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Heather Roy's Diary: Benefit Fraud Debt

Heather Roy's Diary

There are few things more Kiwi than looking after our mates. That's why New Zealanders overseas inevitably find other Kiwis to flat, work and play with. We have stood by each other from the battlefield to the rugby field, and when the going gets tough, few of us would turn down a friend's appeal for help.

That Kiwi spirit underlies our welfare system. We don't mind helping people when they need it, giving them a hand up, back into independence. Showing compassion for other people isn't just something we see as a duty, it's part of our culture.

But Kiwis hate being ripped off. We despise people taking advantage of our generosity. Maybe that's why New Zealand has no equivalent of Ned Kelly - we condemn thieves and fraudsters, and those who cheat the system.

Defrauding our benefit system is particularly abhorrent to many New Zealanders. We do not pay our taxes to provide welfare so that a few can line their pockets - but that's exactly what is happening under this Labour government.

My Parliamentary Questions have unveiled that over 61,000 people receiving the Domestic Purposes Benefit, and 50,000 receiving the Sickness and Invalid's benefits, owed taxpayers a debt at the end of June 2006. For some, their debt represents an accidental overpayment, but for many it's fraud. The ten largest debts owed by DPB, Unemployment, Sickness and Invalid's beneficiaries - all the result of fraud - add up to a staggering $5.6 million.

The ten largest debts taxpayers are owed by people on the DPB totals $1.5 million. The largest single debt is $200,934.31, which is being repaid at somewhere between $19 and $76 a week. At best, this debt will be repaid in 50 years, though taxpayers may have to wait as long as two centuries.

The 'top' ten Unemployment Benefit debts come to a (slightly) lower $1.2 million , with a largest debt of $174,686.90. Repayments are equally slow - between $20 and $47.50 a week, meaning a repayment timeframe between 70 and 167 years.

Even by comparison, the ten largest Sickness Benefit debts (total $1.1 million) and Invalid's benefit debts (total $1.7 million) are huge. The largest Sickness Benefit debt is $201,376.56 - being repaid at between $10 and $32 a week. This represents at least 121 years - and up to 387 years - of debt.

The largest Invalid's Benefit debt is the biggest of all - $221,312.33. With repayment a measly $15 to $25 a week, it will take at best 170 years, and at worst 283 years, for taxpayers to have their money back.

These figures represent centuries of debt - and fraud on a grand scale. Of course, taxpayers will never really recover most of this money, despite recent hollow comments from the Minister for Social Development and Employment, David Benson-Pope, that his Ministry 'is committed to recovering any and all debt it is owed'.

It is time for the Minister to come clean and tell the public what the real cost of benefit fraud is. Doing so would not be beneficiary bashing, but fighting theft.

Adding insult to injury, more than a million dollars worth of these huge debts were not even prosecuted. If an employee stole $200,000 from their boss, they would be in prison - and the same rule should apply to people who take advantage of taxpayers. Justice must be done.

ACT's solution would see better checks on benefits and beneficiaries, to make sure they are paid to the right people. The Minister and his department must be more accountable for the taxpayer money they use, and the effect that welfare has on our families and our society.

Our compassionate welfare system exists so people can receive the assistance, support and encouragement they need to return to independence. Large-scale fraud not only rips off taxpayers, but reflects unfairly on people in real need as well.

Thousands of people use our welfare system to get the hand up they need in a time of particular difficulty. They deserve all the compassion and assistance that we more fortunate Kiwis give them. However, the truly needy must not be used as a shield for those who abuse the system, break the law, and rip off the rest of us.

Heather's Parliamentary Questions - and the Minister's answers - are available on our website atwww.act.org.nz/welfaredebt , along with a table comparing the results.


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