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People first – the social state of the nation

Hon Steve Maharey

29 January 2004 Speech Notes

People first - the social state of the nation

Address to the Takaro Rotary Club. Rotary House, Palmerston North.


Thank you for the invitation to talk with you about the state of our nation as we head into the year 2004.

Today I am also talking with financial planners from around our region. They are keen to talk about the national and local economic outlook for 2004.

I thought to prevent me from repeating myself I would talk to you about the social outlook for 2004. I want to do this not only to avoid repetition but also because in many ways it is more important to talk about social issues.

There is an often used saying that asks "What is the most important thing?" and answers "It is people, it is people, it is people".

Unfortunately all too often this piece of wisdom is not followed up in practice. However, we are starting to realize that in the 21st century it will be the capacity and capability of our people that will decide how successful we are as a nation.

In the 80s and 90s the importance of people was overlooked as we pursued a narrow economic reform agenda. The results were not good. Not only did the economy under perform but also the number of social problems grew to crisis proportions.

So in 1999 central to the incoming government's agenda was a commitment to address what was called the social deficit.

The State of the Nation

So what progress have we made? Previous governments would have struggled to answer this question because they did not gather the necessary information. Now we do.

Since the election we have produced two Social Reports. Maori and Pacific Island social development is the subject of a specific report. This year I hope to introduce something new - a publication that will identify what policies are intended to address specific social issues. I also intend to put before Cabinet draft legislation that will require government, any government, to regularly produce the kind of reports I am referring to here so that we never again get into a situation where the social well being of the nation is ignored or marginalized.

So what story does all this reporting tell?

Overall, the story is a positive one. During the last five years things have been improving in New Zealand. People are living longer, and our society is more prosperous and richer, we are all safer, the population is better educated, and there is a lot less unemployment. We are becoming more healthy, wealthy, and wise.

This "wheel' is used to show how the social state of the nation has changed across a range of different areas. Each "spoke' on the wheel represents a different indicator of progress. Movements away from the centre of the "wheel' show an improvement in the social state of the nation compared to 1996, while movements towards the centre of the "wheel' show deterioration.

A key point to note when interpreting a graph of this sort, is that it can only tell us whether indicators are improving or deteriorating - it cannot tell us which indicators are most important. However, the general picture is clear. We have made progress in most areas, but we are doing particularly well in health, knowledge and skills, paid work, our economic living standard, and safety.

The health of New Zealanders is improving: we see gains in independent life expectancy, suicide, and prevalence of smoking. There has been a marked reduction in suicide rates.

New Zealanders are increasingly better educated: There have been significant gains since 1996 in early childhood education, the educational attainment of the adult population, and the tertiary participation rate.

Unemployment is at record lows, and employment rates are high. Fewer people are sacrificing the balance between their home life and work by working very long hours while market incomes continue to rise.

Our civil and political rights record is also good. Although one blemish is the continuing fall in voter turnout. This is part of a long term international trend and New Zealand's voter turnout remains high by international standards. In the area of cultural identity we see an increasing amount of local content on television.

Our drinking water quality is high by international standards, reflecting the generally good state of our environment. New Zealand is also becoming a safer place to live - for example the road casualty rate has improved significantly over the last five years.

This generally positive picture tells us we are headed in the right direction - but we will not overcome a social deficit built up over decades in a few years.

In particular we need to make sure that everyone benefits from social and economic development.

Young people, and Maori, and Pacific people, are groups that we need to focus on. We know that it is today's young people who will form New Zealand's workforce when the "baby boomers' retire. Lifting outcomes for children and young people represents an investment in future outcomes for all New Zealanders.

There have been significant improvements in the situation of Maori and Pacific peoples over the last five years. Suicide rates have decreased, the tertiary education participation rate has increased, as has the educational attainment of the adult population. The unemployment rate, the employment rate, and the road casualty rate have also improved.

There is more to do. Gaps remain between Maori and Pacific outcomes, and the average for New Zealand as a whole. Maori have a lower life expectancy than non-Maori, and have a higher rate of dependent disability despite a younger age structure. Maori are less likely than non-Maori to leave school with a higher school qualification, and have lower adult literacy rates. Criminal victimisation, road casualties, and unemployment are bigger risks for Maori than non-Maori. The situation for Pacific people is, similar.

While I am talking about Maori let me touch on comments made by National Party Leader Don Brash earlier this week. Dr Brash argued against spending money on Maori and suggested that social services are being allocated on the basis of ethnicity rather than need.

The government has decided to invest in policies that will improve outcomes for Maori and we are going to continue to do so. Maori are a very young population. They are a growing proportion of the population of New Zealand. If we do not invest in areas such as health, education and employment the future will not be good for Maori or New Zealand. It is an investment in the future of the country to make sure Maori are healthy, employed and educated.

We will also continue to deliver services in ways that are suited to Maori. While we are all New Zealanders we are not all the same. This is why we regionalise services and tailor them to fit the needs of women, young people, Pacific Island peoples, older New Zealanders and so on. We like to see communities delivering services in ways that suit their needs and have no intention of changing the policy.

Unlike Dr Brash we do not believe that one size fits all. It is not separatism to deliver services in different ways - it is simply a response to a diverse society.

Perhaps if Dr Brash were more in touch with Maori he would realise that an enormous amount of positive change is taking place. What is needed is a debate about how to increase the momentum instead of misguided statements about so-called race-based policy.

Returning to the overall picture - it is a positive one, but there is work to be done.

I want, therefore, to turn my attention to the kinds of policies being put in place to improve the social state of our nation. Given the amount of time I have I will look at four key areas. I should note that a good deal of what might be achieved after the Budget this year is of course dependant on funding.

Lifelong Education

Lifelong education is the key to a better future of all New Zealanders. By investing in skills, we help people achieve their potential, raise their capacity to add value to the economy, take charge of their lives and make a contribution to their families and communities.

There are six key policy areas.

- Universal access to Early Childhood Education: over the past four years we have seen a steady increase in the proportion of children in ECE. Since 2001 there has been a more than 4% increase in enrolments. Approximately 94% of all children now participate in ECE before going to school.

- Basic skills in literacy and numeracy are essential to be able to participate in modern New Zealand. The 1996 International Adult Literacy Survey showed high rates of literacy barriers (for example 46% may have difficulty reading a label for a prescription medicine). Over the past four years we have invested significantly in literacy and numeracy programmes. In the 2002 budget we made provision for the development of 90 new projects that would provide for 2000 plus learners per year in 2002 and 2003.

- High achievement for all young people within the school system: the aim of assessment these days is to find out what each young person is capable of doing. The National Certificate in Educational Achievement is designed to move us away from simply ranking young people to a form of assessment that tells us exactly what they can do and how well.

- Investment in training has been a priority for this government. In the past three years investment has increased from $65 million to $99 million. During 2002, more than 106,000 people participated in industry training compared with the 95,000 in 2001. More than 24,500 employers provided industry training to their employees and industry contributed over $38m in cash towards the cost of this training. These are impressive results. The government has set a goal of getting 150,000 workers participating in industry training in 2005. Within these numbers, our Modern Apprenticeships are a key success. Numbers have grown rapidly over the last year so that by September 2003 there were 6,073 Modern Apprenticeships in place. They are so successful we are running to keep up with demand. Our increased investment of a further $15 million over the next four years will increase the number of modern apprentices to 7,500 by June 2006.

- While the aim is still to encourage greater participation in tertiary education, we are also aiming to lift quality ensure programmes are relevant to the needs of New Zealanders and keep costs as low as possible.

- Better educational outcomes for Maori and Pacific Island people are crucial. Exciting things are happening with participation rates rising steadily. The proportion of Maori and Pacific people with tertiary qualifications has increased markedly since the mid 1990s. This has partly been driven by big increases in more Maori and Pacific people enrolling in tertiary education. For example, participation by Maori in tertiary education increased from slightly more than 10% in 1999 to over 16% last year.

Paid Work

Full employment was the cornerstone of New Zealand's success in the last century but many people gave up ever getting a job as unemployment rose through the 70s, 80s and 90s.

This government has made a return to full employment a priority and the record over the past four years has been good:

- since September 1999 approximately 190,000 jobs have been added to the economy. The number of jobs has increased by 11%

- employment growth has been spread across most regions of the country. For example, employment in Auckland has grown by 11.5%, but it has also increased in areas such as Nelson/Malborough West Coast (9%), Waikato (16%), Manawatu/Wanganui (25%), and Taranaki (10%)

- the unemployment rate has fallen from 6.8% to 4.4%. . If you compare September 1999 to September 2003 there are now roughly 40,000 less people unemployed.

To maintain this momentum we aim to achieve three goals: create more demand for labour, increase people's access to jobs, and provide better rewards for employment.

- Demand for labour

Increasing the demand for labour is the focus of our wide ranging national and regional economic development policies. There is now more assistance than ever before for new businesses. We are also requiring government departments to develop closer partnerships with industry and employers - and this is giving more employers the confidence to expand and take on new staff.

- Access to employment

The increasing demand for labour has seen many people get a job. However, matching people to jobs requires a range of active labour market policies. We have regionalised Work and Income, improved access to training, supported communities to develop small business, invested in child-care, stimulated growth and jobs in the regions and used a wide range of schemes to bridge people into work.

The Jobs Jolt package of initiatives will improve the matching of job seekers to employment vacancies. On of the initiatives which make up the package, Job Partnerships with Industry, is a nationally coordinated approach that will address genuine skill and labour shortages by developing, in conjunction with industry, targeted training for job seekers. It will also provide new services to people finding it difficult to get a job. Through another initiative, Mobile Employment Services, we are increasing face-to-face employment services in isolated rural areas.

It would be good to think that people got jobs because they had the skills. Unfortunately some people miss out because of discrimination. To respond to this reality we are assisting new migrants, young people, mature unemployed, women and people with disabilities to find employment.

- Rewarding employment

Paid work should allow people to live independently on what they earn. For this to be assured we have found it necessary to lift the minimum wage and change labour laws to encourage fair bargaining.

Since 1999 the government has also raised minimum wages. The adult minimum wage has been increased from $7 per hour to $8.50, and the youth minimum wage increased from $4.20 to $6.80 per hour.

These policies have not reduced employment opportunities and unemployment has continued to go down.

Moreover, real wages in New Zealand have risen. On average, real weekly wages have increased by 3.3% since 1999. That means that real average wages have increased by about $25 per week.

Changes in the Welfare State

In a dynamic changing society like ours the social security system has to offer people a genuine sense of security. Key to this is the benefit system. During the 1990s benefits were reduced to the point that no one could live on them. Over the past four years the aim has been to increase incomes when we can and to ensure people get their full entitlement.

We have ensured that individuals get their full and correct entitlement to benefits.

We have improved abatement arrangements and are making work pay. Many people on benefits are now better off if they find a job.

In the coming Budget the Minister of Finance has made it clear that he intends to fund policies that will allow for an increase in the incomes of beneficiaries and other low income households, lower the cost of accommodation and make the shift into work pay. The aim will also be to begin the process of simplifying the very complex benefit system that acts as a disincentive to take a job.

In the 21st century, the benefit system should provide security for those who need it and lead to work opportunities for those who can take them. The purpose of any assistance should be to encourage as many people as possible to get on with their lives. These policies, under the name of Future Directions, represent the biggest change in the benefit system seen in many decades.

It has also been our aim to guarantee the incomes of older New Zealanders. The superannuation rate for a couple at age sixty-five will not be allowed to fall below 65% of the average wage. The new superannuation fund will allow the country to afford to support the baby boom generation in retirement without increasing taxes or raising the age of entitlement.

Perhaps the issue that causes most insecurity is health care. Our aim has been to rebuild a strong public health system and extend low cost care throughout the community.

The government's investment in health has increased in real terms by $1.74 billion since 1999.

At last count we had 59 new Public Health Organisations (PHOs), covering 2.5 million people. Moreover, access to low cost or free primary healthcare is getting to those individuals and communities that need it. Approximately 56% of Maori and 92% of Pacific people are enrolled in PHOs, and this will hopefully go someway to reducing the disparity in health outcomes for these populations.

Strong Communities

One of the major changes in social policy in recent years has been the shift away from state provision to the community. This is a positive change that acknowledges the limits of the state. The aim should always be for people, families and communities to run their own lives.

This has led to a strong emphasis on support for families in terms of parenting, increased income, parental leave and better holiday entitlements.

We have decided to set up a Family Service to improve services to families, in particular those with children. The service will be up and running by 1 July 2004, and will be run out of the Ministry of Social Development. Part of its work will be to better co-ordinate and align existing support services for families, for example by working with government funders of family support services, local government and community and voluntary organisations.

I expect the new Service to improve support for families by setting clearer directions and achieving better co-ordination across government and non-government services. I am also interested in steps it might take to improve families' access to the information and services they need, so they can take action themselves to sort out their problems.

Communities are being encouraged to take control of resources and define how they should be used. Most prominent here is the capacity building programme that sees Maori take over the delivery of social services.

In the health sector, Maori provider and workforce development is an important mechanism to enable Maori to have greater participation in the health and disability sector. There are now a wide range of Maori providers, largely in the primary and community sector. For example, one Maori community trust operates a small rural hospital alongside its community services, and another operates inpatient mental health services. A number of Maori providers have joined or are working actively with PHOs. The number of Maori providers has grown from 25 in 1992 to 233 in 2003.

Community controlled delivery of social programmes is also important in other areas such as education, employment and housing.

We have a wide-ranging programme of work to not only fund community providers, but to simply the contracting process where there are multiple agencies involved.

The renewed focus on social housing and income related rents has arisen from the social problems caused when people are inadequately housed.

This year we are going to spend about $337 million on Income Related Rents in order to make state housing affordable for low-income families.

We are also building new state houses. The total number of "managed state houses" has increased by 3,800 since December 1999. Approximately 2,500 further additions are planned over the next 3 years.

Support for volunteering acknowledges that a strong community must have people who are prepared to assist each other if it is to function properly.

Since the International Year of Volunteers in 2001, the government has increased its focus on recognising and supporting the vital role that volunteers play in building strong and active communities. For instance, we now make an annual funding contribution to the work of volunteer centres across the country, to help them broker volunteering opportunities and provide training in volunteer management.

Also, we have ensured that work-tested beneficiaries who undertake voluntary work can have this recognised in their job seeker agreements. And our Work and Income offices are able to offer their clients opportunities for unpaid work experience in community projects through the Activity in the Community programme.

In September 2003 we launched a new Office for the Community and Voluntary Sector, which helps government agencies strengthen their relationships with the community and voluntary sector. This work includes a focus on removing any barriers to volunteering in government policies and practices and finding opportunities to enhance volunteering opportunities - in keeping with the 2002 Government Policy on Volunteering.

The partnership government has forged with local government has helped encourage local leadership and a sense of responsibility at the community level for social well being.

We have an active partnership with the Mayors Taskforce for Jobs. We are collectively working towards the goal of ensuring that young people are in either education or employment. In many instances this local partnership means that many young people are able to access training, employment, apprenticeships and advice that they could not get before.

We are also bringing government back to the regions. We now have 27 Heartland Service centres, and a further 13 Outreach Services. In places like Kaitaia, Dargaville and Twizel the local community can directly access the services of up to 17 different agencies which was simply not possible in the past.

Where to from Here

Over the past four years significant progress has been made toward restoring a sense of social justice. New Zealanders have supported this shift. They have made it clear they want to live in a country where people's basic needs are met, where opportunity is available to everyone and unjustified inequalities are eliminated.

Equally important has been the realisation that without social development there can be no real economic development.

Our future depends on the capacity and capability of people. We need to extend economic opportunity to everyone. We need strong social institutions, strong families, strong communities which enable people to thrive in a demanding environment. We have to invest in people as a top priority so they feel secure and able to face the challenges arising from constant change.

Our guide should be that communities do not become strong because they are rich, they become rich because they are strong.


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