Carmel Sepuloni on what's wrong with the welfare system

Published Jul 11, 2024, 5:00 PM

Labour's deputy leader, and former deputy Prime Minister and Minister for Social Development, Carmel Sepuloni joins Thomas this week. She discusses how Labour lost Auckland and their response to crime in the city, before a deep dive on welfare, benefits, and what needs to be done to fix this issue. 

Hello, and welcome to on the Tiles. I'm your host, Deputy political editor of The Herald, Thomas Codlin. Today a meeting of deputies, a double deputy and a deputy of History of Deputization. Carmel Sipeloni, deputy leader of the Labor Party and and former Deputy Prime Minister as well. Thomas welcomed to on the Tiles.

How you doing, I'm doing very well, thank you.

I wanted to start with Auckland. You know you're you're an Auckland and you've been an MP since two thousand and eight, a spell outside of Parliament, your seeing term, I think, but you've you've represented an Auckland electorate for most of that time. Calston Labour's trying to win back the city. I mean, when did you Did you ever feel last year that you were about to lose it to the extent that you did.

I started to feel that decline and support during the Auckland lockdown. I was living up there, living the lockdown, doing the zoom world, trying to continue with all of the work I needed to do as a minister. But I could feel it and see it even amongst those that I knew, and within my own neighborhood.

And yeah, that's an experience shared by many of your colleagues. There's really it started then, it's a long time ago. Did you you know throughs it was what twenty twenty one through twenty twenty two to twenty three? Did you were you trying to message to the Wellington leadership like, hey, let's we're losing up here. We can't afford to lose this city. What was What were the discussions like there there was retail crime issues, happened after the lockdown, you know, a general sense that Wellington was just not quite in sync with Auckland.

Yeah, and we did have those conversations. I feel like maybe, in hindsight, I and some of the other Auckland MPs could have been more assertive on what we felt was happening in Auckland. And so there's probably a level of regret there that we didn't push a little bit harder. I feel like some of the decisions that we made, for instance, around how we would address retail crime were the right decisions? Were they fast enough? I think that's the question that we need to ask ourselves.

I remember, I think your former colleague Kadie Allen mentioned an into your One of your colleagues might have mentioned how difficult it was as a labor cabinet some of those decisions around crime. I think looking at the additional search powers where we're put through last year watches and jewelry and other things of high value were added to a list of goods prohibited for sale for cash over specified value. There's anti porning kind of legislation. That was difficult I think for labor to come around to. Did you share that difficulty, Well, what wasn't difficult. It was the work that we did around our young people. So those that were getting into trouble that we're committing the ram raids, we had all the evidence. We were fully cognizant.

Of the fact that they had multi poor, complex issues and that we weren't going to be able to resolve the issue of them offending and committing crimes against retailers unless we got in there and addressed all of the issues that were occurring. Now, that program of work was actually successful. Even the Minister for Children during scrutiny week said that it was. It didn't necessarily do what some people wanted, which was to come out looking tough on crime, and you know, and and punishing in certain ways these young people. But it was the more effective approach and it's proved to work.

In Heinz I think and some of Prisippins Precipicins interviews. Surely after he became Prime minister there there was just a discussion about that, some of the differences in cabinet around the Auckland Lockdownhes was saying, look, I was I was sort of pushing. I probably would have gone a week faster to lift that lockdown in Auckland. I think grant rop And might have been on Society mentioned. This is just from memory now, but just Sindra Juams was quite wedded to the position that was ultimately taken in terms of just stamping out delta. Where were you on in that discussion as someone wh.

I was living in Oakland and I am near the end of the Auckland lockdown, I feel like we were losing the social license. You know, I saw pretty respectable people when I'd go for a walk, completely breaking the rules, you know, having people over. And at that point, when you've lost social license, you really do need to reassess whether it whether or not you can continue. So probably would have been down for a reduction in that lockdown, ending it much sooner. At the same time, I have to say there were some parts of our community that were pretty adamant that we needed to continue, and I do want to acknowledge disabled people who were really scared of getting COVID and what the implications might mean for them, and so there were so many things to weigh up.

Sort of it's interesting looking back at it now. You know, Labor's a mainstream party, it has a very broad church support. You've got people who well, you know, half the country in twenty twenty, which is as bad as broad as you can get. But then you've got that, you've got a core or a small element of your vote which is very wedded to the very rigorous stance you took on COVID nineteen, and then you've got a much you know, there's a spectrum beyond that. Is it impossible to keep those two groups of people together, people who were who were so wedded to that very stringent early twenty twenty position and the people who are probably quite happy with where you got to, which is a traffic light and then ultimately lifting restrictions altogether.

I think for a large part of the COVID period, not saying that we've got rid of COVID, but the intense COVID period, most people were on the same page. It was nearing the end of that intense period where there started to be much more differing views, and I think you started to see a split, and as I said, there were some groups of people who very rightly wanted to hold on to much harsher measures for a longer period of time.

You held the Social Development Portfolio for the whole six years of your time in government. What are you most proud of.

I'm most proud of the work that we did around actually addressing incommatequacy and the welfare system. That investment into lifting benefits was hugely significant. It was a reversal of Ruth Richardson's changes back in nineteen ninety one. But it wasn't just that that saw the increase or addressing of incommatequacy, lifting their abatement thresholds so that people could earn more and still receive the benefit. So work a little bit more part time still receive the benefit. But that's the income adequacy side of things. And I've always been really clear that for me, the welfare system is also about supporting people into work. So we made huge investments into upskilling and training opportunities, and many of those programs that we instigated over the six years that we were in were really successful and that's work that I'd want to continue as well.

Yes, it's interesting you should raise that budget twenty twenty one, which was the benefit increases. So I was looking through this, so the cost was three point earlier. Yeah, a lot of money, and that was over the four or four years, and I think that I was just adding up the so of that budget, which I think was a three point eight billion dollar over one year, about a billion of that was for us. And I was looking at the Child Poverty Report for that last night and part of me I meant to print it off, but the image has decided not to appear on my print up. But it lifted. It was estimated to lift between twelve and twenty eight thousand more children out of poverty on the before housing cost me in the year after it was implemented, and between nineteen and thirty three thousand more children out of poverty on the after house after housing cost measure and that same year, So quite it's probably I think of all the budgets, probably the most impactful impactful, I think.

So, But it was never about one initiative that was one of the ones I'm most proud of. But there were other measures and policies that we implemented where people didn't even know there was an issue. So one of those was child support pass on, where sole parents had been discriminated against in the welfare system since nineteen thirty six, and by passing on child support, I think we were forecasts to lift between six to fourteen thousand kids out of poverty. So it was always about a suite of measures that would help us achieve the main goals.

Sorry such and pass on child support. That is when the sole parent access is the child support through Sorry.

I'm so. Traditionally, what's happened is that if you're on a benefit and you're in a new relationship your kids to someone else, and that someone else pays child support. If you're in a relationship with someone you're both on benefit, you can get that child support. If you're a sole parent and you had an ex who was paying child support for the children, then that money went to the state to subsidize the benefit that you were receiving so clearly discriminatory. And as we know, sole parents or children and households where there's a sole parent are more likely to be living in poverty. So measures like that make a difference.

Now you mentioned before that you see what you see the welfare spaces is about helping people into work as well. Some that's quite that view often divides people in that space you often see. I mean there's big debate about the way in which working for families, by seeking to encourage people into work, actually penalizes people and pushes them into poverty. I mean, do you think could is there anything that you are looking at or think could be done to ensuring comeadequacy help people but achieve your aim of getting people into work as well.

Well, we certainly hadn't finished what we wanted to do with working for families, and we had that under review. We made some first step promises in our manifesto going into the election, but there was more that needed to occur. One thing I would recognize is there is always that debate with the in work tax credit and whether or not that should be given to war families or not. Now I'm not saying that all families don't need financial support in some way. But one thing I've always been keenly aware of is that for our poorest families there are in work expenses that can sometimes make it really difficult to work. You know, the additional cost of having to move around, transport, the additional costs, even though some might be subsidized, not all of it is for childcare. And so there are very real in work expenses we need to be mindful of for our lowest income working families as well.

Right, So, so yes, for people often talk about marginal the marginal text rate issue, and but then obviously transport and child here, it does it does mount up? Would you be open to I mean, the inwork text credit was that was the sort of centerpiece of your Working for Families policy of the election. It was national stole and then you tuned on part of it. Yeah when they got into government, so they and they you tuned on the abatement threshold, which was a twenty twenty six change. I hope, I'm yeah, And he's going to lift for two thousand, that's right, yes, thank you? Would would you look at this and just for our listeners following along, So, the family text credit is a tax credit that basically goes to everyone on a benefit, but also people who are in work and receiving Working for Families. It's quite a broad based text credit a few hundred thousand families. The inwork text credit is only for people who are and work, And there is a debate around whether or not you should beef up the family tax credit because it goes to more people. Would you be interested in perhaps broadening the family the work tax credits to help people who are only receiving the family tax credit.

I wouldn't want to kind of preempt what our changes might be, but this is a policy that we need to look at seriously going into the next election. What we were made very aware of when we're in government is that if we were going to do anything significant that was going to lift children out of poverty, it needed to be in the Working for Family space. And what we announced in the lead up to the election were only first steps that, you know, in terms of what we might do with our manifesto, there had to be something else that was done through Working for Families if we were going to be genuine about lifting children out of poverty. So there is definitely more work to do in that space.

And I'm not going to ask you to what I would love to twist your arm and give you to get you to spill the election manifesto in this podcast.

We don't have it yet, that we're still consulting. There's really nothing to spill it this stage except it is an area that we're taking seriously and we're looking at right.

So, but are you could be interested in looking at that? I mean, it's it's that family tax credit when I whenever I profess to be an expert or to even talk to a great number of people about this, but whenever I do, that is really the thing that everyone sees. It's that that family text credit issue is really one that people want to see.

You know, we will look at a range of things and and what our overall objectives will be and what will help us to achieve that. I think the thing to keep in mind, and this is when we were weighing things up and looking at it over the course of the year or even two years and the lead up to the last election, is that unless there's an injection of money, then you are going to be taking something from someone and giving it to someone else. And you know, right now, I don't know whether there are any families that could have to lose given the current economic climate, and are the cost of living issues that people are facing. So you know, these are things that we're going to have to discuss over the course of the next right.

And so when you say that this is this is this idea that you would take, you would would change the way that the scheme works. So you would be increasing the eligibility of the in work text credit by reducing what other people get somewhere else.

And so who would stand to lose then, and are they in a position to lose really, So you know, whatever we look at, we need to be mindful of the fact that, yeah, unless there is an injection of money, then you don't want to be taking from one group to give to another and creating, you know, people that are worse off.

Would you that the the most working for family's tax credits I think become are adjusted for inflation, but only when inflation exceeds five percent And that's a problem too.

Yeah, it's it very complex and you can't anticipate what's going to happen.

And very expensive. Are when when it when it when it triggers, when it hits five percent but also very punitive when inflations through three percent. Well you you, you know, Labor's rightly proud of the child poverty impacts of the of the benefit indexation that Andrew Beecroft was then Children's Commissioner said it was the single greatest thing you could do to alleviate at child poverty. That's now been reversed. But but would you know, would you look at future and actually doing indexation of both benefits and those texts.

Well, at this stage I can't say that's off the table. You know, I'm quite open minded as to what we might look at over over the next couple of years and the lead up to the election. And I know that that issue is very complex. It is difficult to be able to ascertain what might happen. And it does mean that some years you get a big increase, in other years do you just for below the five percent and then there's nothing for nothing extra for those that are receiving working for families. So it's not off the table in terms of something that we might look at.

I think historically I think the Clark government it was indexed and then it was you know that the Key government maybe to stop the indexation, so you know it's a trend herexation.

It is also the really hard thing about when you come in after a government have changed a whole lot of things, because then you're weighing out what you reinstate back to what for us, you know, my view, what was fair, and then at the same time looking at the exciting new things and looking at what is fiscally possible, I guess, And so those are some of the considerations.

Going into what else are you looking at as part of the Working for Families review? That's sort of It was under review for a long time and there weren't many major changes that emerge from it, but possibly because changing it is very expensive.

It's very expensive, and it's very complex. So I can't even say that we landed on anything other than what we went into the two thousand twenty three election with in our manifesto, because we hadn't it was continued to look at it and try and ascertain what we could do, where we would get the money from to do it, and what issues we were trying to address by any changes that we're implementing. So obviously child poverty reduction remains a focus and a priority for us, and that will continue to be a focus and a priority going into the next election. There were other issues where there working for families. It was the complexity of the system and the fact that so many people didn't understand how it worked.

But it is a nightmareishly complicated system.

It is it is, and so how do we simplify the system so that it's more accessible to New Zealanders so they actually understand what they're entitled to, so that they can access what they're entitled to and have a daily conversation about it as if it's every day because people actually get it, as opposed to stab in the dark. Am I eligible for something here? Oh? Yeah, I am?

You know, and then people are hedging and not getting everything they are entitled to because they're afraid of getting them too much in triggering that's.

Right of you being overpaid and then at the end of the text you having to repay money to in then revenue. So there is work around simplicity as well to make it more accessible for New Zealanders that I think we need to undertake.

What could you do? You have any idea of what we we You could have the.

Answer if I had the answers. I might have gone into the election campaign with a more wholesome working for families policy, but we didn't yet have all the answers. We just knew Stage one was the boost and the threshold lift so that more families could access it.

Do you think, I mean one of one of the other complaints is that you're getting to quite high marginal tax rates around you know, people who are families whoever, someone full time on the minimum wage was really getting smashed just because of high wage inflation. Which is a good thing about text policy, well, it has an interface with the working for families and I just you know, I think of all the if you're taking a step back and labor and national fighting over text, but I think that the possibly the most difficult thing for labor on text is that is that forty eight thousand threshold for the thirty percent tax rate kicking and that's this year. Is someone on the minimum wage just just just nudging that so that they have a couple of hundred dollars which would have been textedt thirty percent had threshold not lifted. Is that something you know, with your chip poverty reduction, with your social development had on that would have been difficult as a labor imp because that is that that is such a high marginal tax rate, that's such a minimum wage income. You know that that is not good for you achieving what you wanted to achieve. Having that level of.

Textshold without being backward looking on that looking forward, then these are considerations that we need to be very mindful of, and we need to be having conversations about chippies. Made it really clear that you know, nothing's off the table that we're having conversations about tax and our party membership is keenly informing that looked like I'm really excited about this, and so we and we need to be mindful of a range of things, including the interactions with other systems like working for families, like the welfare system, and we need to be looking at it in that kind of fulsome way to make sure that what we end up with leads New Zealand to a place where New Zealanders are better off.

I mean, you could, you know, you wouldn't need to do it was very costly what the current government did, and Labor's prosecuted that ruthlessly, but you know you could just lift that forty eight thousand dollars threshold, which you know, ensures that that people on a minimum wage would keep far more of their of their income over the next few years to avoid getting texted their text brackets.

It's one idea, Thomas, but.

You know, you could there are many things you could. You know, that's just it. You can see why the after fourteen years, you know, and obviously that there is there is substantially less child poverty impact from lifting the seventy thousand dollars threshold and even actually lifting the bottom threshold, which is a lot of university students and part time you know, schoolwork and stuff. But you can see why even child poverty advocates look at that forty eight thousand dollars threshold the minimum wage full time and like you know, yes, it's a text card and it's a text cut from a right wing government, but there is a there is a sort of social welfare issue at that level.

Do you think No, I think we just take away all these rather than how.

Are the text discussions going? You know, you're enjoying kind of like as it. I mean, it's horrible going into opposition, but it's also quite liberating.

Yeah, And I mean they The conversations are really good. However, it's not just tax that we're talking You know, our membership has a broad interest across every possible sector and area that you can imagine. I guess that the tax discussion is the one that seems to garner the most media interest, and I understand it has huge implications any ideas that we might have anything we might want to do. But it's not the only thing that.

We're talking about. What are you interested in? What are the other things we're talking about?

Oh, we're talking about everything. Housing. Of course, child poverty reduction continues to be an issue that's raised by our membership. Tech. The other day, I was at the Creative Precinct in west Auckland, and myself and the members that were there, I had, you know, an amazing experience, but a really fruitful conversation afterwards about the role of our creative industries and technology and what we might want to see moving forward there. So I mean, I could keep going on. We're talking about everything as we should be if we want to be a future Are you going to some of this regional I didn't get to go to the regional conferences this year, but apart from the Auckland one, but.

That would have been an interesting though. Members sort of given reading you the Riot Act a bit about Britt winning the city back.

Yeah, I mean, but still a lot of support. And so you know, these are really robust conversations that happen in there. People say what's on their mind. They have high expectation of their members of Parliament to their leader, their deputy leader, their finance spokesperson, and that's that's the Labor Party that we're part of.

So there's some discontent or perhaps discontents are wrong. Would some members wanting to ensure that the leader and the parliamentary team doesn't arbitrarily I guess use the captain's call idea.

It's been a bit of interesting conversation because there's nothing there's no such thing formally as a captain's call. And if we refer to all of the main policy decisions that were announced last year, they did go through they did go through a New Zealand Council. So I think you know, there was some disappointment with perhaps one or two calls that were made, but we need to be clear about about how those decisions were made and also about this thing called a captain's call, which doesn't technically exist.

Yes, it's sort of something that the media and politicians have created. And it's useful for both the media and politicians because I think it's media it's quite useful to be able to explain what has been done, and as a politician, it's quite good to be able to say I have made a captain's call, and I have done this. When actually said he made a captain call, well, I think I think it was the rule out is a kind of I have ruled out for as long as I am and I think that sort of colloquialism are You're right. I'm not sure whether we ever actually used that language, but I think that the it had it been put to him as a captain's call, I'm not sure whether he would have disagreed with that language.

I would think he would. I went through went through councilaland council, and it also went through caucus. Right.

So, and your messa to leaders, leaders to the to the members as as the current processes are okay or would you would you be open to changing them so that there is a bit more involvement.

From always open to change? And you know, I said on the New Zealand Council now as Deputy Leader. And so I know that there are probably changes that are that are coming up, and don't disagree with some of those changes, but that one you were talking about kind of is quite difficult. Given that there's no formal thing called a captain's call, and given the process that policy.

Went through, members are sort of saying, well that the next time a policy decision is made like that, that probably want a bit more important.

Yeah, but it's hard, I mean yeah, and I mean certainly now if our members didn't make their voices heard in the last three years ago, say they are making their voices heard now and we welcome it.

So how how are you finding the deputy role? I remember your your your predecessor Calvin Davis at a sort of open door policy who did a lot of the pastoral care for the caucus. Because you know, it's a tough job. Are you finding you know, sinking into that role? Ae? We but enjoying it.

I think I was doing a little bit of it as a senior cabinet minister anyway, and as someone who's been around a little bit longer than a few others, you know, I've kind of actively mentored a few people that are in there and that have left. And I enjoy working with my colleagues, so it's not that difficult. You know, the New Zealand Council stuff, well, I get along with all the people that are on it, so when we get together for our meetings, it's a good opportunity to catch up as well as as do all of the work that's on the table in front of us. So I'm enjoying it.

Would you ever, would you ever you aspire to be the leadership yourself?

Never seen it? Yeah, And actually even having been Deputy Prime Minister last year during what was a difficult time. Remember not long after we got made Prime Minister and Deputy Prime minister then norm of the country was flooding and including my own elite for it. And then you had, you know a range of other things happened, including some internal things that were really unfortunate with colleagues, and there were times when Chippy was out of the country and I had to be in the acting role and I can tell you it certainly wasn't easy.

Right, But I prefer to be the two I see, right, So never you don't think I prefer to be the two I see fair enough. I mean, you know, I wouldn't say the same about myself. I'd love to be the letter clear. It doesn't listen all the time, so I can say that maybe she does. So I mean, just just again on this sort of labor policy stuff. I know there is a frustration about the texts, the texts thing being the main thing that people are debating at the moment, But where where do you It does seem to be a bit of a debate on the capital gains versus wealth tax thing. Where do you? Where do you line up on that?

Oh? Look, I'm open to all of the discussions happening on both of those things at the moment, and then we'll see where we land with our tax policy closer to the election. But there's a lot of work that needs to be done before we land on the ultimate policies for what we are taking into the election.

Where were you on the one that we went to cabinet last year and was ultimately shut down the we're not.

We're not supposed to speak about cabinet discussion even afterwards. No, I think, you know, otherwise I might not even be into cabinet. So I think It's important to maintain the confidentiality of kebnet and cabinet discussion, so I won't say where I sat.

The Grant Robinson and David Parker were given allowance to sort of say, well, look this is we agree with the capital decision, but we weekly put this fordam Well, I.

Mean it would be us if they didn't. I'm given that it was their policy that they had written and put forward. Yeah, well, you know, and interesting, I can be mysterious an interesting discussion.

Nonetheless, are you allowed to talk about your celebrity trees right and appearance?

I don't know what you're talking about.

Ms your terrible liar and and and and uh and and this is an audio podcast. But you were you were injured over the over the break and you are you're getting better now.

And yeah, I mean if anyone anyone that's had an R Kelly's injury or knows anyone that's had a Kelly's injury, it can take a bit of time.

Well, I I wish you the best of luck in any future television appearances that you might you might have which.

We which could be Q and A or something.

I hope Jack Tan wouldn't do that. And he's a tough interviewer. But you know, I don't think many people have heard in Achilles on Q and A. But but thank you very much for coming on on the tiles. And that was that was on the tiles for another week. And I guess was Calma Sipperloni, who was the Labor Party a deputy leader and holds a number of portfolios. Thanking you very much for joining us, Thank you very much. That concludes the podcast of this week. We are produced by Ethan Sills, so thank you for that and and please join us next week for more Amatiles.