Moroney Sue: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeMoroney Sue: Social Security (Fraud Measures and Debt Recovery) Amendment Bill — In Committee[Sitting date: 08 April 2014. Volume:697;Page:16951. Text is incorporated into the Bound Volume.]SUE MORONEY (Labour):It is a pleasure to rise and speak on Part 1 of the Social Security (Fraud Measures and Debt Recovery) Amendment Bill. Can I say at the outset that with many many reservations the Labour Party is supporting this bill. Part 1 is where the substantive amendments take place. But I do want to at the outset put on record our unease with what this bill does represent. It is one of those bills—and Part 1 with the substantive amendments I think demonstrates this—where the Government has been all too quick to bring out measures designed to make it look like it is harsh on beneficiaries. This bill is another one of those. This is about welfare fraud measures and debt recovery.But the fact remains that if the Government was actually serious about fraud measures and debt recovery it would go after tax fraud first and foremost because that is where the vast amount of fraud actually happens in this country. Basically the facts speak for themselves. Relationship fraud amounts to around $20 million a year. The Inland Revenue Department estimates that tax discrepancies amount to over $1.2 billion a year and that annual tax fraud is about $140 million at an absolute minimum. So I want to say at the outset that although fraud in terms of the welfare issue is not acceptable—and that is why the Labour Party is supporting this bill—it is dwarfed absolutely dwarfed by the tax fraud that goes on yet we are not taking the same sorts of measures.In Part 1 the sorts of measures that are being taken by the Government are around ensuring that the spouse or partner of someone who has committed benefit fraud is also captured and can be held accountable for that fraud. I listened very carefully to the submitters who came for the Social Services Committee hearing on this bill. There were not very many of them but what they had to say was really important and worthwhile listening to. I was concerned about some of the gender impacts of Part 1 of this bill.We did have a number of women’s organisations that came forward to support the bill. What they said was that quite frequently in their experience although the beneficiaries themselves were female and often sole parents actually they believed that sometimes those women had been forced into committing welfare fraud by their partners. It was not their idea at all. It was an aggressive partner or maybe even sometimes a violent partner who was coercing them into committing this welfare fraud. So it was interesting to hear that sort of gender perspective on Part 1 of the bill. Those women’s organisations were saying that actually they thought that women were unnecessarily shouldering the responsibility for welfare fraud and that often it was their partners who were actually instigating it to start off with.We did agree with those organisations but we also agreed with the Law Commission when it came and raised issues with the select committee around the burden of proof because effectively what this bill does and it does it in Part 1 is that it does not have a very high level of the burden of proof—of whether the partner or spouse of the beneficiary who has committed the fraud was actually at the forefront of that or not. This is a new precedent that is being set by this law and that is what the Law Commission came to discuss with the select committee. It told us of its unease about it.The Labour Party shares that. In fact we said so in a minority report on the bill—that we have some major reservations about it. We are concerned about the departure from the general principles of criminal law that a positive act is normally required to ground criminal liability. This bill for the first time does not require that to be established. There is no requirement for it to be a positive act—that the person actually was an instigator of it. Rather it just says that they needed to have either knowledge of or a failure to report another’s offending for it to be covered under this bill. That is normally insufficient to ground criminal liability. But this bill changes all of that and we are concerned about the precedent that it sets.I will say again that we will probably be a little less concerned about the precedent that it sets if it was actually applied equally. But as this Government is inclined to do it actually wants to take harsher measures against people who are more vulnerable and for people who are committing corporate tax fraud it really does not seem that bothered about them. So it has got loopholes for Africa about what corporate people with lots of resources can do in the area of fraud but when it comes to people who have not got so much then it seems to want to clamp down on them very very hard. I think it demonstrates the—I am not allowed to use that word. I am just trying to think of the word that I can use. The one I wanted to use begins with “h” and I cannot use it. It demonstrates the I will call it ironic approach—let us say—of the Government where it does seem to pander much more to people in our society who have a lot. Let us be frank. The Government is tailoring a lot of its bills and a lot of its policies to help out the people at the wealthy end of the spectrum but it is very very harsh when it comes to people who are at the lower end of the spectrum and this bill reflects exactly that.Just coming back to the issue that was brought forward by the New Zealand Law Society—I should say I think I made an error before saying it was the Law Commission but it was the New Zealand Law Society that brought this issue before the select committee. We do accept the argument by the New Zealand Law Society that in the absence of a positive act which would normally provide grounds for criminal liability the justification for making partners and spouses criminally liable is not apparent. Labour would support amendments to this bill for new provisions that are aligned with the advice from the New Zealand Law Society. So we hope that in the course of this debate we will have a debate around amendments that would actually deal with the issues brought forward by the Law Society because they are important issues.They are important because they not only set a precedent but also in the context of this bill deal with people who are down on their luck. Let us be quite frank about this. People who end up relying on welfare payments to keep them going are down on their luck. People who are committing corporate tax fraud cannot normally be described as being down on their luck. Normally they actually have got a lot of opportunity a lot of options in front of them and what they choose to do is to act fraudulently. There can be no excuse for that whatsoever yet the Government stands completely soft on that level of offending.There is a lot of discussion in this part of the bill about who spouses are and who they are not. There are a lot of discussions and definitions that actually help us to try to make decisions about whether they are captured by this bill which will become an Act or not. But the reality is that we do not have nearly the same amount of liability when it comes to other fraud measures and it is certainly the Labour Party’s view that if we are going to go down this track then we want to be consistent about it. We do not want the cherry-picking that this Government is so well-known for where it is favouring people with lots of resources and rolling out the good old beneficiary-bashing whenever it is in a spot of trouble.That certainly has been the habit of this Government. We have had in just the last week the Minister for Social Development deciding that she is going to release information that would give New Zealanders the impression that loads of beneficiaries are off sunning themselves at Club Med every week. That is another level of benefit fraud that is being committed I think is what she is trying to say. Was it not interesting—and a couple of the provincial newspapers have picked this up—that it was actually irresponsible of the Minister to release that information without divulging all of the information? For example of the people who are beneficiaries who have travelled overseas in the period since July we have no idea how many of them are still away—