Social Security Amendment Bill (No 3) - Third reading

Tuesday, March 31, 2015

STUART SMITH: It is a pleasure to speak on the Social Security Amendment Bill (No 3). But before I start I cannot resist, given the comments about how terrible it must to be on the backbenches of the Government, to remind the member David Cunliffe that the worst day in Government is better than the best day in Opposition.

Hon David Cunliffe: Touché. Stung.

STUART SMITH: I am sure you have heard it before.

Tim Macindoe: The worst day in Opposition will be familiar to the member.
STUART SMITH: Yes. This bill, I think, goes on a long-standing principle of the one benefit principle—that is, one form of income replacement for one particular circumstance. I think that is the key to this bill, and I think that we have to get that right. I do share the member, and congratulate his enthusiasm, in supporting the bill to deal with the loopholes that have been identified.

Hon David Cunliffe: Fiscal prudence is our middle name.

STUART SMITH: Absolutely. Fiscal prudence is absolutely a great thing, and this Government has spent a lot of time on getting its house in order in that particular area and better public services are a major target for the Government, absolutely. ACC and the Accredited Employers Programme amendments are really about the dollar for dollar deduction from benefits. The Accredited Employers Programme is a really important part of the ACC system and I would just like, if I could, a moment to explain that situation.

Employers have the ability to take over the payment of the ACC benefit to their injured employees and their medical costs for an agreed period of time. In return, they get lower ACC levies. I have seen through employers in my own electorate the culture change it brings to a business, not only from the employers’ point of view but also the employees taking ownership of managing their health and safety. I think that is a fantastic initiative.

But what we have with this particular loophole is that the bill is written in such a way that it could be read that an accredited employer’s ACC benefits are not subject to the same dollar for dollar for dollar deduction as an ACC payment is. I have got an example here. If a domestic purposes benefit recipient is paid $100 in weekly compensation with no other income, the benefit will be deducted by $100 if it was paid—

Hon David Cunliffe: I raise a point of order, Mr Speaker. Drawing the attention of your good self to your*new-found robust interpretation of the rules against reading from the member’s notes—

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member will resume his seat. I recommend to him a good reading of the report of the Standing Orders Committee at the end of the last Parliament, and then he will not be disorderly and interrupt in that way.

STUART SMITH: It is quite good reading, actually. I can recommend it. I might start again because I have lost my thread if that is OK. If the recipient of a domestic purposes benefit is paid $100 in weekly compensation with no other income, the benefit will be deducted by $100 from ACC, on a dollar for dollar basis. But if that person was paid the benefit from an accredited employer, then there would be no dollars taken off their benefit. That is unjust and has to be fixed.

So, likewise, you could say that the unfairness of that is quite obvious, but in the previous speeches in earlier stages in the bill’s debate, it was pointed out by some that it is not enough anyway and, therefore, we need to deal with it. It did not come from the Labour Opposition but it did come from others. The whole point of our benefits system is fairness. People pay taxes for the reason that they are distributed in a way that is fair. If we do not meet that fairness test, then the whole system falls apart.

If we move to the accommodation supplement, we have a similar situation. If some students whose own personal income, their parental income, or their spousal income does not allow them to get a student allowance and a supplement, they can apply for an accommodation supplement. That is also grossly unfair.

I do have an example for that, if I may be permitted to read on that one. If a domestic purposes benefit recipient—oh, I have got the wrong one. For a sole parent in Auckland with two children, the maximum amount that can be paid in the accommodation supplement is $225 a week. In contrast, the accommodation benefit for a student is only $60 a week.

Tim Macindoe: That is deeply inequitable.

STUART SMITH: It is terribly inequitable. The point is, I guess, that on one level you could say that if a student can identify that loophole and exploit it, then perhaps certain courses they were taking at university would deserve a merit pass, I would have thought. But it is inequitable, and students—

Darroch Ball: Have you thought that maybe they need it?


Darroch Ball: Have you thought that maybe they need it?

STUART SMITH: Ah! The member brings up a good point—maybe they need it. The supplement is designed for a student. If somebody can identify a loophole and exploit it, that is inequitable for everybody else. Encouraging people simply to exploit little loopholes like that is not good legislation. It is not good law. It leads to everybody trying to exploit those loopholes, because, after all, we are a competitive lot. That is what brought us out of the caves, after all—the fact that we are all able to try to exploit the little differences that are available there.

I think that this bill aims to fix that particular loophole. That is something I really support. The Government is all about equity. It is about getting good public services, and the only way we can do that is to ensure that the benefits we do have, that we pay out, are paid on a needs basis, not on whoever can exploit the law as it stands. So I think there is not a lot more I can say unless we could perhaps talk about clause 4, which clarifies eligibility for the criteria—[Interruption] Yes, clause 4—absolutely. That is an absolutely essential part to deal with that accommodation supplement.