Hon PETER DUNNE (Minister of Revenue)
: I move,
That the Child Support Amendment Bill be now read a first time. I nominate the Social Services Committee to consider the Child Support Amendment Bill. This bill is a very significant one for a great many New Zealand families. When the child support scheme was introduced in 1992, to replace the previous systems of court-ordered maintenance in the liable-parent contribution scheme, it was the Government’s intention that it would be a simple scheme, relatively easy to understand and administer, and using taxable income as a consistent basis on which to assess the capacity of a liable parent to provide support for their children. Since that time it has had a number of relatively minor fixes, but fundamentally the scheme has not moved with the times. I can vouch for that, based on the number of complaints I receive about it from the public. In fact, about 40 percent of the correspondence that I receive, as Minister of Revenue, relates to the child support scheme.
For these reasons I began, in early 2008, the most major review of the child support scheme since its inception. That work led to a Government discussion paper released in 2010 and to this bill, which was introduced shortly before Parliament was dissolved for last year’s election. I freely concede that some might argue that the pace of change has
been too slow, given the range of problems identified. For my part I have a considerable measure of frustration that progress has not been more rapid, but it is important to remember that this is an important social reform with many difficult components, and it was therefore vital to make sure that the new format addresses to the greatest extent possible the issues that have been identified, while at the same time recognising that it is impossible, given the variety of individual circumstances, to legislate for every imaginable situation. Having said that, it is my strong view that this bill strikes the appropriate balance.
But it also raises an important issue that cannot be stated too strongly. The child support scheme is a backup arrangement where parents fail to reach agreement over the financial support of their children. Sadly, in too many cases since 1992, it has become the default position, which in my view has given rise to many of the problems. I cannot state too strongly that the overriding preference has to be that when relationships break up, parents reach their own mutually acceptable financial arrangements for the care of their children, rather than automatically defaulting to the child support option. Where that is impossible for whatever reason, the child support scheme needs to be there to ensure the financial support of the children is secure, but it must always be the backstop, not the default. The primary onus has to be on separating parents coming to their own mutually acceptable arrangements for the support of their children.
There is one other general point that I should make, because it is often a point of contention. Child support and parental access do not go hand in hand, nor does the level of child support payable have any influence on determining the level of access to one’s children. That is a separate process determined by the Family Court under separate legislation and has nothing to do with the child support system. The point is that parents have a fundamental responsibility to provide for the care of their children, regardless of whatever access or custody arrangements have been concluded or whatever town or city, or even country, they might live in.
So with the measures contained in this bill, the Government is signalling its intention to confront the real problems with the current child support scheme, to ensure that it is fit for purpose—and that purpose is financial support for approximately 210,000 New Zealand children. The changes in this bill provide for a fairer and more transparent assessment calculation for child support payments that takes into account a wider range of individual circumstances and capacities to pay. The bill also includes changes to the rules relating to the payment of child support, the imposition of penalties, and the writing off of penalties. Broadly speaking, the changes in the bill fall into three particular categories: a new child support calculation formula, which is the bulk of the changes; secondary changes to update the child support scheme more generally; and amendments to the payment, penalties, and debt rules for child support.
It is important to emphasise that over the scheme’s history the formula used to calculate child support has failed to keep up with societal changes, and that ends up affecting the children whom the scheme is meant to be there to support financially. It is now more usual than it was in 1992 for both parents to share the care of their children more evenly. A liable parent may therefore significantly share the care and expenditure associated with raising their children, but this is not recognised under the current child support formula because they do not have arrangements that qualify for shared care. It is now also quite usual for both parents to be working, yet the incomes of both parents are not taken into account. A consequence of this is that the liable parent may not actually be the primary income earner, even though that liable parent is paying all the child support.
On a more basic level, the formula that is applied in calculating the level of child support payable does not accurately reflect the true cost of raising children in New
Zealand today. I think that child support payments should reflect a fair estimate of what it costs to raise a child in 21st century New Zealand and what a parent would normally be contributing towards meeting that cost if both those parents were living together. So the scheme needs to be changed in order to ensure that it is working to help provide financial support and is not becoming in itself an obstacle to parents meeting their responsibilities.
A very real concern that caregivers have is about the non-payment of child support payments by the liable parent, or the instability or irregularity of those payments. Child support debt levels, in particular from penalties, have reached record levels. Although penalties play an important part in encouraging parents to meet their child support obligations, if they are excessive they can actually discourage payment, and the bill therefore proposes a better way of targeting penalties. International studies tell us that child support systems that are perceived as being fairer generally result in higher compliance levels. Together with the changes to the payment, penalties, and write-off rules for child support, a fairer scheme would also provide paying parents with more incentives to make those payments.
The State child support scheme, as I said, should be seen as the backup only when parents are unable to make satisfactory private arrangements for the financial support of their children. For the sake of people in that situation, it is up to us to ensure that the scheme we put in place is run as efficiently and as fairly as possible, while recognising that because of the circumstances involved, no country will ever be able to introduce a scheme that satisfies everyone concerned. As I said at the beginning, 210,000 people depend on the child support scheme to provide financial support—210,000 New Zealand children. They did not choose their circumstances, but they have to live with them. The changes that this bill is about introducing are to make the support that they get through the child support system more certain and more regular, by making the scheme a fairer and a better one. I am very proud and happy to commend the Child Support Amendment Bill to the House.
Dr DAVID CLARK (Labour—Dunedin North)
: I rise to speak to the first reading of this Government bill in the name of the Hon Peter Dunne, the Child Support Amendment Bill. Labour will support this bill to the Social Services Committee because we believe that those who are going to be affected by it, should it pass, should have their say. As Mr Dunne has said, 210,000 children in New Zealand are affected by the legislation currently. Labour believes that decisions in this area should be guided by the principles of fairness and opportunity. These children, who did not choose their particular circumstances, should have opportunity and fairness as much as any other child.
The bill amends the child support scheme that was introduced in 1992, and concerns those who provide financial support to these children by making provisions for a new child support calculation formula and some secondary changes to update the child support scheme more generally. It also amends the payment, penalties, and debt rules in a way that child support, including debt write-offs for parents with debts to the Crown, is amended.
The present provision in the Child Support Act is expanded in respect of the formula to refer to any carer of the child, who may be a parent or a non-parent, who is not living with a parent of the child in a marriage, civil union, or de facto relationship. This is an important change, as some currently do not qualify for the support. It also recognises that shared-care arrangements have changed through the years, and the bill proposes a 28 percent threshold for recognising shared care; that amounts to 2 days of care per week. The new section 16 inserted by the bill relates to this. It is the Commissioner of Inland Revenue who must determine the care cost percentages of every carer under the
proposed legislation. The changes that provide for a wider recognition of shared care are things that should be looked at in the select committee. It is true that the devil will be in the detail. The adequacy or inadequacy of the provisions will be highlighted, I am sure, by interested parties.
Labour acknowledges the bill as a sincere attempt to wrestle with the realities of modern parenting. Labour is concerned about the effects on families and particularly any perception that this bill would absolve us all from supporting children in vulnerable circumstances. Labour will therefore support the bill to the select committee to give those who are affected by the legislation an opportunity to have their say. We do agree that the current legislation is out of date, and any MP in this House who does electorate work will be able to tell stories in relation to cases they have heard where it seems that unfair treatment has been meted out. Of course, these are difficult decisions, and no bill can ever account for every circumstance. It is hoped that the majority of these things can be sorted out privately, and that this Act in its updated form, should the bill go through, will be a backstop.
For many parents living apart, parental responsibility is shared these days and both remain active in their children’s lives. Work participation rates have increased since the Act was originally derived, so it is now more likely that the principal carer of the child is also working. As I have mentioned, there are some parents who act as caregivers who have arrangements that do not qualify under the present formula. This should be addressed. Many parents have concerns about non-payment or delayed payment of child support, and this bill hopes to address that.
There are other concerns that we imagine will come to light in the select committee, which include the effect on women. There are groups that have submitted, I think, in the early consultation that have drawn attention to the fact that women are likely to be affected in a negative way by these changes as they are currently proposed. This is something that Labour would like to see addressed if the bill is to move further through the process. I am sure my colleague Jacinda Ardern will speak to that point when she gets up to speak to the bill shortly.
It is also true that it was over 3 years ago that the Hon Peter Dunne said that he was going to complete a review of the child support system within 6 months. This side of the House wonders what other priorities the Government has had that has meant this bill has been shuffled down the Order Paper.
It is this wider context that concerns us also. What we see from this side of the House is a background of cuts. We see that real funding in the health sector has dropped under the National Government, we see that the early childhood education sector has faced cuts to the 20 free hours scheme that Labour introduced, and we see allowances for ongoing education being cut. Against this background, changes to child support may affect parents in a way that is of great concern, and should be of great concern, to New Zealanders. We are mindful of those changes that have happened, and they will no doubt inform the submissions that we will hear in the select committee as we make our minds up about whether these changes are fair and the optimal way of amending this legislation to give a fair go and to give fairness and opportunity to those children affected by this bill.
Since National took office the child support debt has ballooned and currently stands at over $2 billion, of which $1.6 billion is penalty payments. It is clear that the current scheme is not working. It is interesting to note that on this matter it seems the National Government has had a change of heart. The last amendment to child support legislation, in 2006, which allowed for debt write-downs, was supported by all parties in the House except National. On this matter it appears that National is swallowing a dead rat. The problem of debt must be sheeted back, because it was National that devised the scheme
with the penalty payments that we currently have. It opposed those changes previously. They are there, and they are the cause of concern. It is good that those payments are being addressed in the bill.
The bill allows for further write-off of child support debt under certain circumstances. As I said, it is interesting that the Government supports that, because National in Opposition opposed any moves to reduce child support debt. Most debt is attributable to these penalties, as I have said. In 2005, it is interesting to note, Judith Collins said that “Writing off debt sends the worst possible message to absent liable parents. The Government is telling them that if they dodge their responsibilities for long enough they will get a discount. That is the wrong message to send. Those who do the right thing and pay their way will be left wondering why they bothered. Our vulnerable children deserve better than a child support collection system that rewards debt dodgers.” It will be very interesting to hear the reasoning that has shifted that position. It seems that National now supports the debt write-downs. Once again, we see that Judith Collins’ tough talk in Opposition does not match her actions in Government.
As I draw to a close, I note that Labour will support the bill to the select committee because we do think that those who are affected should have their say. They had their say a long, long time ago when the bill was first mooted, when Mr Dunne went out consulting, but much water has passed under the bridge and that debt has subsequently ballooned. We look forward to hearing that fairness and opportunity will be preserved against that background of cuts to vital services. The devil will be in the detail and I have no doubt that we will have many submissions of high quality on the adequacy of the amounts proposed in new schedule 2, “Expenditure on children”, and also in the formula in new section 29 for assessing the annual amount of child support.
Labour supports the bill to select committee and we look forward to hearing from submitters who will be affected by this bill about the adequacy of its provisions. Thank you.
Peseta SAM LOTU-IIGA (National—Maungakiekie)
: It is a privilege for me to speak in support of this bill, the Child Support Amendment Bill, and I thank the Minister of Revenue, who has just left the Chamber, for what is another sensible piece of legislation introduced to this House.
One of the Government’s key social policy objectives is to ensure that all New Zealanders have an equal opportunity in society, and this bill reinforces that objective because it includes a safety net through the benefit system for those who are unable, for whatever reason, to look after themselves financially. This bill follows the great work that this Government has already done in the area of welfare reforms and in the area of the green paper consultation around vulnerable children. This bill supports again the welfare of children in our country, because they are the future, and they are certainly part of what is important in New Zealand society today.
In the context of child support this means that child support payments are collected and they are delivered for the benefit of those children they are intended for, and that parents, through whatever disagreements or whatever separations occur, do not pass those responsibilities on to the rest of society. So as a member of the party of personal responsibility and the party that supports people taking responsibility for their own actions, I say that this bill supports the ethos that people should be responsible and take the consequences for their actions. That is why parents can be liable for child support, even when the custodial parent receives a State-provided benefit.
As has already been stated by the previous two speakers, we see these issues in our electorate offices constantly, throughout our time here at Parliament. They are often heart-wrenching cases where inequity and unfairness pervade the child support system. People have strong views on child support, and with good reason, because children and
the welfare of children often need to fit in with their busy lives, as has already been demonstrated.
But child support needs to fit in with the realities of parenting and raising and supporting children today. This amending legislation amends the core Child Support Act from 20 years ago, and in many respects New Zealand has moved on. In many respects our society has changed. That is why the changes that have been promulgated in this bill are actually consistent with the changes that are reflected in our society, and that is why I certainly support these changes.
The bill will affect over 200,000 children—200,000 children who need support—and although our society changes, the needs of our children do not change. The needs of our children—to be educated, to be clothed, and to be loved and cared for—do not change, and this bill supports the need to provide for those children who are certainly in need. Today, of course, frequently both parents are working, childcare arrangements can be quite complex depending on the child concerned, and these arrangements need to be fluid, and they need to be flexible to respond to the changing needs of our society.
As the Minister has already pointed out, there was extensive consultation. Consistent with the Government’s approach, in terms of its multi-agency approach to solving some of society’s more difficult problems, a range of Government departments have been involved in this consultation, from the Ministry of Social Development, of course, to the Ministry of Justice, Ministry of Women’s Affairs, Treasury, and the Families Commission. So it has been a multi-pronged approach from Government in solving these issues. There has also been significant public consultation, as the Minister has referred to. Following the
Supporting children discussion document of 2010, we had over 2,000 participants in an online forum consultation that was discussing the issues relevant to this bill, and a further 112 written submissions.
The changes are really about a child support calculation formula that will take into account some of those issues that I have already alluded to around shared care, around the different income levels of both parents, and around the estimates for expenditure that have changed for children in New Zealand society today. This bill, firstly, modernises an Act that has been in place for 20 years, and that many in this House recognise is outdated and requires reform. Secondly, there are going to be changes to update the schemes in terms of taking into account other key factors, like recognising significant daytime care and relying on parenting orders and agreements.
I support this bill. I am glad that the Labour Party, the “Party of No”, is also supporting this bill, because the “Party of No” clearly is against jobs, clearly against opportunities, against mining, and against convention centres. I am just glad that it is supporting this bill in terms of the welfare of our children, which is paramount to many on this side of the House. I look forward to the select committee process, to hear submissions on what is a worthwhile and constructive bill.
JACINDA ARDERN (Labour)
: I welcome the opportunity to speak to this Child Support Amendment Bill. I resent being called the “Party of No”, given that we have offered to support this bill to select committee in order—with a heavy caveat—to allow wider debate and discussion from the public. I would hope then that the select committee process for this bill will be more robust than the last one, which went to select committee with a whopping 9 days for consideration.
Before I get into the detail of this bill, I want to speak a little bit to its context, because I think that when we are analysing bills such as this there is one simple lens that we should apply and that is, quite simply, whether the measures in this bill will be in the best interests of children. I think that when we apply that lens we see the world quite differently. But I want to come from the starting point, the environment that we are working within currently. I believe that some of the policy, some of the debates we have
seen in this House, and even some of the most recent welfare reforms, have not applied that lens to children. We have not been focusing heavily enough on children. If we were, we would be probably focusing a bit more on mothers.
Now, what do I mean by that? Bill English consistently comes into this House and talks about smoothing the sharp edges of recession. I want to add a counterstatement to that: women, and mothers in particular, are the shock absorbers of poverty and recession. Now, what do I mean by that? Well, unemployment currently in New Zealand is sitting at 6.7 percent. For women it is 7.1 percent, and we are at one of our highest rates since the 1990s. Women are overrepresented in statistics around joblessness and underemployment. They are overrepresented in our statistics around sole parents and particularly those in receipt of Government support; in fact, they represent over 80 percent of those reliant on Government support. In New Zealand, sole parents have one of the highest rates of unemployment in comparison with other OECD nations. By default, then, those women are more likely to live in poverty. When we are talking about living in poverty, in real terms that means things like eating less fruit and fewer vegetables, sharing bedding arrangements with children, postponing doctors’ visits for yourself in order to ensure your child can access the doctor, less heating, and poor-quality housing.
Women are the shock absorbers of the recession. Women are the shock absorbers of poverty. Why am I bringing that up in this current context? Well, a lot of the discussion that has been around parenting lately has been solely around women. Particularly when it comes to welfare reforms and the discussion about team parenting, the discussion about sole parents has predominately been about women on the domestic purposes benefit. I have two questions then, with that lens on, around children. Are we genuinely improving the situation for women in New Zealand through some of the changes we have seen proposed by this Government, or are we making it worse? Are we currently valuing the role of mothers in New Zealand, or are we playing up to preconceptions and negative stereotypes, and ultimately damaging the women who are caring for children in New Zealand?
And, finally, what about the dads? I am tired of having conversations, whether it be in the context of child support, the domestic purposes benefits, or welfare, where the assumption is that we should be talking solely about women. I do not believe in immaculate conception. Either the Government does or it is ignoring reality. I do want to add a caveat here. I am of course not talking about all fathers involved in a separation who do not have direct, full-time custody of their children. There are many out there who are working damned hard to do the best by their kids, even if they are not the constant custodian of them. I am not talking about them. But if the Government wants to have a real debate, let us talk about dads who have run away from their responsibilities, because this is not just about single mums who are still around. It is about the people who leave. If that was brought into the frame, this would be a genuine debate, but it has not been.
Let us be clear. Why am I talking about this group of women? It is because this bill will have a very heavy impact on parents who find themselves in a sole-parent situation where they are reliant on Government support. Why am I flagging that? Because Inland Revenue Department figures seem to suggest that a high proportion of the inland revenue payments being collected are held on to because another parent is receiving Government support. Let us look at some of those figures. As at 31 December 2011 there are 141,913 custodians registered with the Inland Revenue Department. So where the department was managing an arrangement—let us be clear that not all child support arrangements are registered with the Inland Revenue Department, which is what the Minister has talked about—83,189 of those cases are where payments have been
retained by the department for sole parents or unsupported child payments. Basically we can assume, therefore, that that might be the number of, in particular, women who are in receipt of a domestic purposes benefit where, for instance, the Inland Revenue Department is holding on to a child support contribution because the sole parent is on some form of Government support. By my calculation that could mean—and I acknowledge this is a very rough calculation—up to 30,000 sole parents who are not receiving any indirect support for the child they are caring for. To my mind we should be talking more about that figure in this debate.
There are a couple of other issues that I hope we will hear discussed in the select committee. The first is how we can encourage more parents to show accountability to their children, and responsibility, and whether this bill could have any role in that. There has been some discussion in overseas jurisdictions, for instance, about whether or not parents have a more direct involvement in the upbringing of their children if they are the non-custodial parent, if they are paying directly to the other parent. At the moment we have the Inland Revenue Department sitting there in the middle. Is that creating a disincentive and a lack of connection between the other parent and the custodian parent, and therefore a lack of accountability? I think it is a fair question for us to discuss at the select committee.
Secondly, what about our arrangements in terms of overseas payment? We have reciprocal agreements, which allow us to collect payments for some overseas jurisdictions, but we have already discussed in the select committee where those have fallen down, and whether they are adequate, in particular for Australia where a large part of our non-payment tends to reside. I think a discussion needs to be had over that.
But I come back to the bill itself, remembering our lens—that is, the lens of children—and secondly, also the role of mums. The Families Commission has said in the extensive work it has done in this area—and I know Rajen Prasad is likely to pick up on this in more detail—that the outcomes for parents who have arrangements outside of the Inland Revenue Department are generally found to be more satisfactory by both parents. That might be self-evident, because, for instance, payments tend to be higher when they are not enforced by the Inland Revenue Department or outside. For instance, there seems to be a difference of $433 per month, as a median payment, versus $241 for department-based payments.
Also, Inland Revenue Department arrangements tend to have less contact than those that are set up as private arrangements. At the select committee I would like us to have more discussion about why those Inland Revenue Department arrangements have such a high level of dissatisfaction for both parents. I want to hear from parents on that, and in particular I want to hear about those primary custodians, and I know that will mean, by and large, that we will be hearing from a lot of mums, but I want to hear from dads also. I want to hear about people’s views of the per-child payment decreasing once we go beyond a multiple of one, which is something that David Clark has raised with me, and whether or not this is fair. Can we assume strict economies of scale when it comes to the distinct needs of children? I want to hear from parents on that.
Overall, though, we need to keep in mind that although care arrangements may have changed in the modern day, actually when it comes to working arrangements, particularly for sole parents, they have got worse. We cannot assume that because a sole parent has, for instance, 60 percent of the care arrangements and the care responsibilities they are then able to automatically top up their 40 percent of remaining time with an appropriately flexible part-time job. That is not realistic. We must look at the realities, and I look forward to hearing from the public on this bill.
HOLLY WALKER (Green)
: It has not been easy for the Green Party to decide whether or not to support this bill, the Child Support Amendment Bill. This bill, in our
view, is somewhat like the proverbial curate’s egg: parts of it are good, and parts of it are bad. The Green Party has, on balance, decided to oppose this bill, although we acknowledge that some of the changes it makes to the child support regime have merit. I want to first address the things that we do like about the Child Support Amendment Bill.
It has long been a concern of the Green Party that it is all too easy for non-custodial parents to minimise their child support obligations, particularly if they are wealthy and they are therefore those who should, in fact, be paying the most to provide financial support for their children. The current child support arrangements permit such wealthy parents—and almost invariably we are talking about fathers in this category, who engage in this type of activity—to use complex arrangements involving companies and trusts to minimise their nominal income, and therefore their child support obligations. This bill will allow the child support agency to go behind many of these rorts and ensure that wealthy parents pay their true child support obligations, rather than using artificial devices to avoid them. To that extent, we commend this bill.
I also want to commend the bill for taking a more sensible approach to the penalty regime for the late payment of child support or non-payment of child support. The harsh penalty regime that currently operates when non-custodial parents do not meet their obligations ironically, actually, provides a strong disincentive for those who fall behind with their payments to re-engage with the system and the child support agency, and resume making their payments. So the Green Party is pleased that this bill introduces greater flexibility to the penalty regime. This will make it more likely that those who are in default actually re-engage, and re-engage earlier, with the child support system.
I turn now to the aspects of the bill that the Green Party has concerns about, and the reasons, on balance, why we have decided not to support this bill. The bill will reduce the child support liability of parents who are not the primary caregivers. This includes both those who have their children living with them for 2 or more days a week and those who have started new families. Currently, non-custodial parents must have the child or children 40 percent of the nights in a year in order to qualify for a reduction in the amount of support they must pay. Under this bill, that will drop to just 28 percent of the nights in a year. This means, for example, that a father with two children who currently contributes $7,400 a year to the mother’s expenses in caring for the children, and who has his children for on average 2 nights a week, which is a fairly standard example, under this bill would have to pay only $2,600 a year. That is a massive reduction of 64 percent in his child support liability.
There seems to be an assumption in this bill that shared care is always a good thing, and that the child support regime should be geared towards encouraging such arrangements. I wish to challenge that assumption. Shared care is clearly not always in the best interest of the children, and it is the best interest of the children that we should have in mind at all times. Where one parent is violent or otherwise abusive, shared care is not in the interest of those children. Nor is shared care in the best interest of children if it impacts negatively on the financial stability of their family. I fear that this bill will incentivise separated parents to enter into shared-care arrangements not because it is in the best interest of the children but because one parent—and this will usually be the father—sees the arrangement as a means of minimising child support liability.
I do wonder to what extent some aspects of this bill that appear to be really designed to placate non-custodial parents have been influenced by the very vocal and grumpy fathers groups out there on the fringes. I think they are epitomised by the notorious self-styled dad4justice in the blogosphere, whom members may be familiar with. These are the fathers who view their children effectively as their chattels, and they have made it very clear through their actions that their motivations are not what is in the best interest
of their children but their own self-perceived rights, including the minimising of their child support obligations.
The Green Party also has concerns that this bill appears to assume that if a non-custodial parent re-partners or moves in with a new partner, that new partner is a dependant for the purposes of child support, and a reduction in the non-custodial parent’s child support liability consequently occurs. That seems to provide another loophole in a child support regime that is already riddled with loopholes that allow non-custodial parents to minimise their financial responsibility for their children.
I acknowledge that no formula-based child support system is ever going to be totally fair, and the Green Party’s response to this bill has very much been one of balancing up the competing priorities. However, we believe that the test in this instance, and we have heard this from other speakers, should be what is in the best interest of the children. On balance, this bill, because it opens as many loopholes as it closes in terms of ensuring that non-custodial parents take the appropriate level of financial responsibility for their children, appears to fail that test. The Green Party had hoped that the Government’s review of child support would look afresh at the whole basis for the child support regime afresh. The fundamental principles for a child support regime should be the primacy of the well-being of our nation’s children and New Zealand’s commitment to the United Nations Convention on the Rights of the Child. Instead, this bill has resulted from a review that has involved little more, I fear, than tinkering around the edges of the child support regime, and, I fear, listening most closely to those who have made the most noise. Although it has some elements that the Green Party supports, we cannot support this bill as a whole, and we will not be voting to send it to the select committee.
MELISSA LEE (National)
: It is a disappointment that the Green Party does not actually support the Child Support Amendment Bill, because I thought that party was actually concerned about the welfare of children. However, I am very glad that the Labour Party supports this, because we will actually debate this issue in the Social Services Committee and hear from submitters, and that will be a good opportunity to see where the country is actually at.
It is a great pleasure to rise in support of the first reading of the Child Support Amendment Bill, introduced by Minister Dunne into the House. The New Zealand child support scheme provides financial support for more than 210,000 children in this country. Many parents do reach private agreement on how they are going to split their financial and care responsibility for their children, and I am one of those people. I am a sole mother, I am a divorcee, and I have come to an agreement with my ex-husband on how we were looking after my child, and how we were going to be taking responsibility both financially and in terms of the care of my son.
There are many who cannot come to this kind of agreement, and that is when the child support scheme kicks in. The scheme was created back in 1992 to provide a backup. A lot of people have talked about this as a backup for those who cannot agree on how the financial and care responsibilities are shared among the parents and how to support their children in the best possible way. It also applies when the recipient of that support is on a benefit, which is a Government payment, and so it should be—rightly so. This is because the primary assumption is that the paying parent is, in fact, the sole income earner—and in the past it has been so—and that the receiving parent is the main care provider for the child.
As you know, society has actually changed, and the main care provider is not necessarily just the mother. Often it is the father who actually stays at home with the child, so we need to hear from the men who are the sole carers for the children as well. I think it would be a very, very interesting select committee to hear from the people who are in that particular situation. It is really wrong to assume as well, because there will be
a lot of fathers out there who are, in fact, in that situation, and they will want to make sure that the system is fair to them as well.
For the majority of parents the current scheme actually works, as it is a straightforward way of calculating liability. But there are concerns that the scheme is out of date, as other speakers have mentioned earlier. Many parents have an agreement to share the care, as I said, and the cost for their children, but often the arrangements do not qualify as shared care for the purposes of the current child support formula. The current payment liabilities do not accurately reflect the true expenditure involved in raising children in New Zealand. The changes in this amendment bill are to allay these concerns, to make the system fairer and more transparent. The calculation for child support payments will take a wider range of individual circumstances into consideration.
Perhaps I should have actually considered that my child was going to grow up and was going to eat me out of home and house when we agreed on a financial agreement between my husband and me. Teenagers’ needs are quite different to those of a child who is in nappies. I am very pleased that the new amendment takes into account that the costs for a young child are quite different to the amounts needed for teenagers who are in our home, who actually eat you out of home and house. The bill also includes changes to rules on payments for child support, penalties, and writing off of penalties.
I would like to talk about some of the changes. The basic summary of the changes in this amendment will be based on the following three factors. First, there is a wider recognition of shared care. Because both parents are often working, I think it is unfair to assume that only one parent is solely in charge. Shared care needs to be recognised. Sometimes parents do know what is best and they do care for their children. When we talk about the 28 percent threshold, that is 2 nights a week, and those parents who do care for children 2 nights a week should be recognised as well, instead of only those who reach the 40 percent threshold. The income of both parents will be considered, and the estimated average expenditure for raising children in New Zealand will be taken into consideration. The thing that I would like to talk about is the current formula. It recognises the threshold of 40 percent of nights, where if my child was to stay with his father for 40 percent of nights, that is recognised. But what if he was staying there for 2 nights a week? His father is taking responsibility and he is actually paying towards my son, so I think it would be unfair to assume that he is not. I think having that tiered threshold is very, very important, and I think it goes towards the fairness of this amendment bill.
The income component of the amendment takes into consideration whether a paying parent has other dependent children. Would it not be fantastic if we could pay as much as we could to every single child in our household? But often when you actually look at a parent who is liable, and who might—as, I think, Holly Walker said—go into a different relationship, then that person has a responsibility to the new partner and perhaps also to another child that that relationship creates. What kind of responsibility does that father or mother have? I would have hoped it was equal responsibility, but the thing is that person has only one income. I think we need to be fair and decide what is, in fact, the fair amount that the liable parent should pay towards the child they are liable for.
This is a good bill, and I look forward to the debates that we are going to have in the select committee. I look forward to the submissions from the public, especially from the parents who actually have the personal experience that they can bring to the select committee for us to consider. I commend this bill to the House.
ANDREW WILLIAMS (NZ First)
: I rise on behalf of New Zealand First to speak to the Child Support Amendment Bill. New Zealand First will support this bill going to
the Social Services Committee. We support many aspects of this bill. However, we do have reservations about other aspects of it.
The existing New Zealand child support scheme helps to provide financial support for over 210,000 children, as we have heard from other speakers. That scheme was established in 1992. As we all know, the scheme is needed when parents cannot mutually agree on the relative financial contributions to support their children. It is essential that the child support scheme operates as effectively as possible, in the best interests of the children involved. It is stated that the Child Support Amendment Bill is introduced with the intention of improving child support and making it fairer and more efficient. We certainly hope that that is the case. The bill, in itself, will revise the child support calculation formula to include greater recognition of shared care and the income of both parents. The bill will also update the scheme to take account of other key factors such as new estimates of expenditure for raising children today. The bill will improve the rules for payment, penalties, and debt.
Much has changed in New Zealand society since 1992. These days far more parents are both working, childcare arrangements are more extensive and varied, and a working week can be on any one of the 7 days of the week. It is perhaps considerably changed from the days of 1992 when this legislation was first introduced. However, we in New Zealand First do have some concerns, and these will need to be addressed at the select committee and during further readings in this House.
For instance, the current levels of shared care of a 40:60 percent split may vary as much as a 28:72 percent split. This appears to be an opportunistic lowering of these levels to decrease the financial input of the non-custodial parent. How has the 28 percent level been arrived at? We would like to know from the Minister of Revenue and from the officials as to how that particular figure was determined. It is not even a one- third to two-thirds split of the payments. In terms of the total income of both parents, if one parent earns more and is the custodial parent, does that directly affect the non-custodial parent’s financial responsibility to these children? If a non-custodial parent chooses to enter another relationship and have further children, does this lessen financial responsibility to their first family? Does this clause not disadvantage the custodial parent?
We are also concerned that various analysts have looked at this bill—for instance, I draw your attention to a recent article, dated 7 May, which was published by a tax specialist, Mr Terry Baucher. I apologise to Mr Baucher if I have mispronounced his name. He states: “Child support payments are collected and distributed by the IRD usually on a monthly basis. The problem is that the penalties for late payment of child support are very onerous, an initial 10% and then a further 2% per month on the outstanding amount (including penalties). According to the New Zealand Institute of Chartered Accountants the effective annual rate of late payment penalties is an eye-watering 36.8% in the first year of non-payment. It’s therefore quite easy to quickly run up large arrears through non-payment …”, as seems to have happened with many, many cases in this scheme.
Mr Baucher goes on to include a graph showing the top 10 largest debtors owing money to the child support scheme. Looking at this graph, all of these top 10 largest debtors started off with debts in the order of $25,000 to $50,000 - odd. Their debts, with the penalties and all the other fees that have been charged to them, have gone up to between $550,000 and $1.050 million—over a million dollars—on an original debt in the order of $25,000 to $50,000. Mr Baucher comments: “As can be seen the actual amount of child support owed by the ten largest debtors is maybe not even five per cent of the total owed. The rest is in penalties.” He further says: “at 30 June 2009 total child support outstanding was $1.56 billion including over a billion dollars of unpaid
penalties.”—over a billion dollars of unpaid penalties. “The IRD has so little confidence that it will collect these outstanding penalties that its bad debt provisions in respect of penalties were more than 99%.” So this Government is allowing the IRD to continue with over a billion dollars of debts against these child support schemes, with the prospect of 99 percent of them not being recoverable.
This, therefore, does cast a doubt over aspects of this scheme. It means that perhaps the figures do need to be recalculated. Perhaps the percentages are not necessarily correct and true as to what they should be in the end. Perhaps the debt levels and the penalties are too great and are too great a disincentive to try to get the funds back. Perhaps this scheme is a little bit like the student loan scheme where basically so much is being racked up and so much is unrecoverable by this Government that perhaps it is living on a false promise and a false hope of recovering much of this money. Perhaps it has to get back to the basics, and we have to make it fair and equitable for people to be able to pay off what is owed on these debts, rather than having fictitious amounts sitting there on the books, which the New Zealand Government has no opportunity to recover.
This situation also has had, in the past, the effect of driving people offshore, to run away from their debts. In particular, they go to Australia and other places, and further afield, to get away from their child maintenance debts. Again, a little bit like the student loan scheme, we seem to be very good in this country at sending people offshore, exporting our people who basically cannot afford to maintain their payments. Perhaps we have to be a bit more creative. Perhaps when this bill goes to the select committee this has to be investigated further. Perhaps there has to be more consideration given to a real solution to this problem and to coming up with some solutions to make it more affordable and more easily obtainable for those who owe these moneys to get on top of the situation they are in.
It was very sad that in recent weeks, as I understand from the news media, one individual in Australia took his own life as a result of being hounded in Australia for child payment debts he owed in New Zealand. He simply could not face the situation. It is very sad when it gets to that situation. Certainly, I hope the Social Services Committee will look at this bill closely, because we do want a fair and equitable scheme for all.
New Zealand First will support this bill going through to the Social Services Committee, but we will be certainly asking many questions in respect of it.
ALFRED NGARO (National)
: I am happy to take a call in support of the Child Support Amendment Bill going to the Social Services Committee, where it will receive equitable debate, as is the convention for fair, just, and robust discussion. Family breakups can be difficult and traumatic, and often it is the children who suffer the most. Financial instability following a breakup is all too common in our communities.
I, firstly, want to commend the Minister for ensuring that this bill has been strongly shaped by intensive consultation. Discussion on the Government’s
Supporting children discussion document ran through September and October last year, and there were nearly 2,300 submissions. There was a huge range of strongly held views, with submission themes including arguments for both the adequacy and the excessiveness of child support payments, about how they were calculated, and recognising shared care and the impact that a child support formula based on the income of both parents would have on the incentive for parents to work or increase their earnings. The strong views served only to confirm the view that the current child support regime is both outdated and sometimes unfair. The system focused too heavily on penalties and people were not coming forward to the Inland Revenue Department to make payments. So the debt sat at $2 billion, and 60 percent of that debt was from overdue penalty payments.
These proposed changes would see more flexibility in situations of hardship, and payments would, and could, be made through instalments. So what are the changes that are being introduced? There are changes to payment penalties and the write-off rules. The rules relating to payment, penalties, and write-off play an important role in encouraging parents to meet their child support obligations on time. Debt from unpaid child support is $2 billion, and 60 percent of the debt is from unpaid penalty payments. What happens is people get behind in their payments, and they incur interest and penalties. The figures get to be very huge, and they drop out of the system because it becomes just much too difficult.
The changes in the bill are aimed at better encouraging the facilitating parents to make timely payments of child support. The bill, firstly, allows for compulsory deductions of child support from the employment income of paying parents. It introduces a two-stage initial penalty, with the current full 10 percent being charged only if the debt remains unpaid after 7 days. It reduces the incremental monthly payment from 2 percent to 1 percent after a year of non-compliance complemented by intensive case management by the Inland Revenue Department. It relaxes the circumstances in which penalties can be written off, including where a paying parent enters into an instalment arrangement or is in such serious hardship that debt recovery is a demonstrably inefficient use of the department’s resources, or where only a low level of penalty debt is outstanding. Lastly, it allows the department to write off, on serious hardship grounds, assessed debt owed to the Crown in relation to a receiving carer who is a beneficiary.
These changes bring New Zealand into line with Australian policy. New Zealand has a mutual agreement with Australia for child support payment cases, and the law will make it easier to deal with unpaid child support. I stand in support of this amendment bill for its support for the children who are most at need. Thank you.
SUE MORONEY (Labour)
: It is an honour to stand and speak at the first reading of the Child Support Amendment Bill, which has been introduced by the Government. I just want to reflect at the outset that this is called the Child Support Amendment Bill, and I make it really clear that when Labour considers this bill, it will be children, and the effect and impact on children, that we will consider first and foremost. As we all know, the New Zealand Labour Party makes all of its policy decisions basing children at the heart of everything that we make decisions about in this regard. So when we listen to the Social Services Committee considerations, in the minds of the Labour Party members will be how this affects children first and foremost.
I think that is a really important element to introduce into this debate, and to make sure is strongly held in this debate, because, of course, it becomes an extremely emotive issue once we start talking about families—the breakup of families, and the way in which that all shakes down. I think many of us as MPs will have experienced having in our offices many very distraught members of families who have been through family breakups describing the very real and diverse impacts on them of things that have happened with the relationship breakdown. So I guess it is a little bit of a sad bill in that regard, in that to get to the point where we are talking about child support at all in this regard, we are considering the breakup of a relationship and the breakup of a family and how we actually deal with that.
I am sure that the Minister of Revenue, Peter Dunne, came face to face with this when he originally said that he was going to bring this bill forward within 6 months of going to people to find out what they thought about the child support system. He was going to review that and it was going to come back to Parliament within 6 months, and I am sure that what he found was that the issue is not as straightforward as it may seem. I
think that is also what this Parliament will find when we listen to the submissions coming forward at the select committee.
Labour’s view is that we are supporting—as many other parties have indicated during the course of this debate—this issue at the first reading. We will be listening and questioning very carefully the submitters as they come before the select committee to make sure that there are no unintended consequences from this piece of legislation, because there could so easily be unintended consequences. It is really important that this Parliament works together to get this right, because where we do not, those suffering are some of the most vulnerable people in our society, actually—children from a broken relationship, from a broken household, with all the members of that household trying to work out how they make this new situation work.
So if we do not get this right, if there are unintended consequences, sometimes the people whom that affects—the children in this relationship—will be the very people who are unable to come through the door of their MP’s office and explain to them why it is not going right for them. They will be the very people who will be unable to make a difference in policy terms. So we must take this very carefully and make sure that we get it right. I think the key to that is to ensure and encourage a lot of submissions from the very families that this bill will affect. Families in New Zealand are very diverse. We need to make sure that all the different types of family arrangements are brought before our select committee so that we can make sure that these arrangements are going to work for them.
I think that the objectives of this bill are very honourable. Yes, it is time that the Child Support Act was reviewed, because it is a number of years since it was introduced—in 1992, in fact—and the world has moved on since then. The current legislation is out of date, because it does assume that the paying parent is the sole income earner and that the receiving parent is the main care provider. For many parents living apart, parental responsibility is shared and both remain active in the children’s lives. But I think we need to make sure that all of our legislation, actually, is up to date with the current situations that families face. And, yes, I will take the opportunity to make a link between this bill and the bill that I have introduced to Parliament to extend paid parental leave to 6 months, because I think there is a very strong connection in terms of making sure that families are well supported. It would be really good to see the Government supporting working families in the same way that it is prepared to look at this bill to improve child support.
So I will take the opportunity to make a plea to the Government members opposite, primarily the National members, to take a very good look at their current position on using a financial veto to ensure that hard-working families do not get the sort of support that they need with extending paid parental leave to 6 months. That will be very much a factor for the very families that we are considering here in this bill before us with regard to child support, because, of course, the children of many of these families suddenly find themselves in families in a household where there is one parent now providing the income. In the event of a new baby being in that household—and, yes, that does happen. I think members opposite are concerned that that would happen, that there would be a relationship breakup and then a baby would arrive. Well, actually, guess what? In the real world, that does happen. Those families in that sole parent income earning situation are going to need as much time as they can to bond with that new baby, particularly in the situation where there has been a recent relationship breakup. So all of these pieces of legislation are connected, and I think that if the Government is serious about being concerned about this group of families we are addressing here today—families where there has been a relationship breakdown—then it will think seriously about supporting the extension to paid parental leave as well.
Coming back to the purpose of this bill, the scheme was originally introduced in 1992, and it does provide financial support for 210,000 children. I think it is important that we remember that number, because each of those children will have had a different experience, and each of those children will have different arrangements between their parents. Maybe the non-custodial parent is nearby and there can be a shared-care arrangement, but maybe they are far away and that situation is just not going to work.
So there are a lot of complexities in how this might shake down, but the primary concern for the Labour Party will be what the impact is on the children. I think it would be really easy, in debating this bill, to focus on fairness and equity for the parents, and what is equitable for the parents in their new relationships, or what is equitable for the parents in terms of their desires in the situation. For the New Zealand Labour Party, we are firmly focused on what is going to be in the best interests of the children. And that may not be, actually, the liable parent paying less. That might not turn out to be the answer to that question, but that is the question that the New Zealand Labour Party will be asking itself as we listen to those submissions.
In closing, my plea to people listening to this debate is that if you have a view on this bill, if you know of family members who will be impacted by this bill, please encourage them to have a look at the impact that this bill will have on them and to make a submission. I know that those submissions might be quite hard for people to make, because it is about talking about their personal experiences, but I believe that if we are going to get this right, we will need to have those personal stories, and we will need to have those case studies of families that this will affect so that we can make sure that we get it right.
I just want to reiterate that Labour does support this bill going to select committee. We will be ensuring, through our questions and through our considerations, that the interests of children will be best served by these amendments.
TIM MACINDOE (National—Hamilton West)
: I was pleased to hear Ms Moroney in her introductory comments describe the objectives of this bill, the Child Support Amendment Bill, as honourable, because they certainly are, and I welcome the fact that that has been reflected generally in the contributions of members to this point in our first reading debate.
The Hon Peter Dunne, speaking an hour or so ago, when he introduced this measure, noted that the children affected by this particular bill do not choose to be in the circumstances that they find themselves in—needing the protection of this bill. So it is very important that we respond to the needs of those children as fairly and as sensitively as we can. I therefore welcome the support that has already been indicated by Labour and New Zealand First speakers opposite, and I thank them for that. I am disappointed to hear that they will not be joined in their support of the measure by the Greens, but I am sure that we will work through the submissions that we receive during the select committee process, and I hope the outcome will be definitely an improvement in this vital area of law.
The chair of the Social Services Committee, Sam Lotu-Iiga, when speaking in the debate, made the point that this bill builds on very important work that the Government has been doing in our time in office in the area of child welfare, such as the green paper on vulnerable children, and the welfare reform legislation measures to encourage teen parents to learn parenting and budgeting skills, and so on.
As with the extensive public consultation that was undertaken on the green paper, the Government undertook significant public consultation on this measure to update the child support scheme, including issuing a discussion document. The submissions on that document reflected the Government’s indication of the need to provide a safety net through the benefit system for those who are unable for various reasons to support
themselves financially. In the context of child support, this means that child support payments are collected and delivered for the benefit of the children for whom they are intended, and that parents do not pass their financial responsibilities to maintain their children on to other members of society. We all are constantly picking up the tab for many, many children in that position. We want to see those children given all the support that they need and deserve, but we also want to ensure that the system is fair to all taxpayers, and that others are not unfairly burdened by the refusal of some to meet their obligations, when in fact they could.
The child support scheme is intended as a backup when parents are unable to make satisfactory private arrangements for the financial support of their children. Fortunately, in many, many instances this backup is not needed, but it is sobering to realise that it currently helps provide financial support to about 210,000 New Zealand children—210,000.
It is 20 years since the Bolger National Government introduced the scheme, and, as has been observed by previous speakers, much has changed in our society in the intervening two decades. So the amendment is now appropriate. This updated bill has been strongly shaped, as I said, by extensive consultation. That consultation has been with a wide range of Government agencies, whose input is obviously critical, but there has also been significant public consultation on the various options that are available to us for child support reform. The level of interest in this particular issue is illustrated by the fact that there were 2,272 participants in the online consultation, and a further 112 written submissions on it. That, in my experience in this House, is a very high level of contribution, of submissions. I thank everybody who made a submission on it. As I say, their concerns, broadly speaking, underline the importance that the Government is bringing to this measure, and show their support for the changes that are proposed in the bill.
Those changes fall broadly into three categories. There is a new child support calculation formula, which includes greater recognition of shared care and the income of both parents, and new estimates of expenditure for raising children in modern New Zealand society. There are further changes to update the scheme to take account of other key factors, such as making it easier to recognise significant daytime care, and relying on parenting orders and agreements, and there are improvements to the rules for payments, penalties, and debt. The new formula will provide a more equitable system of financial support in a variety of circumstances. It will better reflect many of the social and legal changes that have occurred since the introduction of the current scheme, such as the greater emphasis that is now placed on separated parents sharing the care of, and financial responsibility for, their children.
When I was a child the rate of separation was lower, but also the likelihood that a father would be actively involved in that care was probably lower. There was sort of a natural assumption that the mother would do it all, and the father would go off to work. Well, times have changed. We have moved on. I think it is a good thing that fathers in those circumstances are now in many cases more actively involved in their children’s care, but, sadly, the other side of that coin is that in many cases the fathers are nowhere to be seen. So it is about striking a balance.
My colleagues who have spoken before me have traversed some of the assumptions and implications underlying the new formula, so I am simply going to close with a couple of general observations. I look forward to working on this important bill in the energetic and mostly harmonious Social Services Committee when it is, presumably, referred to us.
The rules relating to payment, penalties, and the write-off of debts play an important role in encouraging liable parents to meet their child support obligations on time. As my
colleague Alfred Ngaro observed a few moments ago, debt from unpaid child support is currently $2 billion, and 60 percent of the debt is from overdue penalty payments. Typically, we are talking about liable parents who fall behind in their payments, then incur interest and penalties that, in many instances, see the figures grow massively out of their control, and they drop out of the system because they simply cannot cope with the burden that they find themselves expected to meet. The taxpayer picks up the tab, and in many cases the children suffer. The changes in the bill are aimed at better encouraging and facilitating parents to make timely payments of their child support. I am sure we all welcome that, and I commend the bill to the House, and look forward to seeing it pass through to being enacted.
The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Rajen Prasad, but before I do so can I inform the House that this is a split call. The member will get a bell with 1 minute remaining. Namaste.
Dr RAJEN PRASAD (Labour)
: Namaste, Mr Speaker, and thank you very much for that acknowledgement.
Just before I get into the content of my speech, there is something that the Minister of Revenue said in introducing this bill, the Child Support Amendment Bill, that I wanted to comment on. I do agree with him when he says that the child support system is a separate system from childcare, access issues, and other parenting issues. He is absolutely right, and those issues, when contest arises, are dealt with in the Family Court. However, there is a linkage. I have seen many cases where conflicts arise between parents who have separated that are linked to their child support arrangements. The child support arrangements themselves, because they have not been responsive to their contemporary situation, have caused a lot of conflict. That affects their parenting. That affects access. That affects the whole relationship. And, that, surely, must have a negative impact on the development of children themselves, and the life and happiness of a family. So there is a linkage between the child support system and how families live, and the stress that families can experience from time to time.
The converse, therefore, is true: a well-crafted child support system, which is operating well, does obviate all of those kinds of negative influences. What impacts on children growing up, what impacts on families being together, and what impacts on sole parents looking after their children, or single parents, is that all of the factors that impact on their needs, so to speak, are integrated. And when they are, the outcomes for those children are much more positive. In that sense, the child support system is an integral part of the life of single parents, or parents who are separated, where there is a dispute.
I am disappointed, of course, that the Greens have indicated that they might not support this bill because it does not go back to first principles. In a sense, I would ask whether this is the bill where we ought to go back to first principles about the interests of children. Children are always the centre of everything we do in this House, in a sense, but this bill is only one part of that, and that part needs fixing, and therefore perhaps in the select committee, as we go through that process, we will have the opportunity to consider what the parts are that need fixing.
It is a sad fact that contemporary life for many parents, and many families as such, means that for various reasons they are unable to be together. That is just the way it is. It is far too regular, and it is regular enough for the State to be intervening through programmes and policies of this nature that actually begin to make it, at least, workable. But there are many cases in which parents—and this would be the majority of cases—work it out for themselves. As our research at the Families Commission showed, when they do, the arrangements work quite well, and they are much more generous in terms of time, joint parenting, joint care of children, etc. They are able to fulfil their
obligations to their children and to their families, and continue to love them and live with them and really be good parents, so to speak.
But, sadly, this is not always possible, and when it is not possible conflicts arise, and this bill begins to address the situations in which those conflicts arise. The contemporary set-up is quite different. Today we have reconstituted families, we have dual career families, and families with different patterns of parenting. What this bill does is begin to design or redesign the child support system to address that. I know that under the old system some parents watched bed nights because that would affect the way in which money would transfer from one to the other.
Labour supports this bill quite strongly. I encourage the many, many fathers who have come to us, come to my office, spoken to us, saying “We are often marginalised. We often do not participate in the lives of our children.”, to have their say. Here is an opportunity for those fathers to turn up to the select committee to have their say, so that whatever needs to be done to resolve those problems will be done. So I look forward to the discussions in the select committee. I look forward to the submissions, and perhaps returning with a better bill.
JAN LOGIE (Green)
: As stated by my colleague Holly Walker, the Green Party will not be supporting the Child Support Amendment Bill. I will now just talk in a little bit more detail about some of our concerns, which relate, for me anyway, primarily to the context that child support operates within. Child support is undoubtedly an important issue for women and children in New Zealand. The most recent estimates are that around one in two mothers have spent some time as a sole parent by the time they reach 50, and that a third of children have lived with a sole mother for some time by the time they are 17.
According to the Families Commission research, we know that for many receiving parents the amount they receive is considered to be too little to meet the needs of their child. In 2009, 90 percent of sole parent families had incomes below the median household income for all households with or without children. This bill, sadly, although closing some loopholes, which will hopefully increase payments to some primary caregivers and their children, also opens others that will actually further reduce incomes to a significant number, and this, for us, is completely unacceptable. If child support payments reflected the high cost of child rearing, were paid regularly and frequently, and were in a context of acknowledging power dynamics in relationships, they could help to reduce child poverty. Sadly, this bill does not do that.
I will again just mention the decrease, as noted by my colleague Holly, for a father who currently might pay $7,400 per annum, who under this regime would be required to pay only $2,600 per annum—a massive reduction of 64 percent in child support liability. That is a reduction in child support going to that child. Reducing the threshold for time spent parenting also does not take into account that the primary financial burden for health care costs, education, uniform costs, sports activities, and extracurricular activities usually remains with the primary caregiver. A parent having the child for the weekend usually will not be responsible for those costs.
I also have to address in this speech that New Zealand fathers—and this is backed up by evidence—have a long history of not paying child support, paying too little, and paying erratically. This bill seems to support, in part at least, the view that child support should be less onerous because liable parents resent paying it. This rationale appears to have neglected the unavoidable fact that child support is for the support of the child, and that reducing payments will increase child poverty. The culture of avoiding paying child support needs to be challenged directly.
Again—and I am going to be a broken record in this House—this bill also ignores the context of domestic violence in this country. A women’s safety survey conducted in
1996 found that 70 percent of separated women had experienced some form of domestic violence. We know that our courts and custody are used as a tool of abuse. We have New Zealand research that shows that although custody applications based on assertions of parental rights appear to be accepted at face value by our courts, it is too well documented that Family Courts often treat applications concerned with violence, abuse, and coercive control with a degree of scepticism that is unwarranted, leaving children and their mothers in highly dangerous situations. Auckland University research has shown that women sometimes feel fearful and under pressure to agree to care arrangements that they do not believe are in their children’s best interests.
This bill, as it stands, increases the opportunity for abusive fathers to use the law against their ex-partner. I really would just say to Labour and National that if we are relying on the select committee process, we are not recognising the difficulty of speaking to that experience of abuse. It is much easier for the father to talk about his outrage than it is for a woman who has been a victim of violence. We would suggest at least that the review of the Family Court be responded to before this bill goes further.
MIKE SABIN (National—Northland)
: It is a pleasure to take a call on this first reading of the Child Support Amendment Bill. Can I firstly just apologise. I have recently arrived in the House, having come from a select committee, so I apologise if I retraverse some of the material already spoken to. However, as someone who has been a sole parent, I am very pleased to support this bill, and rather disappointed in the comments from the previous speaker, Jan Logie, on this bill.
I just want to reflect on some of the important components that this bill is really set to address. That is really the question of what the endgame actually is here, and that is ensuring that we have a fair child support system that reflects what New Zealand is now, as opposed to the introduction of the scheme back in 1992. I think it is fair to say that parents and the relationships of parents when they have separated are quite different from what they were back then.
It is sad to say that, unfortunately, many parents, when separated, do not fulfil their obligations with their children. I think to some extent it is a long bow to draw to suggest that the amount of child support that they are paying, or the fact that they are paying, is going to have any effect on how that money is ultimately used by the recipient. There are many other ways in which we need to be addressing this, in my view. The Child Support Act, I believe, has become a very blunt instrument. The formula itself provides for disproportionate variances that negatively impact, and in many ways actually create problems with, the relationship shared by parents who are genuinely trying to do their best.
This bill will address three important changes. I just want to reflect on those, as the last speaker for this first reading. The formula provides a greater recognition for shared care. I certainly was in a position as a solo father where care of my children probably did break the mould, to some extent, in terms of a father being a primary caregiver, and I think this is modern New Zealand. Although it is sad that many couples find themselves separated, it is a reality that has to be confronted and dealt with in a fair and constructive manner.
The formula also better recognises the amount of debt that has been amassed over some period of time—and previous speakers have alluded to it—of some $2 billion, 60 percent of which really amounts to penalties. So you get an unintended consequence in many regards, in my view, which is that parents will turn and run because of the implications of the penalties and the wall that they find themselves up against. I think it is very important that there has to be some reality in how that is addressed.
The formula, which to me is at the heart of the changes in this bill, is really looking at addressing the shared care and the threshold at which that shared arrangement can be
taken into account. The threshold shifting from 40 percent to 28 percent provides a much fairer and more level playing field, and encourages the involvement of both parents in the upkeep and the upbringing, and both the financial but also the parental responsibilities that they must have. It also takes into account the incomes of both parents in this equation. I think that is very important. Rather than just simply the scale of the input or amounts paid by one parent simply reflected in their own income and their increasing income, this gives, again, a much fairer representation of what it is to be a parent bringing up children in a separated household.
The other, third, important part of the formula, in my view, is that the formula uses a new scale of costs, which is more up to date with the costs of raising children and how those costs vary. It addresses the anomaly, in my view, that results from some parents whose income rises, creating a situation where there is more disposable income, and that is not necessarily reflected in the costs of bringing up that child.
I commend this bill to the House. It really is about getting a fairer system that will benefit the interests of both parents and children. It is more reflective of New Zealand today, and that can only mean better outcomes for both the parents in a challenging situation and their children. I encourage members to remember that endgame. It is about supporting better outcomes for these children. Thank you.
A party vote was called for on the question,
That the Child Support Amendment Bill be now read a first time.
||New Zealand National 59; New Zealand Labour 34; New Zealand First 8; Māori Party 3; ACT New Zealand 1; United Future 1.
||Green Party 14; Mana 1.
|Bill read a first time.
referred to the Social Services Committee.