Ardern Jacinda: Support for Children in Hardship Bill — In CommitteeText is incorporated into the Bound VolumeArdern Jacinda: Support for Children in Hardship Bill — In Committee[Sitting date: 10 November 2015. Volume:710;Page:7861. Text is incorporated into the Bound Volume.]JACINDA ARDERN (Labour): I appreciate the context that Carmel Sepuloni has given on this bill both as our social development spokesperson and also as a member of the Social Services Committee. I think she has rightfully acknowledged a number of really important people and not least those who are raising children in these circumstances. But I think we should also acknowledge the fact that this bill has come to the House and acknowledge groups like Unicef Child Poverty Action Group and the Children’s Commissioner because they have changed the environment in which we are considering child poverty issues.That leads me to then look at the context of this bill and ask in Part 1 are we addressing what has been identified as the key issue around child hardship because it is of course called the Support for Children in Hardship Bill. It is called that for a very specific reason and I just want to talk about that a little bit.There are 305000 children in poverty based on an income measure but that is not whom this bill targets. We can see that by looking at Part 1 of the bill and clause 3 the “Principal Act” which states: “This Part amends the Social Security Act 1964.” We are here amending only the Social Security Act rather than amending broader tax credit legislation for instance that may affect a wider bracket of children. So of the 305000 children we know who are in income poverty we know that two out of five of those children are from families who are in paid work so they are not necessarily solely dependent on the Social Security Act. We know also that some of those children however will be and they might be picked up. But in fact this bill if I recall correctly targets roughly—what is it Minister Tolley—10000 children of a much broader bracket of children.Looking at some of the regulatory impact statements to try to get a sense of if based on information from the Children’s Commissioner we know that there are—and this is incorrect now; it is higher—305000 in income poverty where in this definition the bill was targeted. The Government was quite clear that it wanted to target material deprivation and that is what is then translated into hardship material deprivation which in New Zealand is roughly about 180000 of those children. Those children are ones who based on a scorecard are determined to have a certain number of enforced lack—things that families cannot afford to purchase in order to make sure that their lives reach a certain standard of living. That is where the Government said it wanted to hone in. How then did we end up with amending just the Social Security Act in order to target material hardship? Well we can see a little bit as to why that is in the regulatory impact statement.One of the first bullet points in the regulatory impact statement states: “The fiscal envelope available for the package”—that this bill is set around amending social security—“was based on Ministerial considerations of New Zealand’s current fiscal position and other competing priorities. The Government indicated scalable options should be developed within a fiscal range for the package of up to $1 billion over four years ($250m per year). Because the Government’s overall objective was to take more immediate action to reduce material hardship amongst children Ministers signalled an interest in options that would relatively quickly improve the material resources available to a family through the package.”So we have got two indications there. They want it to be quick and they want it to be within a limited fiscal package. That is important because in this bill in Part 1 instead of an amendment to the Social Security Act we could have been debating an amendment to the Working for Families framework. We could have actually been debating here tax legislation instead of benefit legislation. Why were we not? Well when Bryan Perry came to the select committee at his last appearance I asked that question: “Why Mr Perry did the Government not amend the family tax credit instead of the Social Security Act?”. As this Committee will well know the family tax credit goes both to beneficiaries—which counters the Minister’s claim that this is the first time there has been an increase in income for beneficiaries; Working for Families did that too—and to low-income families. So it would not have targeted just the material hardship kids; it would have targeted the income poverty kids as well. That is an important difference to point out as we debate Part 1 of this bill because it is still a grave disappointment to me that we are debating just the Social Security Act instead of tax legislation.The second reason why it is a disappointment that we have narrowed the frame to the Social Security Act is that Jonathan Boston had done a considerable amount of analysis about what it would take not just to increase the incomes of families in hardship but to lift them over the poverty line. The Minister in the chair the Hon Anne Tolley knows as well as Labour knows how difficult it is to do that and the reason we know that is that we did the analysis ourselves when we looked at the Best Start package.Boosting a family not just up but out of poverty means getting them out of that 60 percent median income threshold or maybe if you are going to be a little tighter—because we know that there are two measures—there are 305000 at 60 percent of the median income or less but those at the hardest end of poverty are at 50 percent or less of the median income. Lifting those kids out as Jonathan Boston modelled would take a lot more than what this amendment to the Social Security Act does. We are looking at up to in reality not much more than 20 bucks whereas on Jonathan Boston’s modelling it is more like $60 if you actually want to make a significant difference—and per child. An important point here is that this is not a per-child payment that we are debating in Part 1. We are debating a per-family payment. So we know that the amendment to the principal Act the Social Security Act is not substantive in that regard and will not necessarily make the difference to children in hardship that this bill purports to make.We are also equally worried as my colleague has pointed out about some of the Part 1 changes in definition. Whilst the Government was chucking out this carrot it obviously decided it needed a stick. I find that really disappointing because overwhelmingly this change was welcome. That stick was not only entirely unnecessary but was actually to the detriment of the families the Government was trying to help and we see that in clause 4 with the change of definition of the term “part-time work”. It now means not less than 20 hours and in combination with that we have also seen a change in the definition of when a family would be work tested. At the moment it is age 5 because we make the assumption that the provision of State schooling kicks in at that point. The Government has dropped it down to age 3.One assumes that makes an assumption around the provision of early childhood education but we cannot assume access to early childhood education in great parts of New Zealand. In fact in South Auckland analysis has been done around the gaps in early childhood education. One simple way that this side of the Chamber and my colleagues Poto Williams and Carmel Sepuloni have put it to the select committee was creating a carve-out to say if you cannot access early childhood education then these clauses should not apply to you. Those tests as set out in clause 4 should not apply to you because simply the assumption is that you are freed up from carer duties if you are able to have a 3-year-old in free early childhood education. That is problematic if that early childhood education is not available. Surely that is a fair and reasonable clause to put in here and we tried this in past welfare bills. We have tried to say that we should create a few exemptions and give the discretion just in case.The other point that I think is really important to make is that this bill is somewhat naive to the nature of part-time work. Let us be honest about where part-time work exists. Part-time work exists in retail hospitality service and call centres—things that operate outside standard school hours. Yet we have seen before that the way Work and Income operates is that if work is available and it considers it to be fair and reasonable you have to take it or your benefit is cut even if it is totally inappropriate when stood up alongside the availability of early childhood education hours. That is another flaw in the bill.In fact the regulatory impact statement even acknowledges that in terms of work itself which the Government is driving as being the sole answer to child poverty you can still exist in poverty even when you are trying to cobble together work. I want to read out from the regulatory impact statement: “A key driver of child poverty for households with adults on lower wages is too few paid employment hours”. It acknowledges there are not enough paid employment hours yet we are about to penalise people who cannot find ghost jobs. It is absolutely outrageous that as unemployment grows we are putting in place penalties for the most vulnerable people. Minister you could have given this carrot without the stick and we would have applauded that.