Covid excuse used to raise benefits but ACT reduction policy is nuts

Newshub: ACT’s Brooke van Velden calls for beneficiaries, public service workers to take pay cut

The ACT Party’s deputy leader is calling for public sector workers and beneficiaries to take a pay cut in order to help lower debt levels.

Brooke van Velden was laying out the party’s ‘Alternative Budget’ in an appearance on Newshub Nation on Saturday, and says ACT’s approach will help New Zealand recover from the economic fallout of COVID-19.

The party’s policy includes abolishing the winter energy payment, scrapping KiwiSaver subsidies and putting interest back on all student loans.

Van Velden says lowering New Zealand’s debt post-COVID-19 is important because it’s unknown when another event will happen that requires a large sum of money.

“There are two ways we can go about this recovery: we can have a debt recovery or we can have a growth recovery.”

ACT proposes public service employees should have their “over-inflated wages” cut by 20 percent, and benefits would be lowered back to pre-COVID levels.

Van Velden and Seymour may well be right. The Government has implemented a number of policies by stealth under cover of $50 billion Covid financial package.

The Government has previously defended it’s COVID-19 spending, with Finance Minister Grant Robertson saying it’s “fiscally and socially responsible” to have money set aside in the event of a second wave.

“We are sticking to our word on this. We are investing money where it is needed to respond to COVID-19, and we are setting aside a significant sum of money to be used as needed in the future,” he said in July.

There is no doubt majoe financial support was needed to try to minimise the adverse financial effects of Covid, but I think there are valid questions about a lot of the spending. Some of the spending announcements seem to have been opportunist policy financing of things that weren’t being addressed by the Government before the pandemic.

But Bagrie is probably also correct. Many beneficiaries have struggled for a long time on subsistence incomes. This has had significant adverse effects on the welbeing of families and children, and also on health, crime and education.

And substantially reducing benefits and wages now would be a huge risk given our precarious economic situation. I think that would be nuts.

It’s going to be a huge challenge for the next term Government to deal with the big increase in spending and debt, but slashing benefits and wages would be nuts in my opinion.

National’s Upston criticised for ‘soft on benefit sanctions’ claim

Kay Brereton from the Beneficiary Advocacy Federation has hit back against National’s Social Development spokesperson  saying “the Government going soft on benefit sanctions, saying it was sad when parties seek to punish people with ‘inadequate incomes’.

Social Development Minister Carmel Sepuloni: ““MSD has made significant shifts in its service delivery over the last year to improve its service culture and ensure that people are getting the support they are entitled to and that they are not unfairly sanctioned”

Louise Upston (National): “The number of people claiming the job seeker benefit has increased by 11,000 because the Government is going soft on benefit sanctions and those who don’t want to work”.

Ensuring people get benefits and assistance they are entitled to has been an issue for some time. There has also been obvious philosophical differences between National and other parties over whether benefits shouldn’t be difficult to get, that they should be more of a choice for those who feel they need assistance. National opposes benefits being a sort of lifestyle choice.

Carmel Sepuloni:  Benefit rates remain low

The total proportion of working age people on a main benefit is 9.9% compared to 9.8% in the December quarter last year.

Rates on main benefit are different from the official unemployment rate, which was last recorded at 3.9 percent, down from 4.7 percent at the same time the previous year.

“The latest benefit figures show that more people who are applying for hardship assistance are getting it. The need has been there for years but under this Government people know where to go when they need support.

“This has seen a rise in the level of hardship assistance being given, particularly food grants and emergency housing grants.

“MSD has made significant shifts in its service delivery over the last year to improve its service culture and ensure that people are getting the support they are entitled to and that they are not unfairly sanctioned, driving them and their families into further poverty.”

Louise Upston (National MP):  Benefits up as Govt makes it easier to do nothing

The number of people claiming the job seeker benefit has increased by 11,000 because the Government is going soft on benefit sanctions and those who don’t want to work, National’s Social Development spokesperson Louise Upston says.

“Over the past year there has been a 42 per cent decline in the number of people who have been sanctioned for failing to meet the basic criteria which goes with receiving taxpayer’s money. That includes simply turning up to appointments.

“Given that unemployment has decreased, it’s inexplicable that the number of people on a jobseeker benefit would increase so rapidly and that the Government would make it easier for people to avoid work.

“The Minister needs to explain why so many more people are lining up for benefit, while at the same time there aren’t enough people to plant Shane Jones’ ‘billion’ trees or to pick fruit from our orchards.

“For the past ten years the total number of people on benefit has been decreasing because the National Government was focused on creating jobs and getting people into work, and making sure people met their obligations.

“Now for the first time in a decade with unemployment at record lows the number of people on benefits has increased rapidly – by more than 9000.

“It’s especially disappointing to see that the number of 18-24 year-olds receiving a benefit has increased by 10 per cent. It’s this age group which needs the most encouraging to get into work to avoid a lifetime of benefit dependency.

“National is aspirational for all New Zealanders. We believe that people deserve a fair go, but not a free ride. Employment is the best way to lift families out of poverty.”

National have a hard line ‘tough but fair’ approach that is quite different to the softer ‘more compassionate’ approach of the current Government.

About 134,000 people are receiving jobseeker support, an 8.3 percent jump from last year.

About 8500 sanctions were applied in the December 2018 quarter, a decrease of more than 6000 compared to the previous year.

1 News: Advocate hits back over National’s call for more benefit sanctions

Kay Brereton from the Beneficiary Advocacy Federation says it is sad when political parties seek to punish a certain percentage of people with inadequate income.

the easing of disciplinary action is being applauded by Kay Brereton from the Beneficiary Advocacy Federation.

Ms Brereton said she knew of people who had been docked for not attending an appointment, because they were at their part-time job.

The increase in people on the jobseeker benefit might be because more people were now being deemed eligible, she said.

She said it was sad political parties thought a certain percentage of those with inadequate income should be punished.

Some see limits to what assistance can be obtained, and inadequate assistance (not enough money), as punishment. Greens have gone as far as advocated for a virtual no questions asked approach to giving out benefits and grants.

National’s ‘firm, fair’ approach is seen by some as unfair and even draconian, but al they can do from Opposition is complain about the easing up on sanctions against people who appear (to some) to choose a benefit over work.

There has to be a balance between providing state care, assistance and money but encouraging people to be responsible for their own financial situations and earning money for themselves. There continues to be a significant difference between National’s tougher approach and the current Government’s more lenient leanings.

Time to review our welfare system?

It is very difficult in practice to operate an affordable welfare system that helps those in genuine need adequately without being demeaning, but discourages abuse and free loaders who want a funded lifestyle, and is fair to those who work and pay taxes.

There are obvious problems with our current system, some highlighted by Metiria Turei. Can it be ‘fixed’ with a few tweaks? Or is a major revamp needed?

Budget adviser Michael Barnett at Stuff:  Punitive welfare system is failing those in need

The welfare reforms of the 1930s and 1940s helped to establish the kind of society where the benefits of economic growth were more equitably distributed. However, subsequent welfare measures have been introduced ad hoc and today we have a mish-mash of policy that is inefficient in its delivery and favours some sectors of society at the expense of others.

There is a drastic need to review and reform how welfare is delivered in the 21st century. It is time to acknowledge the loss of traditional manufacturing jobs overseas, the expansion of a low-wage economy and a growing reliance on the unpaid voluntary sector to provide essential social services.

The time is ripe for the provision of a social dividend through the introduction of a Universal Basic Income for all in society. This would lead to a simplification in the delivery of welfare and recognise the contribution of all, both potential and real, toward a fair and equitable society.

Simplification would help, but getting the balance right would be challenging.

A major problem with a Universal Basic Income is the level it would have to be at to provide adequately for those in real need, but that doesn’t encourage non-productive lifestyles as a choice, and doesn’t bankrupt the country.

A welfare system needs to be ‘fair and equitable’ to those in genuine need, but it also needs to be fair and equitable to those who work and pay taxes.


Turei versus Tolley on benefit fraud

Metiria Turei continues to attract much of the media attention on her stand on benefit fraud.

Stuff:  Greens co-leader Metiria Turei won’t report woman committing benefit fraud

On Tuesday Turei confirmed she had met with a woman while travelling in the South Island last week who told her about a flatmate with a baby “who is doing exactly what I did”.

“She’s trying very hard to be the best Mum she can be but she isn’t telling WINZ about all her flatmates and I won’t condemn her.”

Turei was completely against the idea of dobbing her in to the authorities and said her job now was to “make sure nobody needs to make those choices”.

“I’ve had people come and disclose to me their circumstances and I’ll never abuse that trust.

What I will do is fix the system so they never have to lie again.”

I think that an MP is obliged to keep conversations with constituents confidential. What is different here is Turei choosing to talk about something like this publicly, using constituent confessions to promote her agenda.

But Social Development Minister Anne Tolley said members of parliament had “certain obligations” and while there’s laws people don’t agree with it doesn’t mean people “shouldn’t abide by those laws”.

“My advice to anyone struggling is to go and talk to their case manager, because sometimes there’s stuff that can be done, so that’s the advice I hope Metiria, or any member of parliament, is giving to someone who is really struggling,” she said.

There’s no doubt that Turei means well, but she is on potentially shaky ground if she approves of instances of benefit fraud.

Turei has proposed WINZ operate an “amnesty” for people who have broken the law so they can approach a case manager and not be judged.

An amnesty for any law breaking no matter how serious? Writing off all past instances of fraud? This is tricky territory, especially for an MP.

In Question Time in Parliament today:

9. METIRIA TUREI (Co-Leader—Green) to the Minister for Social Development: Does she believe that the Ministry of Social Development has a responsibility to treat unemployed people, sole parents, and people with disabilities with respect and dignity, and ensure every person on a benefit has all the support they are entitled to?

Hon ANNE TOLLEY (Minister for Social Development): I believe that the ministry should treat everyone with respect and dignity, regardless of whether they are on a benefit or not.

Metiria Turei: Does she think that her ministry lives up to this standard, given the hundreds of examples made public this week describing denigrating and obstructive responses by Work and Income deliberately denying people their entitlements?

Hon ANNE TOLLEY: I have travelled all over New Zealand and have been into Work and Income offices and talked with staff. I have never met anyone yet who is not absolutely passionate about helping people get back on their feet, get into work, and live successful lives.

Metiria Turei: Given that a recent study into grandparents seeking financial support has found that “the service standards published by Work and Income are continually breached, not displayed in offices and are not subject to a complaints procedure, …” will she commit to changing the punitive culture in Work and Income so that it focuses on giving people the help when they need it?

Hon ANNE TOLLEY: The benefit that the member is referring to is the unsupported orphans benefit. I think that is the name of it. There are procedures that do take a long time to process—determining whether or not a child is in the full care of a grandparent. I have met with Grandparents Raising Grandchildren on a number of occasions. What I can say to the member is that this issue in particular is being addressed through the Ministry for Vulnerable Children, Oranga Tamariki, which focuses on the needs of the child and, therefore, will enable much better support, I believe, to be wrapped around any people who are taking care of those children and in particular, grandparents.

Sarah Dowie: What recent actions has the Ministry of Social Development (MSD) taken to ensure people do receive the support they are entitled to?

Hon ANNE TOLLEY: We have been working our way through a number of issues to ensure that the practice aligns with the legislation and that people do receive their full entitlements. For example, one issue that was identified was a coding error that meant some clients were being paid the accommodation supplement at the wrong rate. When this was discovered, MSD took the appropriate action to reimburse 22,000 current clients at around $14 million and undertook to identify previous clients who may have been underpaid. MSD is absolutely committed to ensuring that people get the support that they are entitled to.

Metiria Turei: When Work and Income tells 85 percent of grandparents who are caring for their grandchildren that they are not entitled to benefits that they should in fact be receiving, will she instruct Work and Income to review every case to ensure every single person on a benefit is receiving their full entitlement?

Hon ANNE TOLLEY: I am not aware of where that figure comes from. If it comes from a survey that was done recently, then I would question the assertion that that relates to all grandparents. As I have said, there is a process by which Work and Income has to be satisfied that the grandparent now has the full care of and responsibility for the child, and that does cause, from time to time, some lengthy delays. As I say, this has been raised with me on a number of occasions by the organisation representing those grandparents, and we are addressing it as best as we are able to.

Metiria Turei: When so many stories of people being driven into poverty and despair by the broken welfare system have emerged in this last week, will she instruct the MSD to hold an amnesty for every current beneficiary—

Hon Gerry Brownlee: Oh! Now we get to it.

Metiria Turei: —for every current beneficiary, so not me, Minister—so that they can talk to Work and Income about—

Mr SPEAKER: Order! Would the member complete her question. It is a very long question.

Metiria Turei:—so that they can talk to Work and Income about their full entitlement without risking investigation or financial punishment?

Hon ANNE TOLLEY: First of all, I reject the assumption that the social welfare system that this country so proudly has is broken. In fact, on the contrary, I would say the results—that people are working very hard throughout New Zealand—have shown a record number of people coming off reliance on a benefit and into work. Sixty thousand children in New Zealand now no longer live in houses dependant on a benefit, and I think that is a huge success for this country and a huge success for the people who are now living totally independent lives, able to support themselves and their families.

Metiria Turei: Why will the Minister not hold an amnesty for current beneficiaries when she cannot guarantee that every parent on a benefit has enough money to feed their kids and pay their power bills this winter without having to ask for extra assistance?

Hon ANNE TOLLEY: I think the member forgets that this Government was the first Government in over 40 years to raise the amount of money paid to beneficiaries—the first Government in 40 years. There is no doubt that it is difficult to manage on a benefit, but that is why the staff at Work and Income work so hard with families to help them into sustainable employment, because the best way out of poverty is to be self-reliant, to be independent, and to be able to be working in New Zealand supporting their own families.

Metiria Turei: How many beneficiaries are currently homeless?

Hon ANNE TOLLEY: I suggest the member puts that down in a written question.

Metiria Turei: Given the Minister does not know how many current beneficiaries are homeless, how can she agree with the use of financial sanctions to threaten the poorest people in New Zealand with worsened poverty?

Hon ANNE TOLLEY: Sanctions are only ever applied after several warnings, and are only applied when people do not comply with their obligations. Some of those obligations are very simple—turning up for an appointment. If there is a good reason, the sanction is not applied. It is very easy for people to re-comply, but there has to be some accountability when you are abusing spending taxpayers’ money.

Metiria Turei: Why does the Minister believe that it is OK for the Government to use poverty as a weapon against solo mums and their children, disabled people, and homeless people who have already lost everything?

Hon ANNE TOLLEY: I completely refute the assertions of that member.

Metiria Turei: How many people on a benefit have committed suicide in the last 5 years?

Hon ANNE TOLLEY: I do not believe that the MSD has ever collected those sorts of statistics.

Turei is on a roll. She also had this oped published: Children shouldn’t be punished for their parents’ choices

I also revealed that as a single mother and law student in the 1990s, I lied to Work and Income about how many flatmates I had.

Since then, I’ve been overwhelmed by the number of people who’ve revealed on social media, and who’ve told me in person, that my story was theirs too, or their mother’s, or someone else they know. It’s been unexpected, and very powerful.

Section 70A requires single parents to name the father of their child, or risk losing their benefit.

This particular sanction is currently being handed down to 14,000 single parents, almost all of whom are mums. They are having up to $28 per week per child taken off them. The victims of this punitive and nasty law are the more than 17,000 kids who are then being deprived of that money – money that could be spent on food, or school books, or for paying the power bill so they can keep the heater on in their bedroom this winter.

Why anyone believes that children should be punished for their parents’ choices is beyond me. And why is taking money from a mother and her kids the only option if the state wants to track down the father? The Government is essentially holding kids’ welfare to ransom.

I have no doubt that some women, mostly women, are put in very difficult situations. Cutting benefits for non-compliance is tough on some.

But a much higher benefit with a no questions, no responsibility approach is fraught with unintended and predictable consequences.

A comfortable house and a comfortable income for everyone is a great ideal, but if it results in too many people choosing not to work because there’s no need then our society could end up in a serious situation.

Election – the money or the bag?

Is the election going to be as simple a few bucks in the hand versus a lot of other people getting more?

Toby Morris portrays it as a simple choice in The money or the bag?

As the parties reveal their priorities for September’s election, voters are starting to see the choices they’re facing.

Labour has released its alternative budget, which would put $17 billion more towards health, education and family incomes over four years.

And the Green Party pledged to raise core benefits and the minimum wage.

Meanwhile, National set out tax cuts in the Budget in May – though it also boosted Working for Families and the accommodation supplement, and put some extra funding towards health, including mental health, and education. Labour would scrap the tax cuts to pay for its programme.


I don’t know that voters will see it as simple as that sort of a choice.

Benefit numbers continue decline

Stuff reports that Beneficiary numbers fall again: Government – quoting a media release from Social Development Minister Anne Tolley.

They also quote Labour’s Carmel Sepuloni claiming “no evidence” there are “more people in sufficient paid employment”, and “you see increasing numbers of people who are out on the street begging” – but she provides no evidence.

Tolley’s media release:


Social Development Minister Anne Tolley welcomes today’s release of benefit figures which show year-on-year benefit numbers continue to track downwards.

Key numbers:

  • 309,145 people on benefit at the end of the December 2014 quarter
  • 12,700 fewer people than last year
  • The lowest December quarter since 2008 and the third consecutive quarter (June, September, December) with such record lows
  • Numbers on the Jobseeker Support benefit have decreased by over 5,500 since last year and have been consistently declining since 2010, even as the overall working age population has increased.
  • 5,300 fewer people on the Sole Parent Support benefit compared to last year, a drop of 6.8 per cent

Tolley concludes:

“This Government’s welfare reforms are continuing to support New Zealanders into work. The reductions we’re now seeing will mean fewer people on benefit in the years to come which means we’re going to see healthier, more prosperous households.” Mrs Tolley says.

The Government sees getting people off benefits and into paid work as one of the best ways of reducing poverty.

Percentage of working age population on main benefits:

  • December 2009 – 13.0%
  • December 2013 – 11.8%
  • December 2014 – 11.2%

One of the most significant reasons for children in hardship/poverty is sole parents on benefits.

A lack of jobs is an obvious issue, but the job market is growing. Low wage levels for many is also an issue.

There is also a lack of suitable job skills and qualifications amongst the unemployed and sole parents, they tend to be under-educated and unskilled.

There are a number of Government initiated programmes aimed at improving employable skills but it is challenging motivating, educating and upskilling those remaining on benefits.

Ministry of Social Development source: Quarterly benefit factsheets available now

Welfare Reform

On 15 July 2013, the Welfare Reform changes came into place. New Zealand’s welfare system has changed to one that better recognises and supports people’s work potential. It focuses on what people can do to achieve a better future for themselves and their families. Three new benefits replace most of the previous benefits: Jobseeker Support, Sole Parent Support and Supported Living Payment.

All main benefits – December 2014

Five year trends:

Main benefit numbers in December 2014 were lower than in December 2009. Changes in benefit numbers over this period largely reflect changes in economic conditions.

The proportion of the working-age population who were receiving a main benefit at the end of December increased between 2009 and 2010, but has decreased over the last four years. The main driver for this pattern has been changes in economic conditions.

Jobseeker Support (JS), Sole Parent Support (SPS), Supported Living Payment (SLP)

Other includes Emergency Maintenance Allowance (EMA), Emergency Benefit (EB), Jobseeker Student Hardship (JSSH) , Widow’s Benefit Overseas (WBO) and YP/YPP.

Hand-ups versus hand-outs

There is a lot of debate about whether social welfare should be no questions asked right to state funded support, or if it should be seen for most people as temporary assistance during hard times until you can become self-reliant again.

Extreme sides of the arguments range from wanting no state welfare to insisting that anyone who wants a comfortable living income and guaranteed quality housing for life should be free to choose state support.

Today’s ODT editorial looks at the hand-up versus handout arguments in the US and here, I have edited out the US references.

Here in New Zealand, our Government has been actively working to reduce the number of people on benefits, encouraging them to find work – even if critics say there are no jobs available.Social Development Minister Paula Bennett says there are 29,000 fewer New Zealanders receiving benefits since the last quarter, the lowest number at this time of the year since 2009. She ”takes her hat off” to the more than 17,600 people who went off the unemployment, domestic purposes and sickness benefits and into work in the last quarter.

And the Ministry of Social Development cancelled 525 benefits in the last quarter after it implemented an improved information sharing arrangement with Inland Revenue. According to Associate Social Development Minister Chester Borrows, those who had their benefits cancelled are part of a larger group of 3500 people apparently working and earning above the threshold for welfare support, and the ministry is in the process of contacting them.

With expanded information sharing possible now, major savings are being achieved. Those 525 people were receiving benefits costing $5.6 million a year. That is money they were not entitled to, and Mr Borrows is glad it has been stopped. Confirmed cases are now being processed by the ministry to establish how much money has been overpaid so it can take action to recover it.

Even so, there are still 310,146 people on benefits, including 92,550 sole parents on the domestic purposes benefit, 58,208 on sickness benefits and 48,756 on unemployment benefits. And social welfare remains the largest expenditure item on the Government’s balance sheet.

And the country cannot afford an open cheque book for welfare.

In the next three months, Work and Income staff will be trained on new welfare reforms. New Zealanders have a ”fair go” attitude and the reduction of benefit fraud will be welcome in many quarters. The loudest complaints are coming from New Zealand liberal groups saying beneficiaries will become ”cannon fodder” for politicians.

New Zealand has grasped the seriousness of a growing welfare class, and is mostly composed about changes being made to encourage a hand-up, not a hand-out.

There are some who jump on any attempt at encouraging and helping people off welfare as bennie bashing.

And there are some who want no welfare (and the same people tend to push for low or no tax).

But most will be comfortable with the concept of a reasonable level of state assistance, as long as those who are  able see it as temporary help until they can find a way to support themselves and their families.

Long term or permanent state support is essential for some people, but it should not be a choice for those who expect others to support a life style provided by those who pay taxes.

Greens have all the answers…

…except when you ask them questions?

Julie Anne Genter has a lot of answers when it comes to transport issues, but she tweeted on something outside her speciality yesterday:

perfect tory logic @chipmatthews cut benefits, drive people to more desperate measures –> more people for the prisons!

I asked:

Serious question Julie, how do you persuade more people to give their kids more healthcare and education? Benefit top-up?

She replied:

We as a society all stand to benefit from kids having the essentials. More focus on what works, not just punishing the poor.

I asked for details:

I agree, but how do you encourage the poor to do more for their kids? Agree sticks are a problem. What carrot would work?

No more tweets from Julie. Her battery must have run out. Or something.

All I’ve heard so far from Greens is they want to give poor people more money. As has been said elsewhere, it’s a lot more complicated than that.

Julie said “More focus on what works”. Yes, I agree, but what will work?

‘No dole for people on the run’

Paula Bennette has just announced Benefits stopped for those with arrest warrants.  This is based on National’s election policy.

This is how it was described in National’s election material – Read our Election policy on Welfare obligations.

3. No dole for people on the run from Police

If someone is on the run from the Police, with a warrant out for their arrest, we will stop their benefit.

Taxpayers should not be paying people wanted by the Police to evade the law. Once the outstanding arrest warrant has been
cleared, benefit payments will resume, with no back pay.

This collaborative approach between Police and Work and Income will free up significant Police time and resources.

How it will work

Once a person suspected of committing a criminal offence has failed to appear before
Police, an arrest warrant might be issued.

If Police fail to locate a person subject to an arrest warrant, the Police could request Work and Income to start proceedings to
suspend the person’s benefit.

Work and Income will then write to the person, letting them know they have a week to deal with the outstanding warrant.

The person will have one week to come into Work and Income and show they have dealt with the warrant. If there is no contact from the person, Work and Income will suspend the person’s benefit.

Beneficiaries with children will receive 50 per cent of their benefit until they supply evidence to show they have dealt with the
outstanding warrant for their arrest.