Speech to the Child Poverty Action Group 2019 Summit

  • Hon Carmel Sepuloni
Social Development

 Fa’atalofa atu, malo e lelei, Kia ora koutou katoa

Thank you to the Child Poverty Action Group for asking me to be here today to provide an update on some of the things that have been happening across my the social development portfolio. 

Can I firstly acknowledge the vast experience and knowledge of your guest speakers today- many of whom were members of the Welfare Expert Advisory Group. It’s great to see you all.

It was just over two years ago that, with our Confidence and Supply Agreement partner the Green Party of Aotearoa, our Government set ourselves the task to ‘overhaul the welfare system’

I want to acknowledge the Green Party for this. Ensuring that this was a key part of our Confidence and Supply Agreement meant that we would collectively share the responsibility to deliver towards this lofty goal- because it does take all of us. I also want to acknowledge that across Government, including New Zealand First, we have broad support for the need for change within our welfare system.

As a government, we have a vision for a welfare system that ensures people have an adequate income and standard of living, are treated with respect, can live in dignity and are able to participate meaningfully in their communities.

We are committed to upskilling and training people on benefit so they can access sustainable work and we want everyone that is able, to be earning, learning, caring or volunteering. 

We want a welfare system that is fairer and more accessible for all New Zealanders and we want New Zealand to be the best place in the world to be a child. 

That’s why we invested in the Families Package in our first 100 days.

The Families Packaged included the Best Start payment for families with new babies; We introduced the winter  energy payment;

 We made significant enhancements to the family tax credit and the foster care allowance, orphans benefit and unsupported child benefit; and the  accommodation supplement;

We also reinstated the independent earners tax credit and increased paid parental leave to 26 weeks. 

I have seen the results of the first year of the Families Package and can tell you that the $5.5 billion investment is lifting the incomes of New Zealanders and their families that need it the most.

I will be making an announcement later this week about the impact of the Families Package in its first year.

You will have often heard me talk about culture change at Work and Income. We all know that treating people with dignity and respect and ensuring they are able to access their full and correct entitlements can have such an impact on people who come to Work and Income for support.

In an organization that employs over 7000 staff we are not perfect, but I am seeing some really positive changes and I’m pleased we are making progress in the right direction.

As part of the overhaul we established the Welfare Expert Advisory Group In May 2018 to provide advice to the Government on options that could best give effect to our vision for the future direction of the social welfare system.

In February this year we received their report titled ‘Whakamana Tangata’ and I want to once again acknowledge the passion, intellect and pragmatism that sat behind that report.  

At the time of launching the report in May I noted that we would be taking action in areas where we believed immediate changes need to be made these were:

addressing financial support with a focus on child wellbeing

supporting people who are able to be earning, learning, caring and volunteering

Improving access to affordable housing.

In terms of progress against the immediate priorities you’ll know well the changes we were able to commit to in the last budget, significantly for the first time in our history we will be indexing benefits to average wage increases. .

This is a very important change to the fundamental settings of our welfare system. It is a long-term and enduring change.

We were also able to lift abatement thresholds, repeal section 192, invest more into frontline staff to support people into employment, deliver more public housing and expand Housing First.

 As you may have already heard me say before there are around 20 WEAG recommendations where work is underway or they are being actively considered whilst the remainder will need to be phased in as part of the medium and longer term, work programme.

Overhauling the welfare system is a large, expensive, complicated task with many moving parts and was always going to take more than one term of government.

As I’m sure you will appreciate many of the proposed changes for the welfare overhaul have fiscal implications and are therefore Budget sensitive so I am limited in what I can say today.

But I can give you a guide to the government’s longer term intentions within the welfare space.

In the medium-term 2 – 4 years, we will be focused on:

Re-setting the foundations of the welfare system

Increasing income support and addressing debt

strengthening and expanding employment services

improving supports and services for disabled people, people with health conditions and disabilities and their carers 

enhancing the community sector

In the longer term, 4 to 5 years and beyond, we will be focused on:

Simplifying the income support system

Aligning the welfare system with other support systems and Reviewing housing and childcare supports

I would like to talk to you now about the importance of taking an all of government approach to the overhaul of the welfare system.  

This is something that’s highlighted in the WEAG report.

The report says - improving outcomes for people on low incomes or those in  the welfare system requires a cross-government response and cannot be  changed by  the welfare system alone.

What happens in other parts of the social sector influences who comes into the welfare system. For example we know that people on jobseekers who have not attained NCEA level 1 are estimated to have more than twice the future years on benefit than those with NCEA level 3 or higher.  

The WEAG report also says that a significant group of people and families experience multiple and long-term disadvantage and need to interact with several government systems.

This group requires a responsive, person-centred, joined up system of support if their outcomes are to improve.

I wholeheartedly agree.

And that’s why I would like to talk now about the issues that are having a huge impact for people and their families in the welfare system – housing and mental illness. .

Since being in government we have seen a rise in special needs grants and assistance being given out at MSD.

This shows that people are coming forward because they know they won’t be turned away.

That’s part of the culture change at the Ministry of Social Development to ensure that when people come in for help – that they get access to their full and legal entitlements in the welfare system.

But underpinning the drive for grants is the cost of housing.

. After years of underinvestment in our housing system and following the selloff of state houses – it has had a huge impact on New Zealanders but particularly those in the welfare system.

The highest demand for Special Needs grants are in places where there is a severe shortage of affordable housing like in Auckland and the Bay of Plenty.

MSD says housing need is the number one reason that people need assistance for other grants such as food.

In addition to the financial impacts of unaffordable housing, housing is a key determinant of a person’s ability to engage with the labour market, their security, financial and social resilience and their stress and mental wellbeing.

The government has provided more than 2300 public housing places since we came into office and we are on target to build 6400 over four years.

 But more needs to be done.

There are now over 1 million New Zealanders living in rental accommodation and 43% of these households contain children.

The renting system is outdated and it negatively impacts people in the welfare system and working people on low incomes the most.

That’s why yesterday Associate Minister of Housing (Public Housing) Kris Faafoi announced the government would limit rent increases to once every 12 months and ban the solicitation of rental bids by landlords.

This will improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement.

But most importantly the changes announced yesterday will ensure that there will be less regular rent increases. Renters will have the ability to make minor improvements and make their house a home for their families and children.

The bill to amend the Residential Tenancies Act 1986, will be introduced to Parliament in the first half of 2020.

In August, I announced along with Minister Faafoi $54 million in Government funding for initiatives which will support at-risk individuals and whānau to stay in their existing tenancies.

The Sustaining Tenancies programme ensures that tenants who may be at-risk of losing their tenancy receive practical support to help them get back on track.

We also invested in intensive case managers and social services to provide wrap around support for people with complex issues that are living in emergency accommodation.

Many of them face barriers to finding and keeping a home because of their criminal history, mental health, addictions or family violence.

We all know here in this room that the social and financial costs of homelessness are huge – from people not being able to work, kids not being able to attend school regularly and people becoming sick.

Over 50% of people on main benefits have some sort of disability or are caring for someone with a disability.

Mental illness is a huge factor for people on benefit.

I believe that we have only scratched the surface on how much mental illness impacts on New Zealand society but especially for those people in the welfare system.

I have seen health and welfare data from the MedCentral region.

The data shows us that many people on main benefits including the jobseekers benefit are accessing mental health medication or counselling for mental illness, yet they haven’t disclosed this information to MSD, through the provision of a Doctor’s certificate.

Moreover, the data shows that these people were working and accessing mental health medications and support before they fell out of work and came into the welfare system.

We can do so much more in this space to intervene early to ensure working people get the help they need to stay in work and also give people in the welfare system better support to get better and to return to work. 

That’s why the Government invested $1.9 billion in improving mental health services at the budget.

That includes a $455 million package for frontline services for 325,000 people who need mental health support before they experience major problems.

Trained mental health workers will be placed in doctors’ clinics, iwi health providers and other health services so that when people seek help it is easy to access and immediately available for those suffering mental health issues.

Just last week I released the government’s Disability Action Plan which has 25 work programs across government agencies that have an explicit focus on improving outcomes for disabled people, many of whom are in the welfare system.

Improving access to housing and employment for disabled New Zealanders is a huge focus.

       74% of working age disabled people who are not in paid employment, would like to work if a job was available.

I will be releasing the draft disability employment action plan for consultation before the end of the month.

So we are starting to build a picture on what needs to be done. It confirms that the government’s investments are in the right places.

But after years of underinvestment it will take time to fix.

Across all of Government—we have an absolute focus on child wellbeing and child poverty reduction. Our aspiration is that all children can reach their potential and that they’re supported to do so.

Finally, I want to close by saying that whilst it’s me standing here today as the Minister of Social Development this is actually a government program of change. To get to this place where we can look towards a phased longer term plan has really relied on cross Ministerial and Party agreement. We are committed to this work and we are looking to your necessary critique, advocacy and support to realize a fair, accessible and fit for purpose welfare system in Aotearoa NZ

Once again thank you for the time to speak today please enjoy the rest of the conference.