Child Support Amendment Bill

Kia orana, Mr Speaker. I rise to take a call on the Child Support Amendment Bill in its second reading. What a dramatic speech we have just had from the “Prince of Ponsonby”, the member for the New Lynn electorate. I too have actually been out to New Lynn—

💬 Hon David Cunliffe: I raise a point of order, Mr Speaker. There is a well-known convention in the House that members must be addressed by their correct names. I would ask you to reflect upon that.

The ASSISTANT SPEAKER (H V Ross Robertson): No, the members can refer to members’ electorates, as well. If the member is the member for New Lynn, then he is quite—

💬 Hon David Cunliffe: I raise a point of order, Mr Speaker. I know you are from South Auckland, but Ponsonby is not in New Lynn.

The ASSISTANT SPEAKER (H V Ross Robertson): Oh, of course. Yes, the member is right. The member must refer either to the member’s name or to the electorate in which the member serves.

Thank you, Mr Speaker. I do withdraw the comment that he is the “Prince of Ponsonby”. He is—

The ASSISTANT SPEAKER (H V Ross Robertson): Order! [Interruption] Order! The member will be seated. The member has been here long enough now to know that he cannot refer back to a point of order. That is actually subverting the course and the jurisdiction of the Speaker of the House. The member will not do that.

Thank you, Mr Speaker. The dramatic speech that we actually had just a moment ago—just in regard to the consultation and engaging with the concerns and the care of children. If that honourable member had actually been part of the Social Services Committee, he would have known of the extensive consultation process that had taken place. There was a child support paper out in 2010, on which there were over 2,300 submissions—over 2,272 participants on online consultations and 112 written submissions. In fact, there was a wide range of extensive engagement with the Minister for Social Development, the Minister of Justice, the Minister of Women’s Affairs, the Families Commission, and Treasury. So the comment that we as a Government have not consulted is not true, at all.

But this bill, in its second reading—we know that people have strong views on child support—deals with the welfare of their children, and it needs to be a scheme that fits with the realities of parenting and raising and supporting children today. Comments were made about the issues of children and their concerns. Are we meeting their needs? Well, from a submitter—right from the horse’s mouth, right from the people who have this concern—this is what they said: “The system needs to be fair. Families need to be encouraged to sort things out for themselves and I believe government agencies need to keep out of these situations as much as possible as they are often very complex. I think the first option should always be for a private arrangement to be made (with guidelines available), and the child support system should only fall-back if an agreement by the parties can’t be reached.”

This process has been consultative. It has been extensive. We know the issues are very complex. There has been a number of submissions about the complexity. As a select committee, we have considered these and taken these into account, and we believe that the changes that have been made and that have been amended will adequately meet these needs. I commend this bill to the House.

This bill, the Child Support Amendment Bill, represents a missed opportunity to address the well-being of children in vulnerable families. We know that the last Labour Government lifted 130,000 children out of poverty with Working for Families. We know that it can be done, and we know that it is a priority for the Labour Party and for several parties in this House. Unfortunately, it seems to be a very low priority, if any priority at all, for this National Government, and that is a tragedy.

That is a tragedy, because we heard in the Social Services Committee from many groups representing the interests of children that made it very clear that this legislation could be improved by referring to and referencing the United Nations Convention on the Rights of the Child. I moved a motion in the select committee to make sure that we considered the rights of the children so that the legislation would be targeted toward the well-being of children, so that children would be its priority, and that was voted down by the Government members on that committee. I think that that is to their shame. A second motion was moved when there was concern raised about litigation potential if we referenced that legislation. We put it to the vote again as to whether we should take some legal advice and broaden the scope so that there was no room for legislative action, but equally we were referencing the desire to put children at the heart of the legislation. That too was voted down. So what we have here, unfortunately, is a piece of legislation that refuses to put children at the heart of it. That is ignoring directly submissions presented by the Auckland Coalition for the Safety for Women and Children, the Child Poverty Action Group, the Dunedin Community Law Centre, the Families Commission, the Human Rights Commission, the New Zealand Law Society, the Office of the Children’s Commissioner, the Equal Justice Project, and the Women’s Studies Association. Others referenced it too, but those are significant groups that raised concern about the welfare of children in New Zealand and the failure in this proposed legislation to deal with the rights and well-being of children. It is a missed opportunity by this Government.

Part of that missed opportunity lies in the way in which the legislation perpetrates the current practice. We know that roughly 25 percent of New Zealand’s children are being raised in poverty—25 percent of New Zealand’s children. The way in which the new payments will be calculated in this legislation perpetrates that same problem. It is based upon a redistribution in the current sense; officials have modelled the estimates of cost of raising a child on the status quo. That means we are missing an opportunity to make sure those most vulnerable children have the resources necessary to give them the opportunities that would raise them and their families in future out of poverty. It would break that chain, potentially, and this opportunity has been passed over. The Government was also advised on the benefits of a pass-on mechanism in the legislation, and it refused to take a position on it.

Overall, we know that this legislation will be bad for women. It will be bad for the taxpayer overall because the taxpayer picks up some additional bills, but it will also be bad for women as the burden of payment shifts on to those who do the majority of the caring. We know that the 28 percent threshold proposed in the bill will mean that costs will be shared between caregivers, but we do not think that represents a fair way of doing things under the current proposals, because those who look after kids for the weekend seldom are buying the school uniforms, seldom are paying the dental bills, seldom are paying the doctors’ bills, and so on. We know that those who are the majority caregivers, those who are the lead caregivers, pick up most of those costs. So apportioning costs directly on the basis of time spent will see the majority of caregivers worse off. We know that the majority of caregivers are women, so we know that this bill is likely to mean that those women who are struggling to raise children will struggle yet more when this legislation is passed.

We have concerns also in the Labour Party about the transparency of the proposed new formula. It is very hard for families to plan ahead in any circumstance. Life presents many challenges. But for those families that have separated, particularly in acrimonious circumstances, and have not been able to reach a voluntary agreement as to how they will share responsibilities and the costs associated with raising children, we find that they now will have to try to understand and try to wrestle with a very complex formula. Forward planning becomes a whole lot more difficult.

I saw that the Hon Peter Dunne was on the back foot on this issue. He began by saying at the start of his speech that you would not need a fancy accountant to work out the formula. Well, I contest that in fact an advanced degree in algebra might be helpful if the amount of time the select committee spent wrestling with this issue is anything to go by.

💬 Mike Sabin: You’ve got to consider the average IQ on the committee.

If we listen to what the officials said, and the 15 percent extra time, Mr Sabin, that they suggested would be required to train up their own staff and for them to carry out their business in future, we would see that the Inland Revenue Department is planning for this to be a much more complex piece of legislation to understand too. So where the Minister gets the idea that this will be transparent and simple to work with is anyone’s guess. The Inland Revenue Department reported that it was expecting a 15 percent increase in workload associated with administering an area that is already its most expensive product to administer on a per-person basis. So this new solution is going to take a whole lot more bureaucracy. And we would hope that if it was involving a whole lot more bureaucracy, it was actually going to deliver a better outcome. That is by no means clear. Women are worse off, children are not prioritised, and there is extra cost involved.

There are number of other little fish-hooks in this legislation. One, for example, is the burden that will be placed on employers, who are likely to receive requests for additional payments to be docked from the wages of employees who are not meeting payments. In principle, that sounds like it might be a fair thing. If employees are not meeting their obligations, then we in Labour believe that they should be encouraged to do so. However, we learnt—again, from officials—that no immediate plans are in place to inform people that this might be happening. We also understand that they have not consulted employers. Employers are going to be expected to administer additional payroll things. They are also going to be required to take care of specific personal information that they will have about their employees that, presumably, their employees had not shared with them, for some reason, cultural or otherwise. Then the employers are going to be expected to keep this information to themselves. If they do not, they may open themselves up to future litigation. As far as I am aware, employers have not asked for nor been consulted on these extra responsibilities that are being foisted upon them by the Government. It is a Government that seems determined to push more red tape on to business.

In addition to the administration costs the Inland Revenue Department is expecting, it is also expecting that the IT rebuild will cost somewhere in the vicinity of $100 million. This is to rebuild a system that is not currently working very well anyway. It is adding on to our current legacy system in the tax department. It has a plan, it tells us, to fix it some time in the next 5 years. We have heard no credible plan to see how it is going to do this. But the Government is saying that it is going to rebuild a little add-on to the system to make sure that it can run it. We have seen it fall over when it has tried to do this in similar circumstances with the student loan. It will have its fingers crossed that it is only $100 million. Then, if it introduces a new tax system eventually, a new IT system—if it gets around to updating our 20-year-old tax system one day—it will have to do it all over again. It is duplicated money. It is poor spending of taxpayers’ money to introduce a system that is not transparent, that disadvantages children, that makes them not the priority, that makes women worse off overall, and that has fish-hooks for employers.

Overall, this is bad legislation. It represents a lost opportunity to address the well-being of children and vulnerable families. This Government has had plenty of opportunity to ensure that the bill presents a fair way forward. It has failed to generate an outcome that is fair, transparent, and representative of taxpayer money. We think it could have done a whole lot better.

💬 Peseta Sam Lotu-Iiga: How?

It could have listened to the officials, it could have happily—the member asks how. It could have taken it back to the Minister, as was proposed in the committee, to broaden the purposes of the bill so that it actually took account of the welfare of children. That is what was put to the select committee and was voted down by the Government members, who did not want children at the centre of this legislation, who did not want children’s well-being at the centre of this legislation, and who do not seem to care about the 133,000 children dependent on this legislation working correctly.

Tēnā koe, Mr Speaker. The Green Party supports the objective of a fair, transparent child support scheme to provide financial support to children whose parents or caregivers cannot mutually agree on what financial contributions they will make to support their children—and that is the starting point for considering this legislation. However, we have had concerns about the fairness of this Child Support Amendment Bill and what it proposes since its introduction. We opposed it at the first reading for this reason, will continue to oppose it, and I am pleased to see that the Labour Party has now joined us in that opposition.

💬 Phil Twyford: We always follow the Greens.

I know, Mr Twyford. Nevertheless we did engage very constructively in the select committee process, because we wanted to see whether we could improve the legislation and ensure that it did achieve that goal of a fair, transparent system, and ensure that it did maximise the best interests of children. Although we were ultimately disappointed that the Social Services Committee did not take the opportunity to use the bill to improve the scheme in the best interests of children, I would none the less like to thank the chair and members of the committee and the advisers and staff for what was, I think, a very informative process.

Unfortunately, that process did not allay our concerns or improve the bill. Indeed, many of the very well-prepared submissions that we heard at the select committee from the likes of the Children’s Commissioner, the Families Commission, the Human Rights Commission, the New Zealand Law Society, and the Child Poverty Action Group, as well as many individuals and families submitting on their own circumstances, raised significant new areas of concern or ways that the bill could be improved, which have not been addressed by the select committee process. Chief amongst these, as we have heard from the previous speaker, David Clark, was the missed opportunity to use this amendment bill to enshrine the principle of child well-being as a core objective of the Child Support Act. This could easily have been done by inserting a clause requiring that the best interests of the child be paramount in the administration of the child support scheme, and that could have been easily inserted into the principal Act. It was ruled to be within the scope of the bill for the committee to consider this amendment, yet Government members blocked a request to write to the Minister of Revenue to request that this amendment be advanced, and they also blocked a request to seek further advice from officials on the point, which I think was a real shame. It was a great shame because inserting a clause like this would have helped New Zealand to meet our international obligations under the United Nations Convention on the Rights of the Child. It is timely that we should be considering this, because on 13 March New Zealand will mark 20 years since the ratification of the United Nations Convention on the Rights of the Child, yet here we are 20 years later passing up an opportunity to demonstrate our commitment to that important international agreement by enshrining the rights of the child in our child support scheme—and if you cannot enshrine the rights of the child in the child support scheme, I do wonder where we do enshrine them.

A commitment in the purposes of the Act to maximise the best interests of the child would, of course, therefore flow through to a number of other improvements elsewhere in the bill, which unfortunately have also been disregarded by Government members. At the committee we heard from a number of submitters, including Child Poverty Action Group and the Children’s Commissioner, that the child support scheme could play a much more significant role in reducing and eliminating child poverty in New Zealand, which is obviously a huge problem facing the country. The child support scheme could help with that, if it allowed for the pass-on of child support payments to parents who are reliant on benefits, and if it allowed for advanced payments to guarantee child support to receiving parents, even if the liable parents are late or behind in their payments.

It may not be widely understood by those not directly affected by the scheme that, at present, if the receiving parent is a beneficiary, any child support payments from the liable parent are retained by the Crown as a way of offsetting the cost of providing that benefit. This means that the money paid by the liable parent does not directly benefit their child in any way, despite the fact that the liable parent is making payments to support their children. The receiving parent has to survive and provide for their children on no more than they are entitled to through the State benefit system, which, as we know, is hardly adequate for the support of children. So this is a huge disincentive to liable parents to meet their child support obligations, as they know that their money will not directly benefit their child in any way.

In fact, there is ample international evidence that allowing child support payments to be passed on to parents who receive a benefit definitely and substantially improves the level of compliance amongst liable parents to meet their obligations. Those parents who have liabilities under child support at the moment think: “What’s the point of meeting my obligations and making my child support payments if I know they’re not even going to reach my child?”. There is significant evidence to suggest that if they knew it would benefit their children directly, they would be much more likely to comply with their obligations. Passing on child support payments to receiving parents who are reliant on benefits would also directly improve the lives of thousands of children, and it would help to relieve child poverty, because there is a significant correlation and crossover between the children of parents who are reliant on benefits and reliant on child support and those living in child poverty. Of course, it would encourage liable parents to meet their obligations. So we are very disappointed that the Government chose not to take this opportunity to improve the scheme by including that provision.

Similarly, having the State guarantee or advance child support payments to receiving parents, to ensure a stable regular income for those parents and their children, would greatly improve the lives of those children, and increase the financial stability of their family. After all, it is not the fault of children if the liable parent is late or behind with their child support payments. They have the same physical and emotional and practical needs that need to be met, and it is of considerable benefit to their receiving parent if they are able to budget accordingly and know that they have a guaranteed income from child support coming in at the same time every week. So, again, a State guarantee or advance of child support payments would have been a significant improvement on this bill, which was passed up.

So much for some of the missed opportunities to improve this bill at the select committee. I now want to move to some of the fundamental concerns with the bill as it was originally introduced that remain following the select committee process. The most fundamental of these is the complexity of the new child support formula that it introduces, and this is really at the heart of the bill and the most substantial change that it makes. Officials acknowledged to the select committee that the new child support formula in the bill is much, much more complicated than the formula it replaces, which is already reasonably complex and difficult for parents to understand. But the new formula introduces a large number of new variables that would make it very difficult, if not impossible, for the average parent to calculate their entitlements or liabilities without the assistance of an accountant—and I challenge the Minister of Revenue, the Hon Peter Dunne, when he says that it would be something that parents would not require any special support in order to be able to calculate. In fact, as we heard from the previous speaker, it is an incredibly complicated formula and will be incredibly difficult for parents to negotiate themselves. This complex formula detracts from the simplicity, the efficiency, and the transparency of the child support system, which was a point made by the Law Society in its submission. It is a fundamental tenet, I think, that parents should be able to easily understand their liabilities and entitlements, so that they can have confidence in the fairness of the child support scheme, and the new formula makes this incredibly difficult.

Not only that but it is so complicated that it will put the Inland Revenue Department’s already creaking and groaning IT system under considerable strain. We heard from officials that it will require fundamental changes to the administrative systems of the Inland Revenue Department in order to be able to implement the changes in this bill. In fact, so fundamental are those changes that we have had to delay by a year the introduction of this bill, so that the department can get its systems up to scratch to introduce this complex new formula. These changes that are required at the Inland Revenue Department are so fundamental that the costs of administering the new system have been estimated at $91 million, not including a $28 million contingency fund beyond that, yet with no discernible benefit for the children who are supposedly at the heart of this scheme—or would be, at least, if such an amendment was included in it. So that is a massive cost—an extra $100 million and a $28 million liability—that cannot, in our view, be justified, given the flaws in the new formula and its failure to maximise the fairness and promote the best interests of the child.

It is a complex formula and yet it is so flawed that it does not take into account the vital importance of the early years of a child’s life, from age zero to 3, and accord appropriate weight to the costs of having young children. It is a complex formula and yet it would result in a disproportionate impact on women, especially female sole parents. Figures provided to us at the committee suggest that almost 30,000 mothers could experience a reduction in their monthly child support as a result of this bill. In one worked example provided by officials, a sole parent with two children who spend 2 nights per week with the other parent would have their annual child support entitlement reduced by 36 percent, or more than $3,000.

So we in the Green Party cannot support a child support scheme that is so complex, that will pose a huge additional cost on the taxpayer, with no additional benefit for children, and that disproportionately hurts women and fails to alleviate child poverty. We will therefore continue to oppose this bill.

Ahn nyung ha se yo, Mr Speaker. Tēnā koutou. I would like to start off my contribution to the second reading of the Child Support Amendment Bill with a comment back to Holly—

💬 Hon Member: Who?

—Miss Holly Walker—who actually made a comment saying that there were people who said they would pay more if they were guaranteed that the money would go to the children. That is what individual agreements between parents are all about. This bill is not about parents who have individual agreements who can pay each other more money. They should pay it themselves. When two people get married and have a child, child support is probably the last thing on their mind, but when that marriage breaks up, the care of that child is divided between the two parents, and if the two parents cannot agree on an amicable financial management arrangement for the care of the child, the payment for the child, the child support, is actually the thing that kicks in.

This child support scheme was created back in 1992, and there are roughly 210,000 children who receive child support. Under the current child support scheme it is assumed that the paying parent is the sole income earner, but we all know that that is not so. The paying parent is not the sole income earner, and the receiving parent is not the only main carer of the child. There are many divorces. I am one of those persons who, having cared for my child in a shared custody situation, know very well that I am not the main income earner or the main child supporter, nor is my ex-husband. We share that care. This comprehensive, new child support formula will better reflect many of the social and legal changes that have occurred since the introduction of the current scheme.

The incomes of both parents will be taken into consideration in this bill, where the income of the parents, minus the living allowance for each parent, will be included in the formula, with the costs of raising children being apportioned according to each parent’s share of the total net income. The formula takes into account the age of the child as well. We all know that when children grow older—I am raising a child who is 14, and in the last year his food intake has increased astronomically. He eats me out of house and home. The cost of providing that food alone is humungous. I think he eats more than my mum and me put together. We all know how much raising a child actually costs.

Non-parent carers may be eligible to receive a proportion of child support payments if they provide at least 28 percent of the ongoing daily care. That may include a grandparent who might be raising that child, who might be looking after the child on behalf of parents who are divorced.

This is a good bill, and I recommend it to the House. I will look forward to the debate in the Committee stage.

Talofa lava. Manuia fa’afetai. The proposed changes to child support payments in the Child Support Amendment Bill indicate how outdated our current scheme is. We worry about what a child will become tomorrow, yet we forget that he or she is someone today. Our families face different challenges and circumstances from those that families faced in 1992. Our 21-year-old child support scheme no longer reflects the lives of our modern families, and may prove to be more futile than effective.

Questions have been raised surrounding the ambiguous definitions concerning parents and caregivers. Questions have also been raised on the percentage split for payments that are determined by how much time a parent or caregiver spends with the child. I am looking forward to receiving the Supplementary Order Paper that the Minister of Revenue alluded to earlier on today.

It is beneficial to see the bill attempting to ensure that we revitalise and construct a new structure for child support payments that is in tune with the present. A child support system is futile if it is unable to keep up with the times. The proposed changes will emphasise the importance of child rearing and should aim to provide appropriate and necessary policies. This will ensure that the needs of the child or children involved are firmly met, and that the caregivers are receiving the right amount of financial support. Full-time caregivers have an important role to play in raising their children. Financial constraints should be the least—the least—of their worries. It is our hope that this new formula will ensure that every child is afforded the right amount of financial assistance from both parents or caregivers, so that they may grow up in a happy household.

For far too long, far too often—[Interruption]—we see separated parents struggling to balance their lifestyles to the needs of their children or child. I can hear Peseta Sam Lotu-Iiga trying to make some comments, and I wish they were relevant. The primary parent or caregiver may have to work long hours just to make ends meet, or may not receive sufficient financial support from the other parent. It is our children—

💬 Paul Goldsmith: There’s no need to shout.

I need you to listen and hear what I am saying, Paul Goldsmith. It is our children who lose out at the end of the day. It is not my fault that I have been gifted with such a quality voice. The children are the ones who will be deprived of essential quality time with their parents. This amendment bill, Paul Goldsmith, enables the parents to receive or pay the right amount of support for their child or children, so that the responsibility is equally and fairly shared.

💬 Paul Goldsmith: That’s better.

I thought you might like that. Moreover, the proposed amendments reflect trends and patterns of life changes that New Zealand families currently face. The scheme should improve their lives and not become a burden. It is no surprise that families are working longer hours and probably working two jobs just to pay the bills and take care of their families. With the rising cost of living come longer hours away from children, just so parents may chase the buck. The amendment bill should take this into account, with greater emphasis on different living arrangements and circumstances. Not all families are unitary or fit one particular mould. Grandparents and other extended family members may be staying at home, looking after the child or children, if the primary parent is absent. Situations as such should be afforded some leniency, which is good to see in this bill. For the sake of keeping families together and not allowing more children to fall through the system, the child support system should ensure that if the other parent is unable to care for the children, for justifiable reasons, and the children are in the care of the grandparents, then the grandparents should be receiving sufficient support. It is one way of ensuring that their capacity to look after the children is not hindered or constrained by a lack of financial support.

Our children are our future, so we owe it to them and ourselves to ensure that their well-being is at the core of any policy that comes through the Social Services Committee. It will take time to assess whether or not the new scheme will be open to different living situations and arrangements, but the prospects look promising at this stage, I must say. The scheme should aim to align itself as closely as possible to the changes that are occurring in society and that directly affect our families. If it fails to do so, then it is our responsibility to ensure that it does, and we must find ways to implement new changes.

Parents have a responsibility to safeguard their child or children from harsh effects or neglect, and are also obligated to provide the best possible pathways for them. The bill should be effective in assisting parents who have primary care of their child, and treat parents or caregivers who are paying child support with added fairness. Child support ought to help parents, not punish one or the other. It should be a scheme that offers the right amount of assistance, equal to the amount of care they provide for the child. Simultaneously, it should also encourage parents to pay child support, not look for ways to dodge payments.

The obligations, incentives, and penalties attached to the new formula will make it easier and more desirable for parents to pay and receive child support. They will enable more attention to go towards raising children, rather than chasing up late payments or no payments at all. Parents will have more time to invest in making sure that their child is properly taken care of. This is the way it should be. Children should not have to be victimised by relationships breaking down, nor should they be neglected by one parent for fear of child support payments deterring them from spending time with their child. Instead, parents should be encouraged to be positive role models for their children. Every child deserves a happy home and a safe environment to live in.

Legislation we pass through this House is to determine a fair go for New Zealand’s future generations. Neil Postman was right in the 1982 introduction to The Disappearance of Childhood. He said: “Children are the living messages we send to a time we will not see.” Today’s children are tomorrow’s future. They deserve to be protected, for they will be the leaders—

💬 Peseta Sam Lotu-Iiga: That’s beautiful.

—of this nation in years to come. It is a beautiful quote for you to learn from, Sam Lotu-Iiga. It is time to stop procrastinating and to develop better solutions. After all, children find everything in nothing, whereas men find nothing in everything. New Zealand First supports this bill. Thank you.

It is a pleasure to take a call on the second reading of the Child Support Amendment Bill. I will just acknowledge the previous speaker, Le’aufa’amulia Asenati Lole-Taylor, and the select committee work that has gone on. It is fair to say that it has been a challenging bill to work on because of the complex and administrative nature of the bill. The Child Support Act itself commenced back in 1992. Is that right?

💬 Peseta Sam Lotu-Iiga: Yes.

I am just correcting my facts there.

There were some comments made by Opposition speakers about the disappointment they felt that this bill did not enshrine the notion of children being at the heart of this legislation, and that that was not explicitly stated in the legislation. The reason for that—and it was well traversed—was because it is implicit in this legislation that children are at the heart of what is essentially an administrative tool to ensure that, where separated parents cannot agree on childcare and payment arrangements, this can be achieved by way of legislation. That will never be an easy undertaking. I would submit that although there are indeed many complexities to this legislation and getting the formula right, it is first and foremost about administration, and it is dealing with human complexities, far more so than this formula could ever be. But at its heart it is about ensuring that parents can make arrangements that are in the best interests of their children. Sadly, there are many families who cannot make those arrangements in an amicable manner, and some 220,000 children are subject to child support arrangements.

This legislation really fundamentally drills down to some important changes that are occurring. I just want to briefly traverse those. Firstly, in relation to the formula and a greater recognition of shared care in modern New Zealand, we live in a dynamic environment now, where it seems that more than 50 percent of couples are separated, with children living in blended environments. Many of them succeed and do well in these environments, but this legislation needs to reflect that complexity. Secondly, we are updating the scheme to better recognise significant daytime care, because it is the case now that mothers and fathers have different care and working arrangements, and the involvement of fathers is increasing more as the years go on. I think that is a very positive thing and something that should be acknowledged: that fathers are playing a greater role in the upbringing of their children. The third thing is that it really looks at some improvements around payments, penalties, and debt. Two billion dollars worth of debt is accrued in the scheme, some 60 percent by way of penalties. Although there were the best of intentions in this legislation when it was first drafted, much time has moved on. Unfortunately, as we see, we often get anomalies that not only have a human cost, but also a financial cost to them. That is also being addressed in this bill.

I will briefly cover off and close on a point about the fact that this bill is setting about to be more equitable in terms of the thresholds of care and the shared-care arrangements, and lowering that threshold to 28 percent as opposed to 40 percent. I myself—having personally been in a situation where I was affected by this—think this is a very, very sound move. Also, it takes into account the actual expenditure involved in raising a child, although, as has already been canvassed, teenagers would have one spend considerable amounts of money on their—what do they call them—Androids and textbook-y Facebook things, and all those devices where you swipe your finger across and strange things happen. I am sure the Minister to my left could elaborate further on that one.

In closing, I just want to say that what this bill is setting out to achieve—and make no mistake about it, no one says that this is simple or that you will get the balance right for every single person. But it is about fairness, it is about reflecting New Zealand society today, and it is about better outcomes for parents who are ultimately struggling to reach amicable arrangements. First and foremost, what we should be doing in communities is to try to support the sorts of values that ensure that when things go wrong in relationships, those parents are working to make their own arrangements and to support the interests of their children. I am happy to commend this bill to the House. Thank you.

I am also pleased to speak on the second reading of this important bill, or rather, a bill that could have been much more important in its effects than what it is going to be. The title of the bill is the Child Support Amendment Bill, and the question has to be asked: does it actually support children in the way that modern society expects our children to be supported? The answer has to be no. I think that the last speaker, Mike Sabin, actually did confirm that the purpose of this bill was not child support. What the last speaker was saying was that it is really just a technical bill and that really it is about the technical transfer of moneys. Maybe that is the problem with how the Government members have seen this bill. This side of the House—ourselves, together with the Greens—will not support this bill, because we do not think the bill achieves the objectives it started off trying to achieve.

Those objectives are well worth reading. The bill was “To improve the fairness of the child support scheme”, and to reflect the social changes that are taking place in our society. On this side of the House, we do not think that it actually does improve the fairness of the scheme, when you look at it from the point of view of children. The second objective was “To promote the welfare of children, in particular by recognising that children are disadvantaged when child support is not paid,”. The point I am making here is that children will be more disadvantaged by this particular bill.

💬 Peseta Sam Lotu-Iiga: That’s not true.

The chair of the Social Services Committee does not accept that, but if the member wants to listen to the arguments, then I am sure the member will get there in terms of what the purpose of the bill is and what it does not achieve.

Child support through the Inland Revenue Department is usually an indication that the family has not been able to work it out, that couples have not been able to work out, that separating parents have not managed to arrive at any amicable arrangement. If they did, Melissa Lee is right, they would not have been part of this system. So it is right from the beginning that it is fraught with difficulties. The scheme was designed in 1991, so it is an old scheme. Although it has had amendments since then, it is still now trying to deliver to a very different set of circumstances amongst our families. The idea of the review and the promise of the review was something we supported, and it has been going on for some time. Our family form today is very different from what it was in 1971 and the family arrangements today are very, very different. We now have more blended families. We now have more reconstituted families. We now have families living in all kinds of different arrangements, and therefore those arrangements now require different systems for income and for support of children. Clearly, then, the arrangements the bill currently reflects are needing significant reform, and it is not surprising that it has taken some time to get there.

But the bill was also a major opportunity for the Government to address longstanding issues about children. Members from the Government side who have spoken about this have separated that out. Somehow it is simply a technical transfer of funds from one parent to the other in a formulaic way. Well, it is never that simple, and it is always more than that. It is no wonder that the arrangements around children, around child support, are some of the most difficult negotiations, filled with the angst and what have you that most of us are familiar with. I say that the Government has not taken the opportunity to also look at the life experiences of many of these children, and it could have done so with this particular bill. The provisions that this bill could have come up with are very similar to what exists in overseas jurisdictions. But there is this blank wall. There is a refusal to look at it in that particular way.

There are 270,000 children living in poverty in New Zealand, and 133,000 of those live in sole-parent families. Why is the Government so reluctant to address child poverty? By every indication over the past 4 years it is reluctant to do that. The Government is well aware of the impact of poverty on children and what it does. It essentially excludes them from society. It excludes those families and excludes those children. Although income maintenance is an important aspect of coming back into being included in society, when it comes to our most vulnerable this Government is not taking those opportunities. Somehow it is just too difficult, or ideologically it is opposed to it. It wants to keep the gap that exists between those who are well off and those who are strugglers. Here was an opportunity the Government did not take for itself.

The submitters on the bill were very, very thoughtful. One of the things they wondered about was that the effect of these changes will fall disproportionately on those who will be least able to withstand a reduction in income. The regulatory impact statement shows that there will be a reduction for quite a sizable number of families bringing up children. So there will be a reduction, and it falls disproportionately. It arises because of the formula of using 28 percent as the threshold. If you are providing 2 nights’ care out of seven, then you are entitled to a reduction. In fact the cost to the mum—assuming it is the mum—bringing up those children is no less. It does not go any less and yet they will have to manage their children on a reduced income. How does that work? How is it better? How does it not keep people in poverty, if you like, and in sub-optimal conditions as well? That is a major difficulty.

There were many of our major institutions—the Families Commission, the Children’s Commissioner—that suggested a pathway to addressing poverty through these particular provisions. It was the pass-on provisions. The pass-on provisions are simply that the income provided, the money provided by one parent, passes to the caring parent, and that immediately, in one stroke, I say to members opposite, would have addressed poverty for those 133,000 people, many of whom are in this particular group. That would have addressed that, but somehow the Government was reluctant to address child poverty questions. It did not want to look at it. It simply saw, as the last speaker said, this as a technical exercise. But when does a Government take responsibility for the most vulnerable in our society? It spends billions of dollars looking at the impact of poverty, and the impact on our children. It is happy to do that, whether it is in health, in housing, or in education etc. It is happy to test them in schools simply because they are not achieving in those schools. Yet when it comes to spending what in comparative terms is modest income, a modest amount of money to address that, it did not take this opportunity. There is no response. The Government, the members opposite, did not address that so far.

There are just so many things wrong with this particular bill that even though we support, like the Greens do, the object of this particular bill, to create a fairer system that supports children, this bill fails in its provisions. So for those reasons we will not be supporting this bill. Thank you.

It is a privilege for me to stand and speak on this second reading of the Child Support Amendment Bill. As chair of the Social Services Committee, which oversaw the work on this bill, may I thank the Minister of Revenue, Peter Dunne, for the hard work that he has put in and for the constructive assistance that he gave to our committee, and also our committee members. Although some here today are voting against the proposed legislation, like the previous speaker, Rajen Prasad, I think it would be fair to say that all members of our committee agreed that the current legislation on the books is outdated and that it required reform, and that is why this bill has come before the House.

One of the Government’s key social objectives is to ensure that New Zealanders have an equal opportunity to take part in, and contribute to, our society. That includes providing a safety net through which the benefit system is working for those who are unable, for various reasons, to support themselves. But this is not a welfare bill per se. This is a bill, as many have already alluded to this afternoon, that supports the calculation of payments between parents who, for whatever reason, have found themselves in circumstances where they are living apart and where they need to raise a child. Those are unfortunate circumstances, and we have all acknowledged that, but it is for the benefit of those children that the financial responsibilities are divided between the parents in a fair, in an equitable, and in a transparent manner. That is what this bill does. It does not provide for child poverty, as Mr Rajen Prasad has asked for, and it is not the silver bullet, as Mrs Lole-Taylor has suggested was required in this legislation, but it is a bill that provides for the upkeep and the maintenance of relationships, and, in particular, it is for our children to be looked after where those circumstances have broken down.

The contention by Mr Clark in his submission this afternoon that we take into account the United Nations Convention on the Rights of the Child is misplaced. It is misplaced because we cannot introduce a subjective test in the way that these calculations are performed in order to determine a payment between two parents. It cannot be done in a subjective manner. I think most people agree that an objective formula is the appropriate mechanism with which to allocate resources for a child. The way the formula has arisen, and the way it was conducted and has been researched—and we looked at the Australian legislation and the way that it approached this area of the law—we all felt resulted in the appropriate mechanism. To introduce another, subjective test to that calculation is inappropriate, in my view. In my view, it would complicate a simplified bill that has come to this House.

The Act is 21 years old, and what has already been acknowledged across this House is that circumstances have changed. We have numerous blended families now that are living in our country. This bill is a mechanism with which we can calculate the distribution of child support between parents, and it is efficient and transparent. The three changes in this bill are that the calculation formula recognises shared care, the income of both parents, and new estimates of expenditure for raising children in our country. We did look at the formulas. We looked at the way that expenditure was calculated, and I think that the amendments that we made to the bill are suitable and appropriate for our country in 2013 going forward. That does not mean, of course, that this necessarily futureproofs the bill in terms of maybe changing circumstances in the future, but, in my view, this bill is appropriate for 2013 going forward, in terms of the factors that we need to take into account. Secondary changes, of course, to update the scheme took into account key factors such as recognising significant daytime care and relying on parenting orders and agreements. Again, I say that those are matters that members across this House have agreed upon.

This bill cannot come soon enough. I have had a couple of cases in the last year where if this bill had been in place it would have led to a better outcome for the parents involved in those two situations. So I support this bill. I look forward to the Committee stage. Certainly, it is a bill that, in a very difficult area of the law, we can come together to decide upon an appropriate course going forward. Thank you.

I understand this is not a split call. Sue Moroney, 10 minutes.

It is a pleasure to rise and speak to the second reading of the Child Support Amendment Bill. The bill, as many other speakers have said in this debate, has been a long time coming. It is in fact more than 20 years since this issue was revisited. Of course, we all, right across the House, do recognise the need to review, particularly in situations like this, where family relationships are complex matters and do move and change as society evolves and changes. That, of course, is precisely what has happened in this situation. It is 21 years since the child support legislation was revisited. Things have changed. We all acknowledge—certainly, Labour voted for this legislation at its first reading because we wanted the opportunity to have a good, close look at it in the Social Services Committee—the need to update this legislation, but, sadly, in this instance we think that the Government has got it wrong. Actually, we think that the Government has got it wrong at a very fundamental level—not just in some of the fine detail, but actually at a very fundamental level. This piece of legislation that we are visiting here is called the Child Support Amendment Bill. It is about child support. It is Labour’s view that we would come up with a different set of conclusions in reviewing this legislation if the interests of the child were put solidly at the centre of every consideration that the Government and the select committee made about this piece of legislation.

I want to refer to the speech from the member who spoke immediately before me, Peseta Sam Lotu-Iiga, because I think he put it in a nutshell, actually. He said that he had dealt with two cases recently where the outcomes would have been better for the parents if this piece of legislation had already been enacted. He said the outcome would have been better for the parents. He had no comment to make about whether the outcome would have been better for the children or not. That is the basic mistake that the Government is making, because the whole point of this legislation is to ensure that, in situations where there is a family relationship breakdown, the children are taken care of. That is what this bill is about. It is not about serving the interests of the parents; it is first and foremost about serving the interests of the children. The National MP who just resumed his seat spelt it out loud and clear for us, I think, that the Government has got sidelined by getting involved in working out the whole thing about whether parents win or lose under this arrangement. That is where the Government has gone so badly wrong. This is not about the argy-bargy that goes on between parents. This legislation ought to be about putting children at the heart of it.

I am not a permanent member of the select committee that led this legislation, but I did have the opportunity to sit in on some of the deliberations and certainly some of the submissions during the course of the select committee deliberations on this bill. One of the days when I was present, there was a debate about some wording changes that Labour was proposing to ensure that in the objectives of this amendment bill there would be a statement about the interests of the child and making that central to this piece of legislation. I was alarmed that the National members on that select committee were opposed to that concept. That was an alarm bell that went off for me, because I could not understand why setting that out as a basic premise and objective for this amendment and this review would be opposed by Government members on that select committee. It seemed to me a very basic requirement that should be at the heart of this legislation. So it is not only that Government members have inadvertently overlooked this really fundamentally important part of this legislation; they deliberately opposed amending the objective of this piece of legislation to protecting the interests of children first and foremost.

I am Labour’s spokesperson on women’s affairs and I, of course, am interested in what the impacts of this change in legislation will be on women. The impacts, I am sad to report to this House, are not good. They are not favourable generally for women. As people have said, individual family situations can be quite different from each other, so there is by no means one silver bullet. But if we look across an average of what will happen in this legislation, and accept that, as it is still in New Zealand to this day, most of the parents who are the main carers of children in this situation will be women, and are in fact women—because that is what the statistics tell us—then we need to understand that there are gender implications with this legislation, as well. The legislation does have significant implications for women, because, on average, women earn less than men, and, as I have just said, they are much more likely to be the primary caregivers. The overall effect of this bill is to apportion an even greater share of the cost of child rearing to women. Many women will be worse off as a result of this legislation.

One of the main mechanisms for that effect is the reduced threshold for shared care. That reduced threshold for shared care actually puts in a financial incentive, mainly for fathers, who are the liable parent, not the custodial parent, in the main—not always, but in the main. It puts in a financial incentive for them to want to get involved in the care of their children because it will cost them less—it will actually cost them less.

💬 Paul Goldsmith: That sounds good.

Well, the member says that sounds good, but if the member was to put the interests of the child at the heart of that situation, would we really want fathers to get involved in shared care because there is a financial incentive for them to do so? Is that really what we want? I certainly do not think that is a good outcome. It is not a good outcome. The National MPs may think that is a good outcome, but I do not. I want shared-care arrangements to be genuine. I want them to be in the best interests of children. I do not want them to be based on some accounting book exercise that a father does to work out how he can pay less in liable contributions, because that is what this piece of legislation actually invites. If that was in the best interests of the child, I would be the first to agree to it. But actually putting a financial incentive there to try to increase shared care is not necessarily in the interests of the child.

What it does do, actually, is unfairly impact on women, because we know that parents caring for a child 2 days a week are unlikely to share a proportionate responsibility for providing the basics of life. So although they might share food bills proportionately because they have got the child or the children for 2 days of the week, they are really unlikely to be paying for the cost of school uniforms. They are quite unlikely to be sharing the proportionate costs of the clothing, doctors’ appointments, dental costs—all of those week-to-week, day-to-day expenses in providing for children. It is under this mechanism that we know that on average there will be a shift. There will be a further burden of costs shifted on to women, who are in the main the primary caregivers, by that mechanism.

My contention, and what I want to put before this House, is that we cannot afford to do that. That is why my colleagues have been talking about child poverty and its link to this bill. We already know that women who are sole parents are in this poverty trap and, therefore, their children for whom they have the primary caregiving role are in that poverty trap. That is the link with child poverty. It is not acceptable for this Government to be passing legislation that actually worsens child poverty when New Zealanders are calling out for it to do something about reducing poverty. I am pleased to say that Labour is opposing this bill because it is not necessarily in the best interests of children.

It is my pleasure to take a short call in favour of this bill, the Child Support Amendment Bill. I have not been fortunate enough to be a member of the Social Services Committee, which dealt with this bill, but, naturally, I have a great interest in its subject. I was shocked when reading the details here that apparently as kids get older they become more expensive. As a father of four relatively young kids, I think I am ruined. I cannot believe they could be more expensive than they are at the moment, but apparently it gets worse. That is very sobering reading.

What is it to be a good citizen in this country? I think the starting point surely must be looking after yourself and your family. That is the starting point of what it is to be a good citizen, and it is not optional; it is fundamental. It is a right that is appropriately asserted in legislation. Not everybody will be able to do it, but most can and most should, and that is what fundamentally we are all about as a civil society.

We have heard a lot about child poverty in relation to this bill. I read the report of the Children’s Commissioner’s Expert Advisory Group on Solutions to Child Poverty over the summer, and it was interesting to note that it made it clear that the group of children suffering the highest rates of poverty were those who live with an unemployed sole parent. But nowhere do we have the question asked, that fundamental question, of whether the welfare State that we have inherited is generating more or fewer sole parent households, and whether there is anything we can do about it. I think that is the broader question that we need to be dealing with, but it is not one that is particularly dealt with by this piece of legislation, which I want to draw a little bit more attention to—that is, the question of how we deal with those situations where parents are not able to agree on an arrangement for the care and maintenance of their children. In those cases, it is appropriate for the State to step in and set a basic set of ground rules, which we are reviewing after 21 years.

It makes eminent sense to me that we should be recognising the fact that fathers, on the whole, tend to be having more involvement in the raising of their children, which is a magnificent thing. And I think it is clearly in the interests of children to have a good, strong relationship with both of their parents where at all possible. That, in reality, does need to lead to having some recognition of that involvement in the regular shared-care arrangements. This bill, by reducing the starting point to 2 days a week looking after children, I think, reflects the changes of the times, and I support this bill on account of that. Thank you.