Benson-Pope David: Financial Review Debate — In Committee 
Benson-Pope David: Financial Review Debate — In Committee 
[Volume:630;Page:2462] 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 First of all before I go into the detail of some of the comments that have been raised as part of the financial review I would like to acknowledge the highly professional and successful efforts of the staff of the Ministry of Social Development. I guess it is a testimony to their professionalism that the chief executive Peter Hughes and one of his senior managers Mr Craig are here this evening. No one should be surprised at the commitment those senior managers put into delivering absolutely critical outcomes for our community. 
I also want to thank the front-line staff of Work and Income and the ministry in general for their professionalism and their dedication to the people of this country. Whether they be in family and community services in policy areas or in management the commitment to reintegration of previously separate Government functions has been extraordinary. It is because of the professional thorough and cost-effective way that the Ministry of Social Policy and Work and Income has been reintegrated that Cabinet has made such a positive decision in respect of the further reintegration of Child Youth and Family Services with the ministry. I am sure we can all look forward to the successes that will flow from that decision and the same sorts of savings in efficiency—but certainly not in funding because that was never intended as part of the decision. 
I think also that management is reflected in the most successful delivery in all sorts of areas that we have seen in recent times—some have been announced; some are in policy development. I refer in particular to the concept and development of the new service model the extraordinarily extensive work in benefit reform that previous speakers have referred to—and as in the case of Ms Bradford they will clearly be involved in some of that policy development—and most important in the Working for Families package which was so well received last year and over the last weekend by so many members of our community. I will come back to that in a little while. 
I would like first of all though to go to the questions about early interventions that were raised by the National Party speaker. The ministry began work on early interventions in 2004-05 and developed a cross-sectoral strategy to improve outcomes for children. Those early intervention programmes are a comprehensive coordinated support system for families and most important the strategies build on other Government initiatives that are simultaneous such as early childhood education and social assistance in health. 
The ministry is currently evaluating the take-up and effectiveness of all those programmes. Some of them have been detailed in the report so I will not waste the House’s time with that. But the key factor is that over 4 years expenditure of $43.7 million has been allocated towards those initiatives. Nothing could state more convincingly or powerfully the commitment of this Government to breaking some of the cycles of violence in our community through early interventions—both early in the age of the problem and early in the life of those involved. 
In terms of the issues raised about debt management it is important to separate the two streams. The first one is recoverable assistance which is loans approved for costs that have to be repaid. These debts have increased—I guess reflecting the increased costs of living and unplanned expenditure. However the second stream overpayments of benefit entitlements and so on has remained stable over the last 4 years and in fact it reduced slightly by about $8 million between 2001 and 2005. 
Policy changes in respect of the Working for Families package will make a huge difference. I think we already acknowledge that in the extraordinary media coverage of families young and old that are responding to the recently discovered reality over the last few days as to what Working for Families means for them. Clearly those initiatives will make absolutely enormous differences to beneficiaries with families by assisting in reducing the demand for that sort of recoverable assistance. 
I would like also to talk more expansively about the comments that were made about growth in sickness and invalids benefits. This is an important focus area through the whole of the OECD. In the last year to December the growth rate of sickness and invalids benefits in this country fell to 2.7 percent. Those benefits grew at a rate of 69 percent and 84 percent respectively under the National Government. That is not to mention that unemployment at the same time in the 1990s grew 11 percent. This Government is getting on top of a trend that was clearly out of control under National. It was the National Government that in 1995 introduced the stress and depression categories so it is pretty rich for those members to criticise as they do the fact that people are succumbing to stress and depression and receive benefits as part of that. 
The thing that saddens me the most about this is the constant attack by the National Party on doctors. Work and Income staff who assess applications for sickness and invalids benefits are absolutely reliant on the professional medical opinion of clinicians. Work and Income staff are not doctors and they operate under strict instructions that it is the role of medical professionals to determine the state of a client’s health as it might relate to that client’s benefit application. While I understand it is not unusual for the National Party and particularly Ms Collins to attack beneficiaries I am rather surprised and disappointed she has taken that attack and extended it to medical practitioners. 
I guess the example of the figures from my own electorate in Dunedin show the clear improvement since Labour took office. Between 1999 and now the total number of people receiving an unemployment benefit in Dunedin has dropped by 4046. That is a 74 percent drop. Between 1999 and 2005 the total number of people on all benefits—unemployment domestic purposes sickness and invalids—dropped also by 33 percent. That is a decrease of one-third—3870 fewer people are receiving benefits. Can I say to the Opposition for whom beneficiaries are such an easy target that behind the statistics—and they are improving all the time under this Government—are the realities of Kiwis getting on with supporting their families working towards their individual goals and making real contributions to our communities and local economies. They are the real success stories that we all should be so proud of. 
In the remaining minutes available to me I would like to spend a little time talking about the Working for Families package. Alongside the other changes that I have alluded to and the matters that are discussed in the financial review—reviewed so positively I must say by the Social Services Committee—the Working for Families package has to be the single greatest support in this country for young men and women especially working people and their children. That package is delivering very welcome targeted tax credits to Kiwi families to help them raise their children. Most people in this House are aware that children deliver extra costs to families and that is why the targeting is so appropriate. 
Around 85000 more families will benefit from the 1 April changes as a result of the family tax relief package and that takes the total to around 350000 families receiving tax relief in 2006. Almost three in every four New Zealand families with dependent children are entitled to family assistance tax credits as from last Saturday. Almost all families with children earning under $70000 per year will become eligible for family tax relief and many families earning between $70000 and $100000 will also be eligible—at much lower levels of course. This package is costing an enormous $1.6 billion over its term and families access their tax credits which is 90 percent of this income through the Inland Revenue Department. 
For example as from last Saturday a family with two children aged 11 and 16 earning $67000 a year and paying say $350 a week on their mortgage will get an extra $68 a week in the hand from their family assistance tax credits. From 1 April next when there is a further increase in family assistance that amount will increase by another $20 to $88 week. Contrast that with across-the-board tax cuts which deliver the highest gains to people with the highest incomes regardless of whether they have children. 
Of course the new in-work payment will be introduced to provide more support to low and middle income working families with dependent children to make work pay. Not many people in our community have any doubt about whose policy is the more desirable in these matters. 
Report noted.