On Newshub Nation: Lisa Owen interviews Social Development Minister Carmel Sepuloni

Lisa Owen: The Prime Minister says our welfare system needs an overhaul and it will happen soon. Her comments came in the same week that the Salvation Army said the cost of living in New Zealand is causing a new wave of poverty and creating a national crisis. Social Development Minister Carmel Sepuloni joins us now. Good morning, Minister.

Carmel Sepuloni: Good morning, Lisa.

What does it mean when you say ‘an overhaul’?

Okay, well, I guess the first thing – I just want to say that this will come as no surprise to people, because actually, this was part of our Confidence-and-Supply Agreement with the Greens when we were forming Government. There’s a whole lot of policies that we had leading into the election that we committed you. You know, those things will be part of the consideration when we’re doing this, but actually, we totally realise that we’re going to need some expertise help here, and so we have also talked about the need for an expert advisory group. And so without wanting to pre-empt the work that they’re going to undertake, already, as I said, there’s a whole lot of things that are laid out in our policy and in our Confidence-and-Supply Agreement.

So we’ve seen ads for an expert advisory group for jobs. How many people on this group? And what’s your time frame?

We’ll announce that in the next few weeks, Lisa, so today on the programme, I can give some kind of general details, but I can’t pre-empt the announcement.

What can you tell us?

Well, I can basically tell you what’s out there in the public arena that some people may not have seen, like I’ve been asked what will be taken into consideration. Our public agreement with the Greens states very carefully, very clearly that we will be considering excessive sanctions, that we will be looking at the interaction between the welfare system and Working for Families, that income adequacy is a consideration for us as well.

So level of benefit.

Income adequacy is a consideration for us as well, so we need to be looking at all of those things. So I can tell you that those things will be part of it. But can I just say? There’s been lots of discussions in recent weeks about service delivery and the culture through MSD, and of course that has to be part of it too. Of course we need to be looking to make sure that people are getting access to what they’re entitled to, that their rights and dignity are upheld and they’re not being treated disrespectfully in any way.

Okay, there’s a lot in there, so we’re going to unpack some of it, but first, what is your time frame to make actual change – not just talk about it; to make change.

So change has already started happening; can I just say that?

But it’s another committee, Minister, and you know what people are going to say. The National Party put out a press release saying you got 75 committees, and this is another expert panel/committee.

National did have an expert panel on this as well. We now have to undo some of the damage that was inflicted on us over the last nine years.

So time frame for actual change.

So time frame in terms of announcing the actual scope of work that will be undertaken and the advisory group – well, you can expect that to happen in the next few weeks, and then from there–

What about actual change?

From there you will see what their programme will be. In terms of actual change, I think, you know, I want to put it out there – work has already started to be commissioned; changes have already started to happen internally, and that’s my expectation. But this is a big piece of work, so can I just say–?

Understand that, but you have obviously been nine years in Opposition. You were very vocal about the welfare system. Have you not come to the party ready to go with the changes that you want?

There are some things that have already started happening, but this has got to be a comprehensive work plan, and this needs to be something that is enduring. So once we’ve put the changes into place, we want to make sure that they are enduring. There are things that have started to happen. For instance, when I became the Minister and I saw the level of correspondence that was going out to people that were writing to MSD, I was – quite frankly – embarrassed at some of the replies that we were giving to New Zealanders who were writing to us with concerns. So there has been a complete shift in the way that we respond to people that have concerns with MSD, and that’s been an active directive from me.

Okay, well, let’s work through some of the things that you’ve touched on. So you acknowledge that there is a toxic culture, this so-called toxic culture within Work and Income.

I am concerned about the culture, but I want to put it down to the fact that we’ve had nine years under a National government which has basically been steering the welfare system in a particular direction, and I will say this – the culture under National was to make it as difficult as possible for people to be able to access what they’re entitled to at Work and Income New Zealand. And now our job is to turn that around.

So single biggest and specific thing that you are going to do to change culture.

The single biggest – if there was one answer to that, Lisa, then the problem wouldn’t be as complex as what we’re seeing now, but can I say? There’s a whole lot of things, and so I don’t want to oversimplify it, because that would that would be unfair.

Well, just give us one. If there’s a ton of things, just give us one thing, because people want specifics.

Okay, well, I’ve give you one thing. Okay, so in our policy leading up to the election, we talked about the need to rewrite the principles of the Social Security Act to ensure that the tone we were setting through the legislation was the tone that we expected to be rolled out on the ground, and so that will happen–

So an empathetic and responsive system, as you have used those words before.

One that ensures that people get access to what they’re entitled to, that the implications for children are taken into consideration for any policies that are rolled out; one that upholds the rights and dignity of New Zealanders – I think it’s really simple.

Here’s the thing – we have talked to the Public Service Association; they are concerned about caseloads for Work and Income staff, and some people say that they’re between 150 to 200 cases per front-line worker in some situations. So to provide that empathetic and responsive service, are you going to need more front-line workers? How many?

That’s definitely a conversation that needs to happen with the PSA. There are changes that are being proposed that actually will have implications for staff.

So how many more do you think you might need?

That’s not something that I can answer right now, Lisa, but we do need to take into consideration the staff here. I’ve met really good case managers across the country who are doing a fantastic job. Unfortunately, the perception out there is that more often than not, the experience is negative, and we need to turn that around.

So you’re not ruling out bringing on more case managers so they can spend more quality time working out their clients’ needs.

I’m not going to give you an answer about that yet–

But you’re not ruling it out.

…because we’re in the process of undergoing the change.

Okay, well, you talk about the fact that some cultural changes are underway, that you’ve told people what your expectations are about this service. I got a copy of a letter written this week by the Auckland DHB. It’s about a woman in her 50s who was in hospital with a serious medical condition. She’s been living in a cemetery in Auckland, has zero income but was discharged on to the street. This letter states that Work and Income told her that they couldn’t give her an appointment for five days. She’s homeless; she’s just been discharged from hospital, zero income – is that an empathetic and responsive service?

That’s unacceptable, and so I’m not going to protect situations where I think they’re unacceptable. I think that unacceptable, and so I would expect, in those situations, that if the person is not getting the response that is appropriate, then the ministry needs to be informed; I need to be informed so that we can react. I’ve told people–

This letter was sent to various ministers within the Government as well.

I’ve told people on a number of occasions when they raise issues like this with me – make a complaint. I have no issue with making a complaint, because we need to know the extent of the damage that we’re attempting to fix here.

But the question, I suppose, is that you believe you’ve made your expectations clear about wanting an empathetic and responsive service. You’ve just said that that doesn’t meet your standards.

Doesn’t meet it.

So are they ignoring you, the staff? Or do they just don’t get it?

I think we’ve got to put it into context here, Lisa, and I’m not going to be overly protective of the Ministry. But the context is that MSD is a huge machine. You know, it’s like this massive jumbo jet that’s been set on a certain direction for the last nine years, and that direction – as I said – is under a government who did everything they could to deny people access to what they’re entitled to. But to expect me to be able to put the brake on mid-air and turn that jumbo jet around immediately is a little bit unreasonable.

So you’re saying you need more time.

The wheels are in motion, and we’re beginning the work – well, not ‘beginning the work’; the work is well underway. But we want to do it comprehensively–

So how long do you need, then, to change the culture?

I think it’s going to be a work in action for a while. Don’t ask me to put a time frame on that, but what I can say are simple things.

But people are living in poverty now. I’m sorry to interrupt you, Minister, but people are living in poverty now.

Absolutely.

They’re hungry now, and they’re about to get cold soon.

Yeah, and, Lisa, if I had it my way, I’d click the fingers and we’d be able to fix it immediately, but unfortunately, it’s more complex than that, and so can I say? There are things that have come to my attention, and I’m just like, ‘How did we allow this to happen where the checks and balances haven’t been in place? How is it that a case manager who’s only been in the job for one week has the power to cancel or suspend a benefit?’ Yes, so things like that.

Okay, well, let’s look at some specifics. You say that you want people– You claim that National tried to stop people getting their entitlements, so you want people to get what they’re entitled to.

Absolutely.

Can you afford for that to happen? How much is not being collected that should be in benefits and allowances? Do you know what that figure is?

Can we start with the fact that asking if we can afford for that happen is null and void when actually we are legally compelled to make that happen? In the legislation–

I know, but you’ve got it capped–

…we as a state have to give people what they’re entitled to, and so that’s where our obligation lies.

So you’ve got no idea what that number is?

Well, I will tell you this – like, some of the areas that are most under-accessed are the areas that working families – so low-income working families – should be accessing but don’t know they’re entitled to or, for some reason or another, don’t feel comfortable going into a WINZ office. So Childcare Subsidy, OSCAR, Accommodation Supplement – those areas are actually undersubscribed because people don’t know that they are entitled to that support. These are low-income families that could benefit from that additional support, so we should be making it known to them that they are able to access that.

Ministry documents released to The Nation under the OIA last year estimated that $592 million is not being collected in Accommodation Supplement, Childcare Assistance, Temporary Additional Support. Have you allowed for that in your Budget figures? If you’re going to encourage people to get everything that they’re entitled to, you’re legally obliged to pay, have you got the money?

That money has to be there, because the reality is that you don’t say–

You will find it.

…‘Oh, hang on a second. There’s more 65-year-olds than we expected, and so therefore we’re overshooting on the Superannuation budget.’

But that is a big number, and your Budget is tight.

The Social Security Act and the way it works is that if people need access to support and they’re entitled to it, then you give it. So the money has to be there

Yeah, so will you raise your debt limit in order to facilitate making all the payments?

I don’t think it’s about raising my debt limit; it’s about making sure they give–

So you’re saying you’ve already got the money there. This is an important question, Minister, because that is a lot of money that could be paid out. Just want to know that you’ve accounted for that in your Budget and the money is there.

Where are we losing money in other areas because we’re not providing the supports that we’re supposed to be through MSD, you know? Where are they having to go?

So you say you’re going to make savings in health and things.

You’ve talked about Salvation Army and the fact that they’ve had an increase in the number of people – or we’ve had that put to us – who are having to seek support. Well, actually, if they were getting what they were entitled to through MSD, would they be needing to go to Social Services and NGOs to get food parcels and other types of support? You know, those are the questions we have to ask. So the cost is not– The cost has been shifted somewhere because they’re not getting the support that they should be through MSD.

Okay, we’re running out of time, and there’s a bunch of things I want to get through, so some things we’ll move through quite quickly. You’ve said that you’re going to ditch the sanction against solo parents who won’t name the other parents. You’ve said that will happen at the earliest opportunity. When will that happen?

Everything that we put in our policy and that we’ve announced has to happen in the next three years, and so that’s all I can say to you at this stage. It has to happen.

So you’re telling people that they potentially have to wait three years for you to ditch a sanction that you knew all through the campaign and before that you were going to get rid of.

I’m absolutely committed to ditching that sanction, but it would be done within the next three years.

Not within six months?

I can’t tell you that that’s the case. It’ll be done– The commitment is making sure that anything that we had in our policy is going to happen before the next election.

Can you imagine how unsatisfactory that is for people listening to this interview? 17,000 kids are missing out on that money.

Oh, look, and I absolutely agree that that sanction needs to be dumped, and so the commitment coming into the election – we never it would be done in the first six months. Everything in that policy was that it would be done within the next three years.

So why is it so hard to do it sooner?

I think, you know, Lisa, I’m not saying that it’s not being done sooner; I’m just telling you that it’s being done within the next three years. And what I will say–

Is it money? Because in a letter to an advocacy group, you said the repeal of that piece of legislation will require additional funding. So you must have an idea of how much it’s going to cost you. How much is it going to cost you?

Yeah, and I do have an idea of how much that’s going to cost us.

How much?

From memory, I think was $280 million. Yes.

Right, so do you not have the money to do it immediately?

I’m not telling you that I’m not doing it immediately; I’m telling you that we’ll do it in the next three years. Can I say, Lisa, though? As part of–

The next three years is a long time for people who are living in poverty, Minister.

I need to say, Lisa, too that as part of the welfare overhaul, we’ve said that we will be getting rid of excessive sanctions. There are other areas that we need to look at on top of this, and so–

So which other ones will you ditch?

I’m not telling you that now–

Not turning up to appointments? Okay.

…because as I said to you before I came on the show that a lot of this work has to be undertaken by the expert advisory group as part of the welfare overhaul, and so I can’t preempt that. All I can tell you is that prior to the election– or actually, as part of our agreement with the Greens, we committed to a welfare overhaul that would include some of those things.

Here’s the thing – your manifesto says that children have to be at the heart of welfare policy. Sixty per cent of all children living in poverty are in benefit-dependent houses. So that is one thing that you could do right now to alleviate some of the pressure on those.

And that is one thing we’re definitely going to do, Lisa. Can I also say? What was really important was making sure that we had a Families Package that was targeted towards low- to middle-income families and households, and that’s exactly what we did. And so some of those changes have already rolled out. More will roll out on July 1st. Those families that we’re talking about that are struggling the most will be the ones that gain most from the Families Package.

And we know about that package, so I want to ask you about some things that we don’t know about. So the Children’s Commissioner has come out and said repeatedly the single most significant thing you could do to raise kids out of poverty would be to tag benefits to the median wage, just like super. Why don’t you do that?

So part of we expect the welfare advisory group to be looking at as part of the overhaul is income adequacy, and so let me just say that that–

If they tell you to do it, will you do it?

Let me just say that income adequacy will be a major consideration by that welfare advisory group.

So I’m asking you – if the welfare advisory group agrees with the commissioner that you should tag benefits to the average wage, will you commit to doing it?

You’re giving me a hypothetical situation that preempts the work that the welfare advisory group will be undertaking, and it wouldn’t be fair of me to make comment on that now, Lisa.

What I’m trying to canvas here is how binding do you regard the recommendations of this advisory group?

The advisory group, I’m looking forward to seeing what they come up with. Our commitment is to reduce child poverty. And absolutely, absolutely understand that the welfare system has a part to play in that, and as the Minister for Social Development, I’m looking forward to the recommendations that come out of this and working with the rest of–

But you won’t be bound by them.

…Government to ensure that we are meeting our obligations with regards to reducing child poverty.

Okay, nice to talk to you. Clearly, we’ll need to follow this up once we know more about the advisory committee. I hope you’ll come back. Carmel Sepuloni, thanks for joining us.

Thank you.

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