MSD sanctions double, impact on employment unclear
Data released to RNZ after an Official Information Act request shows that there were 3015 times that a client was sanctioned, then recomplied with their obligations and then left the benefit to work.
There were 210 times when a client was sanctioned and then left for work, then recomplied with their obligations. That could include people who found work and then ended up back on the benefit.
Graham Allpress, group general manager of client service delivery, said sanctions and obligations were one part of a broader picture that could contribute to a jobseeker finding work.
He said MSD could not provide data about sanctions that led to someone re-engaging and then finding work because it could not link the sanction and the person finding a job.
'People get jobs because they apply for them, and because they take steps to become ready for work.
'We use sanctions as a last resort if someone is not meeting their obligations, to encourage them to engage with us and get back on track by re-complying their obligations.
'In 2024, 92.8% of sanctions were lifted after the client re-complied with their obligations and got back on track. That is the purpose we use them for.
'If someone gets a benefit and they have work obligations, one of the main things they agree to do is regularly apply for suitable jobs. By meeting their obligations, they maximise their own opportunity to get a job and 'exit to work'.
'We are engaging with more jobseekers more frequently through proactive appointments and Kōrero Mahi seminars. Our support for jobseekers includes training, work assessments or work experience, and help with CVs and applying for jobs.'
In 2018, the then-Labour Government produced a paper on the effects of work-related sanctions.
'Real barriers'
It said that regimes less severe than New Zealand's were effective in increasing movement from benefits to work. But evidence from the UK and US was that very harsh sanctions could have adverse effects that drove people away from employment.
Isaac Gunson, spokesperson for the Child Poverty Action Group, said it was unlikely that so many more people had started missing appointments.
'What seems more likely is that MSD has become quicker to cut people off, despite the very real barriers many face in attending.
'These are people doing their best in tough circumstances. They may not have access to childcare, a working phone, or may simply be confused by the system.
'Pushing people off income support doesn't make the job market fairer or more accessible. It just assumes success is possible while unemployment rises and support systems become harder to navigate.'
Economist Shamubeel Eaqub said there should be clearer ways to determine whether sanctions were having the effect intended.
'How can we be confident they are doing their job?
'I have no problem with them pulling these levers if they're effective. If they're creating a better outcome then of course we should be doing it. But we shouldn't just punish people.'
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'It won't stop any future government doing something it actually wants to do,' Edgeler said. So what are some of the concerns about the bill? The bill has drawn considerable feedback, with earlier public submissions strongly negative. After the discussion document was launched on the bill in November, the Ministry of Regulation received about 23,000 submissions. Of those, 88 percent opposed the bill, 0.33 percent – or 76 submissions – supported or partially supported it, and about 12 percent did not have a clear position, the ministry reported. Seymour has since dismissed the negative submissions and alleged some of them were made by 'bots'. Among the top concerns the ministry's analysis of the feedback found were that the bill would 'attempt to solve a problem that doesn't exist'; 'result in duplication and increase complexity in lawmaking' and 'undermine future Parliaments and democracy'. Bill opponent University of Auckland Emeritus Professor Jane Kelsey has said the bill is too in line with minority party ACT's ideology and will 'bind governments forever to the neoliberal logic of economic freedom'. Other government agencies have also weighed in. In a report on the bill after launching an urgent inquiry, the Waitangi Tribunal found that 'if the Regulatory Standards Act were enacted without meaningful consultation with Māori, it would constitute a breach of the principles of the Treaty of Waitangi, specifically the principles of partnership and active protection'. It called for an immediate halt to the bill's advancement to allow more engagement with Māori. In a submission received by Newsroom under the Official Information Act, the Legislation Design and Advisory Committee said it had 'misgivings about the capacity of this bill to offer improvement' and it might have 'significant unintended consequences'. In terms of the financial impact, a regulatory impact statement by the Ministry for Regulation estimated the bill would cost a minimum of $18 million a year across the public service under the minister's preferred approach. Seymour said the cost of policy work across the government was $870m a year, and the bill was about 2 percent of that. And in an interim regulatory impact statement, the Ministry of Regulation itself expressed some ambivalence about the bill. The ministry said its preferred approach was to 'build on the disclosure statement regime … and create new legislative provisions'. It said it supported the overall objectives of the bill but 'that an enhanced disclosure statement regime with enhanced obligations, will achieve many of the same benefits' and also impose fewer costs. Does it remove the Treaty of Waitangi from governance? It does not say that, but the bill's silence on Māori representation in government has troubled opponents. 'On the consultation point, Māori clearly weren't adequately engaged with before the RSB was created and introduced into the House,' Geddis said. 'The Waitangi Tribunal's report on the RSB is unequivocal on this issue.' Geddis said in contrast, that LDAC guidelines contain an entire chapter of guidance on how Te Tiriti should be considered. 'That very silence creates uncertainty as to how the principles in the RSB are meant to interact with these principles of the Treaty.' Under principles of responsible legislation outlined at the start the bill, there is a statement that 'every person is equal before the law,' which some have said dismisses Māori concerns. Te Pāti Māori co-leader Debbie Ngarewa-Packer at the bill's first reading last month attacked the bill. 'If you look through the whole 37 pages, which I encourage that you don't, the silence on the impact for Te Tiriti is on purpose. The bill promotes equal treatment before the law but it opens the door [for] government to attack every Māori equity initiative.' Seymour has insisted Māori voices were heard through public consultation. 'We had 144 Iwi-based groups who submitted… If that's not enough, then I don't know what is,' he told RNZ's Guyon Espiner. What does the bill say about property rights? A section that has drawn attention says 'legislation should not take or impair, or authorise the taking or impairment of, property without the consent of the owner unless there is a good justification for the taking or impairment; and fair compensation for the taking or impairment is provided to the owner; and the compensation is provided, to the extent practicable, by or on behalf of the persons who obtain the benefit of the taking or impairment'. The question many opponents have raised is what 'compensation' might mean and who might seek it. 'Applied to the real world, this means that anything the government does that decreases corporate profits opens it up to possible legal action,' bill opponent Ryan Ward wrote for E-Tangata. What do supporters say? Writing for the New Zealand Institute, Bryce Wilkinson said criticisms of the bill as 'a 'dangerous ideological' drive towards limited government are arrant nonsense'. 'The bill itself is a mild transparency measure,' Wilkinson has also written. 'The Regulatory Standards Bill's modest aim is to make wilful lack of disclosure harder.' 'At the end of the day we are putting critical principles into lawmaking,' Seymour told Newsroom. 'We know bureaucrats don't like this law. For New Zealanders that's a good thing.' So how can we have our say on it? Now is the time to do it. Public submissions to the Finance and Expenditure Committee will be accepted until 1pm Monday 23 June. Submissions are publicly released and will be published to the Parliament website. What happens after that? Does the bill look likely to pass? Here's what happens next. The select committee is due to report back on submissions by 22 November, although Seymour has asked that to be moved up to 23 September, Newsroom reported. After the select committee, the bill would proceed to a second reading, then a committee of the Whole House, and a final vote in the third reading, which would need support from more than half of Parliament to pass. If the bill passes, it would likely come into effect on 1 January 2026. While the Treaty Principles Bill, also championed by ACT, failed in Parliament in April and was voted down by every party but ACT, Edgeler said the path for this one was less shaky. 'This one, of course, is more likely to pass because the promise in the coalition agreement is to pass it,' Edgeler said. That agreement requires National to support the bill all the way through, which is different to the agreement's clause on the Treaty Principles Bill. By extension it also requires New Zealand First to support it all the way through because their agreement requires them to support the agreement with ACT. 'Whether it passes in the exact form, who knows, whether New Zealand First continues its support or insists on changes which might drastically alter it, or even water it down further, is a different question.' NZ First leader Winston Peters has described the bill as a 'work in progress' and Geddis said: 'It is possible that the changes NZ First want so alter the RSB's content that it ceases to deliver what ACT wants it to, creating a stand-off between the two coalition partners.' Geddis agreed the coalition agreement makes it difficult for National to not support the bill. 'Given that these agreements are treated as being something close to holy writ, and given how much political capital David Seymour is investing in this bill, it seems unlikely that National will feel able to withhold its support. That then leaves NZ First as being, in effect, the decider.' One last question – what were those regulatory principles again? From the bill itself, in summary, the principles are: the importance of maintaining consistency with various aspects of the rule of law; and legislation should not unduly diminish a person's liberty, personal security, freedom of choice or action, or various property rights, except as is necessary to provide for, or protect, any such liberty, freedom, or right of another person; and legislation should not take or impair property without the owner's consent unless certain requirements are met. The requirements include that there is a good justification for the taking or impairment and fair compensation is provided to the owner; and the importance of maintaining consistency with section 22 of the Constitution Act 1986. Section 22 of that Act provides that it is not lawful for the Crown, except by or under an Act, to levy a tax, borrow money, or spend public money; and legislation should impose a fee for goods or services only if the amount of the fee bears a proper relation to the cost of providing the good or service; and legislation should impose a levy to fund an objective or a function only if the levy is reasonable in relation to: legislation should preserve the courts' constitutional role of ascertaining the meaning of legislation; and legislation should make rights and liberties, or obligations, dependent on administrative power only if the power is sufficiently defined and subject to appropriate review; and the importance of consulting, to the extent that is reasonably practicable, the persons that the responsible agency considers will be directly and materially affected by the legislation; and the importance of carefully evaluating various matters as part of a good law-making process. These include: who is likely to benefit and who is likely to suffer a detriment; and legislation should be expected to produce benefits that exceed the costs of the legislation to the public or persons; and legislation should be the most effective, efficient, and proportionate response to the issue concerned that is available.
