of time that is wasted by the Ministry of Social Development pursuing overpayment which is sometimes confused as fraud then these are the issues we need to deal with. So I would hope that we would have a little more enlightenment by that side of the House during this debate. Otherwise we are going to miss that actually in some cases we are targeting the wrong issue. It is a very valid point to raise in the context of this bill. I am sure that the officials will talk about the fact that they spend a lot of time trying to filter between overpayment and fraud and that is the issue I was speaking to.So getting back to it once the Ministry of Social Development has gone through that process of it trying to once it has seen the discrepancies filter out which is which it then needs to go and pursue them. It is an issue around the amount of effort that it then goes into relative to some of the other areas of fraud that we have within our system.One of the things we do want to accept on this side of the House though is that relationship fraud probably represents a significant chunk. It is fair to say that there will be cases and we are certainly aware of them from the side of advocates that some women in particular are left carrying debt from relationship fraud that actually should be apportioned across to individuals who knowingly partook in that fraud. We also must acknowledge that some women are in relationships with a particular power dynamic as well and we need to be mindful of that. Some women also have threats made against them that if they do not fraudulently claim these benefits then their well-being is at risk. All of these things we have to take into consideration when we consider that this bill will amend the Social Security Act 1964 and enable a lower threshold for prosecution of partners when they have been involved in relationship fraud by saying that they can be prosecuted when they ought to have known that fraud was taking place. So the test has been lowered. Our question is—Peseta Sam Lotu-Iiga: It’s still a high test.JACINDA ARDERN: It is very difficult to prove whether someone ought to have known something versus whether they did. It is. We are going to test that out at the select committee; it is something we need to look into in more detail. But our question is that if you are willing to say that someone who committed relationship fraud ought to have known that fraud took place because they benefited from it because there was more money coming into the household why could you not say the same for white-collar fraud? If someone is benefiting from white-collar fraud because more money is coming into the household why is it that a spouse in that case will not be liable for prosecution? That is the kind of question I had when I talked about the principles of treating fraud even-handedly. Those are the kinds of questions we will be raising at the select committee and I hope the Government will take those queries seriously.