Sepuloni Carmel: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeSepuloni Carmel: Oral Questions — Questions to Ministers[Sitting date: 29 April 2015. Volume:704;Page:2999. Text is incorporated into the Bound Volume.]9.CARMEL SEPULONI (Labour—Kelston)to the Minister of Finance: Is the Productivity Commission report released yesterday indicative of a Government agenda to privatise the welfare system?Hon BILL ENGLISH (Minister of Finance):No. It is indicative of a Government agenda to get better results for people who really need them. We are happy to debate the kind of toolset that the Productivity Commission has laid out but I would like to signal to that member and to the Labour Party that we are focused more on getting better results and less on their ideological obsessions. What we are doing is building a system that allows Governments to invest upfront in personalised interventions for the child the individual or the family for a long-term impact and to track the results of that investment. The Productivity Commission has produced a framework that gives the Government a wider range of tools. It has been heavily consulted on with the social service sector to a draft form and now it will be further consulted on before it gives us a final report. But I expect at the end of that that the Labour Party will be out of step with pretty much everybody by sticking to its 1970s models.Carmel Sepuloni: Does the Minister intend to establish a voucher system for social services in New Zealand?Hon BILL ENGLISH: Yes. We are under way in establishing a voucher system particularly for people with disabilities. It is called Enabling Good Lives. It has been broadly welcomed by the disability sector. I suspect that the mass adoption of it by the Australian Government in the form of the National Disability Insurance Scheme is going to put a lot of pressure on New Zealand to further develop a sophisticated voucher system for people with disabilities. The reason why is that it gives them some choices rather than being subject to a system where the Labour Party tells the providers—Mr SPEAKER: Order!Jami-Lee Ross: What progress has the Government made in delivering better outcomes from social services?Hon BILL ENGLISH: We have made considerable progress in focusing on our customers—that is getting to know much better the circumstances and prospects of those most vulnerable New Zealanders. For instance a child under the age of 5 who is known to Child Youth and Family whose parents are supported by a benefit and where either parent is in contact with the Department of Corrections—and there are a lot of those families; around 470 of them in Rotorua for instance—is around five times more likely to end up on a long-term benefit and seven times more likely than the average to get to be in prison before the age of 21. In the light of that information we feel a moral obligation as well as a fiscal one to act now to reduce the long-term costs and we are not—Mr SPEAKER: Order!Carmel Sepuloni: Does he agree with the findings of the Productivity Commission’s draft report he commissioned that the Government faces incentives to underfund contracts with NGOs for the delivery of social services with probably adverse consequences for service provision; if so does he agree that greater contracting out could harm service provision?Hon BILL ENGLISH: I agree with the first one but not the second one. The Government often does deliberately as a result of Government policy actually pay less than the full cost of services and often the users of those services need a higher level of more sophisticated service than what we currently offer them. There is no evidence at all that contracting out as the member calls it will reduce service provision. Sometimes that is the right way to do it. For instance the Government owns no elderly care beds in New Zealand. It is all contracted out. That has been a bipartisan approach for many years with a highly vulnerable population. There are other areas where there are benefits from competition and also benefits from cooperation.Jami-Lee Ross: What results has he seen from investment in Better Public Services?Hon BILL ENGLISH: One of the first results we are seeing from taking an investment approach to public services is a much better understanding of our customers. The reports now published 6-monthly into the welfare liability have lifted the lid on a very complex ecosystem of dependency. Now we are starting to take initiatives in order to change the way that system works. For instance around 70 percent of the people who sign up for a benefit in any given month have been on a benefit before. They are long-term regular and returning customers. In the past we have thought that because we found them a job once that was the end of it. In fact they need sustained support and employment and we expect to be taking more measures in order to back up that initiative. But there will be hundreds of others that will involve contracting out will involve competition will involve the private sector and will involve better results.Chris Hipkins: I raise a point of order Mr Speaker. I just ask that you perhaps might reflect on this particular question today which was set down by my colleague Carmel Sepuloni regarding a report of the Productivity Commission and a particular aspect of the report that she was questioning on the very broad nature of the supplementary questions allowed from the Government and the extensive and lengthy answers from the Minister and whether in fact that is acceptable.Mr SPEAKER: I certainly will reflect very carefully on the questions that have flowed. The answers on this occasion have been long and on two occasions I have curtailed the answer as it has continued. But it is an issue that is I think relatively important to this House and when I looked at the tone of the question about a suggestion of privatising the welfare system I felt that the topic was important enough to have a reasonable airing in this House. But I will reflect on the nature of the questions that have flowed from the primary question and I certainly accept the member’s point that some of the answers have been quite long.Carmel Sepuloni: Does he agree with the finding of the report which he commissioned that “Problems with contracting out are often symptoms of deeper causes such as the desire to exert top-down control to limit political risk.”?Hon BILL ENGLISH: Yes.Carmel Sepuloni: Does he agree that the Government needs to take responsibility for system stewardship and for making considered decisions that shape the system including taking the overarching responsibility for monitoring planning and managing resources in such a way as to maintain and improve system performance?Hon BILL ENGLISH: Yes the Government can do a better job of what the Government does. We are still unravelling the damage done by the previous Labour Government to our social services delivery where that Government turned it into what I would call a dumb funding system. Communities and families have an important role as well as Governments—in fact a more important role. In fact one of the programmes that the commission refers to is Whānau Ora which is designed around the radical proposition that a lot of our most dysfunctional families can actually heal some of their own problems and improve some of their own aspirations. We are going to go along with that because—Mr SPEAKER: Order! [Interruption] Order! The question has been answered.