The Government’s damage control has now seen it agree to top up the funding for the ministry, although Simmonds said the restrictions on the use of the allowances would not be lifted because the top-up might still not be enough.
The ministry has also confirmed the restrictions on the use of the allowances will not be altered, saying the extra funding was to cover “critical supports and services” pending a review of the longer-term funding arrangements.
Luxon and Finance Minister Nicola Willis have both promised a funding increase in the Budget.
Simmonds has been tasked with starting a review into how the ministry’s funding is managed. She said that, while the review took place, it was important for the Cabinet to have oversight of any changes.
Luxon said he still had confidence in Simmonds but the Cabinet wanted to be able to consider any major changes in allowances in the future.
“It was poorly consulted and poorly communicated. And it’s right that she apologised for it.
“As by her own admission ... I don’t think it was handled as well as it could have been. I think it caused anxiety and stress for people.”
The issue has become a political firestorm, as National blames Labour for not giving the ministry enough funding while Labour has criticised National for the changes to entitlements that affect disabled people.
Hipkins said taking the decision-making power off a minister and requiring her to go to the Cabinet was an “extraordinary step”.
“It’s basically saying that a minister is not able to make decisions in their own portfolio without going to the whole of the Cabinet. It’s a massive vote of no confidence in Penny Simmonds.”
Asked about the apparent funding shortfall from Labour’s 2023 Budget, he said that, had Labour known the call for the funding was as high as it was, it would have provided more.
He said the ministry was still relatively new after being set up in July 2022. It worked on a needs-based system, which made it difficult to calculate how much funding was required.
“It’s always going to be a bit of a thought exercise to try and gauge what that level of need is.”
On Tuesday morning, Willis said the Government had agreed to top up the funding to ensure the allowances could continue until the end of the financial year.
“It remains our intention to provide a significant uplift to that ministry in the Budget.”
She said any further decisions the ministry made about changing funding criteria needed to be consulted on, and go to the Cabinet before they could be made.
“We think it’s important that, where the ministry makes significant decisions that have a significant impact on people with disabilities, that Cabinet has an opportunity to consider those decisions and provide our input on them.”
She said Simmonds had been asked to start a review of how to manage funding, saying the ministry had previously overspent its allocated amount before the end of the financial year.
Claire Trevett is the NZ Herald’s political editor, based at Parliament in Wellington. She started at the Herald in 2003 and joined the Press Gallery team in 2007. She is a life member of the Parliamentary Press Gallery.
