Q + A Episode 12 2011
Paula Bennett
Interviewed by PAUL HOLMES

PAUL The Social Development Minister is with me. Thank you very much for joining us on the Q+A.

PAULA BENNET – Social Development Minister
Good morning.

PAUL Even without the Bon Jovi tickets.

MS BENNETT Yeah, even without them.

PAUL How did we get to this – 333,000 New Zealanders on benefits?

MS BENNETT Well, some of it is because we are seeing unemployment higher at the moment, so over the last years you’ve seen the unemployment benefit increase, so there are people looking for work unable to find it, and the welfare system is there to support them. We certainly see a higher number of sole parents requiring assistance from the state, and we’ve also seen the invalid’s and sickness benefit really double in the last 10 years, which is really quite concerning.

PAUL Quite concerning, but, I mean, it’s crept up over the years. It’s kind of been a steady kind of a rise, hasn’t it? There have been ups and downs, but... I mean, 1970, 2% of New Zealanders on benefits; it’s now 13%.

MS BENNETT Yeah, well, quite a different country we live in now, you know. So we’re quite different here in 2011. But I suppose you’d need to look at the sort of settings that are there and the incentives and obligations that are in the welfare system to ask yourself whether we’ve got it right.

PAUL Yeah, but does it frighten you?

MS BENNETT Oh, absolutely. It absolutely frightens me that we’ve got between 10% and 13% of our working-age population...

PAUL And 11% of government spending on welfare.

MS BENNETT Yeah. Reliant on welfare.

PAUL The welfare working group want you to... Well, they want a target of 100,000 fewer people on benefits by 2021. How’s that going to happen?

MS BENNETT Yeah, well, I think some of it you will see just happening as jobs become available and they move on.

PAUL 100,000 fewer beneficiaries.

MS BENNETT Yeah, as they move off the unemployment benefit, I think we’re seeing it. But what they’re saying is you need to put different settings in place to get that 100,000 off.

PAUL Well, the unemployment benefit is not the largest part of the welfare spend, is it?

MS BENNETT Not at all.

PAUL No. Only 60,000 people are on the unemployment benefit.

MS BENNETT Yeah, fewer than that now, fortunately, so your main people on it are on the sickness, the invalids and the DPB.

PAUL And why are these people on a benefit? Is it a lack of will to work? Are they lazy bastards who won’t get up in the morning? Are they people who won’t go out of their way to find a job? Are they simply people who don’t want to work? That’s the perception.

MS BENNETT Oh, no, I mean... No, no, no, Paul. I mean, for many of them, they are looking after children and need that sort of assistance so that they can look after their children and their marriages are broken down or else they weren’t in relationships. For others, they have illnesses which mean that they cannot work. But for some, I think, the system so focuses on what they can’t do instead of actually focusing on what they can do, and I think that’s quite a big part of the recommendations that come from the Welfare Working Group.

PAUL There's also, of course, the difficulty that there aren’t the jobs available.

MS BENNETT Well, for some, yes, certainly, and we’ve seen it much tougher in the last two or three years, but then we saw invalids and sickness double in the years 2000s, when supposedly it was the best times and we had unemployment at record lows. You know, a third of those on the unemployment benefit between, sort of, 2000 and 2008 were there for longer than a year. 140,000 people have been on a benefit for 10 of the last 20 years.

PAUL Yeah. And in fact it does vary. 13% now of working-age New Zealanders on a benefit. It’s been worse. It’s been as high as 16%. Of course, it always goes up when the economy goes bad.

MS BENNETT Yes, it does.

PAUL So why are we suddenly panicking now?

MS BENNETT Well, we’re not. We’re just saying, do we want it to continue to increase like it is? Do we want to see different settings in place? Can we support people better? And I think that’s the key thing out of the recommendations: it’s, you know, instead of putting them on, leaving them there, squandering lives away and not actually looking at what we can do for them, we simply put them for... 60% of them have no work test whatsoever, and I think that’s wrong.

PAUL But again, I wonder how realistic... OK, let’s talk about that shortly, but I wonder how realistic these targets are. In 2008, New Zealand created 9000 new jobs. How does that soak up 155,000 people who don’t have jobs?

MS BENNETT Yeah, look, we also have seen 20,000 young people go off, from the year to March, to go into work. Since October and the changes were put in, 3500 have gone off the DPB. We have seen the unemployment benefit dropping – 30,000 more in employment if you take the HLFS numbers – the Household Labour Force Survey. So I’m not saying things are easy, but I am saying we should be getting people more ready for jobs as they come up.

PAUL Should people be more prepared, do you think, to move town?

MS BENNETT Yeah, I’m not sure about that. I sort of think that...

PAUL But why shouldn’t they?

MS BENNETT ...there are places where there is more work available, and we should certainly be looking at that. At the moment, there is...

PAUL And there are places where there is no work available and there's not going to be any work available.

MS BENNETT Yeah, that’s true.

PAUL I mean, for example, should somebody unemployed in Masterton be considering moving to Christchurch , where there's going to be a lot of work?

MS BENNETT I’m sure that some people are doing that anyway. And you see some of our more rural communities who really struggle to get people into farming jobs. I mean, really struggle – they tell me that they advertise all the time, and yet young people in particular are not taking up that type of work. So perhaps it does need a bit of a shift in attitude for some as well.

PAUL Well, that’s right, and I suppose, too, in the 1960s and ‘70s and the ‘80s, early ‘80s, we had the railways, which could absorb all kinds of numbers of people. You had the post and telegraph, which could absorb all kinds of numbers of people. The world’s gone IT, hasn’t it?

MS BENNETT Yeah, and women didn’t work as much, let’s be honest. You know, they stayed in the home longer and there wasn’t that sort of second-level employment for them. So, as I say, times have changed quite dramatically. But, you know, we can do it better, and I just think we can do better by them, and that is the focus of it.

PAUL Well, let’s talk about what we can do better. The Welfare Working Group suggests some tough measures, so is it first of all time to get a bit tough on welfare?

MS BENNETT Well, it’s definitely time to look at the settings, where they are, and the obligations and the incentives.

PAUL What do you mean settings?

MS BENNETT I mean settings as in 60% sit on the benefit at the moment and we do pretty much nothing with them. We don’t help them find work. We don’t help get them work ready. We don’t give them quick access to drug and alcohol if they need it. We’re not actually... Alcohol assistance, sorry.

PAUL Yeah, counselling.

MS BENNETT (LAUGHS) Yeah, we’re not feeding them drinks. But, you know, we don’t get them the sort of support they need, so we need to ask ourselves, have we got the support where it should be? Teen parents is a classic for me – 4500 births to teen mums last year, most of them on the benefits. You know, do we really wrap the sort of support around them that we should be? Better training, better education, better assistance in how they manage themselves.

PAUL Yeah, what do you mean by support – better support for...?

MS BENNETT Yeah, better access to education, better childcare support for those that need it most, making sure that the training and the education that they get is meaningful and will actually lead to them having more productive and worthwhile lives so that they can get out of that poverty trap. It is not easy on a benefit at all.

PAUL Well, DPB is one area where the working group suggests some changes, so what might need to change with the DPB?

MS BENNETT Yeah, I mean, they certainly... As far as employment assistance is at, so how are we helping people into jobs? How do we look at those that go onto...?

PAUL What, when they’ve got a 3-month-old baby at home?

MS BENNETT No, no, no, not at all, and they don’t suggest that sort of 3-month... The 14 weeks for them was around people who have an additional child while on benefit.

PAUL OK, hang on a moment...

MS BENNETT And, Paul, that’s one in four. One in four have another child while they’re on benefit.

PAUL Well, let me talk about this, because this is... One of the perceived issues with the DPB – it always has been, really – is that it encourages single young women to keep having children the taxpayers have to support. Now, the Welfare Working Group says there seems to be... Oh, suggests one or two things to get young mothers into part-time work when the second child is about 1.

MS BENNETT Well, that’s additional child, so they’re saying you could go on with three children, obviously – you know, a relationship break-up – and they’re not talking about that second or third child. They’re just saying we do need to look at where the obligations are on those that are having other children while on benefit.

PAUL What do you support? So, OK, I’m a 16- or 17-year old. I get pregnant and then baby’s 3 and I have another one.

MS BENNETT Mm-hmm.

PAUL So at what stage after the birth of a second baby should I be encouraged into work?

MS BENNETT Yeah, well, certainly you can look at international evidence and, sort of, where that’s at, but the other recommendation of the Welfare Working Group was when that child is 1 year old...

PAUL What do you think of that?

MS BENNETT Well, the ministerial group’s looking at it at the moment and it’s part of those considerations, so..

PAUL Would that tend to sound sensible to you?

MS BENNETT What I do think is... Particularly with those teen parents, I just think we can do so much better by them. If you’re 16 and 17 years old and you have a baby, there's a 45% chance that you’re going to have another one while you’re on benefit. So I’m saying let’s get those mums educated. Let’s wrap that support around them. Let’s actually look at how we go differently.

PAUL So if somebody’s 16 or 17 and they get pregnant and they go on the DPB, how long are they liable to be on the DPB? What are the stats?

MS BENNETT At least seven of the next 10 years. So they are more likely to be on for substantially longer, and that’s not a big surprise to anyone, but I’m just sort of saying... So what they really... When they talk about an investment-based approach, it’s let’s invest in them early. Let’s actually, you know, help them with that education. Let’s help them get onto further training.

PAUL OK, OK, so does that seem quite sensible and quite reasonable to you that after one year – second baby is 1 year old – that they should be encouraged into some kind of work?

MS BENNETT Well, work or training or, you know, into something else. I mean, it’s an option that we’re looking at.

PAUL See, what might that do for the mother-child relationship, though, you see?

MS BENNETT Yeah, well, what you do see in a lot of those units is the childcare centre is attached to the classroom, if you like, so the learning centre. So they are very much still bonded and still together, so it’s not about ripping the child away from the young mum. It’s about actually trying to have that relationship closer, but we can do far better with education and...

PAUL Right, so it’s not one or the other – ripping mum away from the baby or it’s...

MS BENNETT Well, certainly not, and, I mean, we have evidence that says that quality early childhood education can make a big difference for those that are most disadvantaged in society, so it’s as much about wrapping the support around those children as it is around the mothers as well.

PAUL In the end, the welfare bill, Minister, is $6.5 billion. Is that sustainable?

MS BENNETT Yeah, and it’s going up, you know, is the reality for it as well. And...

PAUL Well, you’ve been telling us things are getting better.

MS BENNETT Yeah, so, what you’re seeing, though, is a lot more spend in accommodation supplements and special-need grants and... I mean, we spend about $120 million in special-need grants in a year.

PAUL Does it have to come down from $6.5 billion?

MS BENNETT Well, it depends what the country wants to do in the future...

PAUL What do you want to do?

MS BENNETT ...and I say you are limiting your options if you continue to see it at that level and rising. I would like to see it decrease.

PAUL I mean, is it reasonable, as a political observer, to say that if they’re putting seven ministers on this particular matter that we’re looking at bringing it down from $6.5 billion to another figure?

MS BENNETT Yeah, it’s not the focus in the early years, though, I must say, Paul. The focus... Actually, and the Welfare Working Group recommends spending more. You know, if you’re going to actually put that right support around, it costs money, but you will see long-term benefits of it, and not just financially, but equally just in the whole aspirations and hopes of people in moving them out of that sort of poverty trap.

PAUL Right, so DPB, then – more training, more support for the young mothers and so forth?

MS BENNETT Yes, particularly for young mums. So how do you actually get them better access to childcare?

PAUL I understand. I understand.

MS BENNETT How do you look at after-school care better? How do you actually invest more upfront so that they have better opportunities later on?

PAUL Alright. Will you encourage sickness and invalid beneficiaries to work?

MS BENNETT Yes, absolutely.

PAUL Well, you see, if you look at invalid beneficiaries in New Zealand, your own department tells us 13% of them are intellectually disabled, 10% are schizophrenics, 30,000 have two or more incapacities, and of course they would have had a job, possibly, and they’ve had a meltdown and the boss at the next job says, “Why did you leave the last one?” And who’s going to hire them?

MS BENNETT Yeah. Look, I think for many, the reality is they go onto welfare early and will be there for a lifetime, and I want to live in a New Zealand that does that, so, you know, there has to be a place for those that are really incapacitated and unable to take up work. But then for another portion of them, we put them on the invalids benefit – and isn’t it horrible to call them invalids, anyway? – and then we just leave them alone. We don’t look at what they can do, and, you know, we know for some illnesses, work is actually the key to them getting well, and instead it sort of feels like we’re throwing them a bit on a scrapheap and say they’re not worth anything. Well, they are worth something, and so for some, I think we can turn it around, look at what they can do, look at where their strengths lie, look at the sort of training and support we can put around them.

PAUL The public perception might be – with sickness benefits in particular, sickness beneficiaries in particular – these people are people who lie around in bed thinking they’ve got the flu all year.

MS BENNETT No, not quite, but it is supposed to be a short-term benefit while you’re unable to work, so you’re supposed to be getting well.

PAUL Is there sufficient testing?

MS BENNETT We’ve changed some of the testing. We changed it last year, so now, certainly in those early few months that are the most important as to where you look at their eligibility for being on the sickness benefit... I’ve also really slowed down the movement between benefits, and that’s been a key focus for me as minister. So in 2007, you had 4000 people going from the unemployment benefit into the sickness. Last year, you had 260. So that’s just about getting better focused on that, sort of, work obligations as well as where you put the support.

PAUL See, some of what you’re talking about sounds awfully expensive. You know, it needs a big machinery in place to be administering... to be checking if people are really sick or to see how they might find some work.

MS BENNETT Yeah, you’re quite right.

PAUL And again in the end, where are the jobs?

MS BENNETT Yeah, well, it’s expensive now, so let’s make no mistakes about it. As you’ve quite rightly pointed out, it’s more like, sort of, $7 billion, and it’s expensive. The Welfare Working Group report says it could cost, sort of, $285 million more a year to put this kind of support around them. But I think these people are worth it. I think they’re worth us investing in now to see them having long-term benefits and to actually leading much better and healthier lives.

PAUL In the end, it comes down to jobs.

MS BENNETT Yeah.

PAUL Doesn’t it?

MS BENNETT It does. It does.

PAUL And we don’t have them.

MS BENNETT Well, I don’t think that’s true. Just look on Trade Me this week and there's 10,000 jobs. I can tell you that 20,000 young people have gone off the benefit and into work, you know, in the year to March. You know, we are just seeing... We ARE seeing jobs coming in, but what we need to do is get people ready for them when they are there in greater numbers, so everyone’s not going to be kicked off next week or there's no changes coming in a big hurry. It will be a long-term sustained programme of change.

PAUL Another recommendation is free reversible contraception. So this is where you have continuous contraception that you can reverse.

MS BENNETT Yeah, so there's lots of different sort of models of it, but there's a new one...

PAUL Do you like this idea?

MS BENNETT Oh, I’m a big fan of... They’re called the LARC – long-acting reversible contraception, and it’s a...

PAUL And would you make it compulsory?

MS BENNETT No. No, no, no, I don’t think we’re quite at compulsory sort of stages, but they’re saying free, and it is free now. There's a small, minimal cost. PHARMAC have gone into fully funding it, and it’s about women having more control of themselves as well, so I just think we can make it more accessible, and I think we can certainly increase the education around it and make it available, particularly for those young women that want to have better choices with their lives.

PAUL Well, it could be made available to young women who have their first child on the DPB so that they avoid having a second one.

MS BENNETT Yeah, Family Planning have been doing a lot of work around that, and, as I say, it’s...

PAUL Doesn’t seem to be doing much, does it?

MS BENNETT Well, no, that’s not true, actually. Teen births went down by about 120 last year, but as other births went up. So we saw an increase in births of babies last year, but a slight decrease in teen pregnancies. But we can certainly do better in the education...

PAUL But weren’t you telling me earlier that if a 16- or 17-year-old has a child, goes on the DPB, that 40% of them will have another child?

MS BENNETT Yeah, no, I said 45%, unfortunately, Paul. So the reality is 16 and 17 years old, 45%...

PAUL But what about some reality? What about some reality? What about some sterilisation?

MS BENNETT Oh, no, that... I don’t live in a New Zealand that believes in sterilising people at all.

PAUL Alright. Let me see. I suppose some people listening to this will be thinking this is all very sugar-coated, but in the end what this is is just classic National Party beneficiary bashing. Prod them and poke them. It’s very easy to bash beneficiaries, particularly in the lead up to an election. Some people are just sick, some people have just made mistakes.

MS BENNETT Yeah, I find it really offensive to think that it’s... I don’t think it’s actually beneficiaries’ fault that they’re actually sitting on benefits for long periods of time when they actually could have other opportunities. I think it’s almost government, so we need to look at where those settings are and where we’re putting the support...

PAUL What about time limits on welfare?

MS BENNETT ...and we don’t support them.

PAUL What about time limits?

MS BENNETT Yeah, the Welfare Working Group did look at it...

PAUL I’m sure people get used to being on a benefit.

MS BENNETT Well, without a doubt, you see some people that have been on for substantial periods of time, and you do wonder if that’s, sort of, been the best life they could have led. But then there's others that should be there for a lifetime. And that’s where it is – it’s this massive system, and it need to be flexible and see people as individuals that are on it, and that’s certainly the complexities that we have to work our way through.

PAUL One final question. You made an election promise: stop kids leaving school and going on the benefit, because that leads to nothing – leads to long-term poverty going nowhere.

MS BENNETT Yeah.

PAUL Have you achieved that?

MS BENNETT We’ve certainly seen those, unfortunately, on the youth benefit going up, but we’ve seen that trending down over the last year again.

PAUL So you failed on that? You failed on that?

MS BENNETT We haven’t failed on that.

PAUL Well, you failed to deliver.

MS BENNETT You’ve just got to say look at the economy. I mean, we came in at a global recession. It was actually already going up before we came in, so for three consecutive quarters, the youth unemployment benefit was going up. That did continue to trend up as the jobs were harder to find, but now we’re slowly got that trending down again.

PAUL Minister Bennett, Paula Bennett, I thank you very much for your time.

MS BENNETT Thank you.

PAUL You can pick up your Bon Jovi tickets at the front desk.

MS BENNETT (LAUGHS) AC/DC’s more my thing.

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