Minister of Employment DAVID BENSON-POPE talks to The Jobs Letter Editor Dave Owens about where the Ministry of Social Development is headed.

The Jobs Letter: What is your vision for the Ministry of Social Development? Where do you see it going over the next three years??

Benson-Pope: I see it continuing in the direction it is already going. It's been extraordinarily successful in terms of the reintegration of the policy and delivery arms. I see a Ministry that has already changed the culture that was part of the previous era. I mean, most of those appointees were appointed in the Rankin time and it does take a while for the organisation to change. But the attitudes are different and what's happening is quite different

One of the most positive things is the opportunity that has been presented, with the reduction in unemployment benefit numbers, to give a more comprehensive service to clients, and not just unemployed or beneficiary clients.

The Jobs Letter: What do you mean by a more comprehensive service?

Benson-Pope: What's happening now is that we've got a thing called the New Service Model. Previously, when people came through the door at Work & Income, the sort of service they got depended on their benefit entitlement. So a sickness beneficiary might have got X hours or X amount of case managers' time. If you were employed you got virtually nothing. But there is a whole different focus happening now and this trial model — which has run up to now at twelve sites — says the support you get is independent of what your entitlement might be.

The first point made to people coming into a Work & Income office is that we've got a new approach — it's not compulsory but it's really worthwhile. It's explained to people and we ask if they would like to try it. And most go for it. People can still demand their rights and say they want to sign up for X - but most don't. And that's led to a lot of people never even hitting a benefit because they're off to work or further training or a Jobs For You seminar or a health intervention or whatever. So they're completely missing out on the undesirable part of the system.

That's not to say we're not going to support people who need it … because we're the Labour Party, that's what we do. But the focus is very much on work as a default — recognizing there will be some who can't.

Now, those trials have worked really well. They've changed the attitude of people delivering the service — it's more rewarding and it fits more with positive Work & Income offices. They're quite positive places. I joke that even the security guards smile and when we don't need them it will be even better. But they are very welcoming places. And they've integrated Housing in a lot of those offices, and are now trying to convince IRD they want them there as well for obvious integration with taxation and the Working for Families issues. So that model now is going to Cabinet with a view to rolling it out across the whole country. It's called the New Service Model for want of a better name.

But it'll take us a while until we get statutory change around the benefit changes that we're working on right now and the New Service Model will be part of what will be offered in the immediate future even before we change the law. That's because most people are going for it. And that it has already led to much better interventions and getting people into work. That's absolutely the philosophy that's around the benefit reform: the default is work.

The Jobs Letter: What do you think the biggest challenge is for your Ministry during the next three years?

Benson-Pope: I think keeping the same level of intensity going on a slightly softening job market. I mean, we're certainly not in recession territory despite what the doomsayers would wish. But things are a bit tighter. But already this is being counter balanced a bit by a shift in the dollar. It doesn't take much when you are right on the sensitivity margins for things to get better. Certainly in my patch, a lot of manufacturers are saying those few points are making a big difference, so orders are now profitable again.

The biggest challenge for MSD is not in employment related matters, but the issue around the reintegration of Child Youth and Family. In the wider social sense I think that's a critical thing for the country. Cabinet took that opportunity because the chief executive went back to Canada unexpectedly and suddenly there was an opportunity and I guess it's a compliment to the operational level and delivery level of the Ministry right now that we felt they were able to do this. So I think that's their biggest challenge.

The Jobs Letter: So you're not diverting from where Steve Maharey was heading?

Benson-Pope: I'm delighted with the state of the Ministry I've inherited. And one of things we do as a Cabinet is work pretty well as a team. I'm in the position of having inherited these decisions, in terms of wider policy direction, that were made long before I was even in Cabinet. So I'm constantly touching base with my colleagues who have been there and know where we got to, so I don't go off on a harebrained idea that's mine and not appropriate. We need assurance and support from colleagues.

The Jobs Letter: the NZ unemployment rate is relatively low compared to other countries and compared to ten years ago in NZ.

Benson-Pope: Lowest in the OECD is better than "relatively low"…

The Jobs Letter: But no one is predicting unemployment to reach 2%, as it was a generation ago. What do you consider to be "full employment?"

Benson-Pope: I think in terms of the non-Maori population we are probably quite close to it now. Isn't it 2.3%? Just with the normal churn, it can't be far from full employment.

I remain concerned about Maori unemployment. Still, it has dropped from 19%, and it is at 7.2%, which is much better. But because of the greater decrease in non-Maori unemployment there is still a disproportionate number of that group. It is perfectly statistically understandable. And comes back to skill levels. One of the reasons Maori have always suffered inordinately as a result of market movement or policy change is because they tend to be less skilled. So they are the ones that get flushed out of the bottom of the system sooner and we just can't have that.

I know that my Cabinet colleagues and Minister Horomia is as focused on this as I am, as is the Prime Minister. It comes back to skills, it comes back to support, and it comes back to family expectations. So we're doing quite a lot of work around Maori organisations about what is expected in terms of participation and I think we'll keep on the case.

I think when we realise the demographic change that we've got with the huge change in the percentage of young Maori and Pacific Peoples in this country, you and I need them to be working, to be purely selfish, to fund our superannuation in three or four decades.

The Jobs Letter: Skills shortages, rather than high unemployment, is now characterising the labour market. In your view, what has caused this?

Benson-Pope: I think the first thing is the reliance, in the 90s on the free market to provide the training. I grew up in a time when I guess we were too regimented in the other direction, where good academic kids went off to school to learn Latin, French and German and the other kids got flicked off to the technical institute — the forerunners of the polytechs — and made a lot of money subsequently being the tradesmen that we can't find or afford these days.

And in the 90s that reversed entirely under different philosophical leadership and left everything to the free market, which — in typical free market fashion — didn't deliver. I'm not being trite or simplistic when I say that when no one's got the responsibility for work force supply, you end up with the problems we've inherited. We've had to get quite aggressive about that. And I'm only too aware of the work Dr Cullen is doing right now to refocus the tertiary institutions in this regard. But whether they are electricians or radiographers, people don't get trained in just a year or two. So there is a lag.

I think the other part of "we're going to change our philosophy and really encourage people in to tertiary education" is fine but what it led to was everyone wanting to go to university … and polytechs pretending they were universities. I can say that because I was a polytech council member in Dunedin at the time. So the business end of training in the trades, particularly carpentry, engineering, electrical and plumbing — all of those just fell over.

We're on the case. But no matter how many thousands of young apprentices we have, it takes a long time to fill that decade of gap. With Modern Apprentices, they've hit every target early, we've got 8,300 right now. The target is 14,000 by 2008.

And, at the other end, changes to the student loan scheme are already showing dividends in keeping academically skilled people here for the top professions. It's a bit of a mix and I think we've got a good formula.

The Jobs Letter: Our readers will be aware of the variety of existing programmes to address skills shortages. Are there any further plans under development to address skills shortages?

Benson-Pope: Yes. One is what we're calling Enhancing Parents and Other Carers Choices (EPOCC). We've done a lot of work with early childhood access, which has presented its own problems around getting the expert teacher workforce in place. This is sort of the other leg of the double around the early childhood stuff. The simplest way we can enhance people's choices around getting involved in the workforce is to have places where their sons and daughters can be properly supervised and looked after. There are big social issues here and we're certainly not trying to force anyone in to work who doesn't want to work. But we are very aware of workforce supply issues and the fact that most people working part-time right now are saying they want to work longer hours.

I can see a lot of potential in freeing up state institutions and taking a load off teachers at virtually no cost. My kids are lucky they've got a Phys Ed teacher who always opens the gym after school so they can have a great time. But there are a lot of fantastic facilities all over the country where there's no sports co-ordinator or the teacher is doing something else. I think we've got really low-cost opportunities to make sure our young people have more supervision than they currently do, which has some big positives in a couple of directions.

I think there are some big plusses that are starting to appear on the horizon that are becoming more important because of the constraints that we've got on workers supply.

Good employers know how important it is to make sure their staff is happy in their workplace. And good employers support them so that when they have their inevitable family crisis they are able to go and deal with it.

The Jobs Letter: The prime minister's call to get more mothers into the workforce has been criticised as not valuing parenting. How do you respond to this criticism?

Benson-pope: I think that was a political beat-up at the time. What Helen articulated was what I'm saying now. The intent was to give people opportunities. We don't actually try to make people do things, what we do try to do is make sure they have a freer choice about what they do — whether that's opportunity for young people to get schooling or opportunity for you or me or a carer who would like to work to be able to do so because the options are available. So no one's being forced off to the workforce. But we do not recede from trying to incentivise work as we have done with the Working for Families package.

The Jobs Letter: There has been a lot of media coverage about the big push to get more single parents into the workforce. Is it so important to get this group into work?

Benson-Pope: Lets talk about Domestic Purpose beneficiaries. I think what the hospitality industry is doing is fantastic. The industry needs people who want to work part-time jobs or funny hours. They have a pilot that is running training — I think it works mostly for women on the DPB while kids are at school — to work in coffee shops and general food service industries, bars, cafes. They do a few hours when they can. It's good for everyone. In due course when their children are off their hands they have some skills that they didn't previously have to make available in the workforce. I think that's really positive.

The Jobs Letter: The government has said it would like to see all the benefits rolled into one. What progress is being made on a core benefit structure?

Benson-Pope: We're getting there. We've seen some of the changes already coming on April 1st with Temporary Additional Support replacing the Special Benefit. All current recipients of anything are grandparented at the changeover point. But because we've put so much more money in upfront with the Working for Families package and a lot of people are picking up Child Support, Accommodation Supplement and all sorts of different components —it is quite hard to quantify. Someone not in work may be getting both Child Support and Accommodation Supplement. They won't get an In Work payment but there are lots of boxes being filled.

We are looking very carefully at trying to minimise the number of losers. In terms of Temporary Additional Support, the real problem with the Special Benefit was that what had been an exception had almost become the norm. And it was also being very inconsistently applied across the country because it wasn't rule based. Temporary Additional Support will be. There'll be no discretion when interpreting who is entitled to it. There will be set criteria. There still will exist the capacity for Emergency Benefit for people who have an issue when that happens. We don't do punitive but we are trying to do simple. And while I can't say that we will be delivering a single core benefit certainly the system is going to be hugely simplified.

We are not prepared to say, "Well, sorry, no one will be worse off". We're looking case by case at any issues that arise. But it seems to me the corollary of saying no one will be worse off is also saying no one will be better off either, and we're not going there because so many of the vast majority are so much better off.

But we're grappling now with the really hard stuff and certainly what we're coming up with is a much simpler system than we had before. If you put that into the equation as part of a big context of huge amounts of money in student loan abatement removal and the Working for Families package — I think we're getting there.

The Jobs Letter: Now that the Community Employment Group is gone, what is happening in community economic development?

Benson-Pope: Quite a lot. A lot of schemes are running out of Family and Children services — which is MSD core anyway. There is a lot of residual community employment coming over right now to the Ministry of Social Development, things like Family Start. There are lots of other initiatives which, I'm pleased to tell you, have a more robust oversight than some of the ones you are referring to.

We are pretty keen to empower and support community because when it comes to community disadvantage we all end up paying for it one way or another. It's much better getting people developing their own schemes… as they are around the youth gang issue in Auckland. There are as many different approaches as there are communities solving that problem … but they're all good and we'll support all of them as much as we can. I think it is important that people make decisions and develop interventions that are right for their own patch.

The Jobs Letter: The most senior Ministers are undertaking a spending review. Do you have any idea what that is going to mean for the Ministry of Social Development?

Benson-Pope: Not a great deal because of the financial controls that have been in place. We have an agreement that MSD would only have an operational increase every three years. This was to be the year for a further increase and we've just forgone that. So the financial management has been very strong.

The other help is that a large part of our budget is demand driven. While that's not budgeted in a normal tight sense because it can never be, there is still a contingent liability sitting there. And because of the massive reduction in the unemployment benefit numbers in particular we are not spending anywhere near what we would otherwise. As so long as those outcomes continue the Treasurer will smile happily in the direction of [the Ministry's CEO] Peter Hughes and myself.

The Jobs Letter: The Mayors Taskforce for Jobs has adopted the concept of a Job Guarantee for all young people. The government hasn't yet taken this on … do you have a view on the Job Guarantee?

Benson-Pope: We've agreed with that, we share their goal. You mean we haven't delivered on that yet? Look, I think the Mayors Taskforce been a very successful initiative and we certainly share the goals. We'll be re-signing the Memorandum of Understanding with the Mayors Taskforce for Jobs soon.

The other good news is Auckland has also signed up. Dick Hubbard is very pleased he's finally changed the city's policy on that matter. And we're extending the number of Ministers that are involved in our regular meetings with the Mayors by adding in Youth Affairs as well. So we're serious about it, it's another one of those areas where I think we've got a really good record of cooperation with local government. A bit different from my days in local government.

Source — interview with David Benson-Pope, 20 March 2006, by the Jobs Letter editor Dave Owens.

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