Child Support Amendment Bill (No 4)

I move, That the Child Support Amendment Bill (No 4) be now read a first time. I shall be recommending later that the bill be referred to the Social Services Committee for consideration. The fundamental principle behind the child support scheme is, and remains, that parents are financially responsible for their children. The main purpose of this bill is to increase the compliance of parents who, for whatever reason, are presently failing to meet that responsibility by not paying child support, because it is only by bringing non-payers back into the system that their children will receive the support they are entitled to. Having said that, any changes to the child support scheme must also take careful account of individual parents’ ability to meet their obligations, without wringing them out financially and at levels they cannot afford to pay. For that reason, this bill proposes a number of balanced solutions rather than a short-term, punitive approach to getting lapsed payers back into the system.

The first one of these solutions addresses one of the major obstacles to liable parents re-entering the child support system. I am referring to the penalties that quickly escalate as soon as a parent defaults on child support payments. Under the current child support penalty rules, a liable parent’s underlying child support arrears increase by 36.8 percent in the first year and by 28.8 percent in subsequent years. That means that within just 3 years the penalties owed exceed the child support payable. As at 30 September this year, the total child debt payable by liable parents was $427 million in child support arrears, but $584 million in penalties on those arrears. Total penalties have actually exceeded child support arrears since September 2001. This bill will provide limited relief to encourage lapsed parents to re-enter the system without punitive action being taken against them.

It proposes writing off debt penalties—not arrears—as an incentive for non-paying parents to reactivate their payments. But that arrangement will be subject to a number of conditions. When non-payers enter into an agreement with the Inland Revenue Department to make payments on their current liability and their arrears, the incremental penalties they have previously accrued will be written off at 6-monthly review points, but only if they keep to the agreement. That write-off will be based on a pro rata percentage of their core child support arrears, including the 10 percent penalties that have been paid. For liable parents who default on their payment agreement, there will be no write-off at the next review point. Instead, they will have to negotiate a new agreement with the department and comply with that before they again qualify for a write-off.

Because liable parents will not be able to have all their penalties written off, they will still be better off if they pay on time and do not incur penalties, at all. Liable parents who are already complying with the payment arrangement for paying off arrears, or who make regular deductions for their arrears, will also be eligible for the write-offs for payments they make from when the legislation comes into effect. For liable parents who owe penalty debt only, the department will have the discretion to take a case by case approach on whether a write-off should be allowed.

The incentives I have just mentioned are intended to encourage liable parents who have lapsed in their child support payments to reassume financial responsibility for their children’s welfare. The bill also introduces a complementary measure to counter the practice of those parents who deliberately structure their financial affairs to minimise the child support they should be paying. That measure will allow the department to initiate an investigation of liable parents’ financial affairs when it suspects they are paying less child support than they should be. If that investigation establishes that the liability for child support does not accurately reflect a parent’s ability to provide financial support, the department will be able to initiate an administrative review. At present, only the custodial parent can initiate such a review.

A further measure—the introduction of a new appeal right—will provide greater fairness between applicants and respondents following an administrative review. Under the current provisions, unsuccessful applicants can have their case reconsidered by the Family Court, but respondents who are dissatisfied with the results of an administrative review have recourse only through judicial review in the High Court. The new appeal right will allow respondents to also have their case reconsidered in the Family Court. These measures form the principle focus of this bill, but, in addition, it introduces two exemptions from liability for child support.

Under the current provisions, exemptions from paying child support are available to long-term hospital patients and prisoners. This bill will extend that recognition by providing a temporary exemption to young parents under the age of 16 and providing a permanent exemption to the victims of sex offences. The purpose of offering young people of compulsory school age temporary exemption from child support payments is simply to allow them to concentrate on furthering their own education for their long-term benefit and for that of their child. As such, it is a practical recognition of the consequences for young people who become liable for child support at an age when their attendance at school is compulsory. If, however, they undertake part-time or casual employment, they will be required to make a contribution towards the support of their child.

As I have said, the bill also introduces a permanent exemption from child support payments for the victims of sexual offences, and there are two likely scenarios for the application of this exemption. The first is where a male fathers a child as a result of sexual abuse by an older female. The second is where a female who, as a result of sexual abuse, gives birth to a child who is placed in foster care. Under current law, a mother in this latter situation would become liable for child support. Victims should not be further victimised by being required to pay child support for a child born as a result of a sexual crime. That is the thinking behind the new provision, which will permanently exempt these people from any child support obligations upon conviction of the offenders.

Finally, the bill introduces a number of minor remedial amendments of a pragmatic nature. They include a proposal to allow Inland Revenue to accept documentation such as birth certificates from other countries as proof of parentage for the purposes of establishing child support liability. When arrears of child support are collected, priority will be given to payments of child support owed to custodians for periods when they were not receiving a social security benefit over a payment owed to the Crown. The purpose of this change is again driven by the need to protect the welfare of children adversely affected by their parents’ financial actions.

These are the main features of the bill. They will work in tandem with new administrative measures designed to tighten the collection system, such as increased border enforcement. Taken together, the administrative changes and the proposals outlined in the bill make up a balanced package of incentives and controls to ensure that liable parents meet their obligations to their children. Quite simply, for those who do want to comply, we will ensure that they are able to. For those who will not meet their obligations, Inland Revenue will use its full powers for collecting outstanding child support under the existing legislation. The choice is clear and this strategy, together with the specific measures contained in the bill, will make the child support scheme work better for all who are involved in it. I commend the Child Support Amendment Bill (No 4) to the House.

Following on from the Minister’s speech, I can say that there is no greater obligation for any parent than the obligation to protect and look after his or her child. One of the points that the Minister has very correctly made is that, unfortunately, some people—mostly men, but some women—do not support their children financially. That is, of course, a form of child abuse. The same people contact members of Parliament like me and other members of this House and talk consistently about their rights of access, etc., to their children, but do not ever talk about their own responsibility to be financially obliged towards their children.

Some people think this matter is not very important, because they think that every parent who should be a liable parent is paying money to the Inland Revenue Department, which comes into the Government coffers. But, of course, that is not right. Certainly, many of those people are doing that—and I think this is a good opportunity to congratulate and thank the people who do meet their liable-parent contribution. Frankly, I think that those people are really good people and that we should thank them for doing that.

Unfortunately, as the Minister has said, there is over a billion dollars in arrears and penalties altogether, and this proposal has a certain amount of writing off of those arrears. I have some concerns about that. Those concerns are—and perhaps I can enunciate them quietly—that if anyone else owes money to the Inland Revenue Department, those people do not normally have their arrears written off. For instance, in the case of a mother who is not on the domestic purposes benefit, but who is working to look after her child and is, hopefully, receiving some money from the liable parent, nobody pays her arrears if she goes to pay for groceries at the supermarket and finds that there is no money in the account because the child’s father has not put the liable-parent contribution in, or that the liable parent has not paid the Inland Revenue Department, which has then not paid the mother. There is nothing to help that woman, who is shamed, humiliated, and unable to do anything much about it.

It is no wonder that sometimes mums and dads who are normally good and responsible mums and dads say things to their children that they should not say about the other parent. Sometimes they do point out that a parent who, for instance, has a significant farm, a significant property, or other things held in trust, is paying only the minimum rate of liable-parent contribution of around $11 a week. Sometimes mothers and fathers do get angry and say things that they should not say because, at the end of the day, they are only human. They are the ones who have to tell the children that they cannot go to the school ball, have the things they want, go on holiday while everyone is on holiday, or be part of the holiday programme at school because there is no money. The parent does not want to say: “No, because Dad is not paying up.”, or “Mum is not paying up.”

I have just about zip sympathy for parents who do not meet their obligations to their children, because I come from a family where that happened. I have also seen it happen in my generation, when one of my sisters was left in that situation. While she was working on the minimum wage, her former husband paid only the minimum amount, even though he had a farm—he still has farms—and properties. To me that is a disgusting state of affairs. Unfortunately, this bill will not necessarily deal very well with that situation.

I accept that the Minister of Revenue has taken over this bill from the former Minister, and I am sure that the current Minister would like to toughen it up. I hope that he will talk to the National Party members on the Social Services Committee about how that can be done, because I am sure we would be very happy to assist him.

A couple of things in this bill are good, and I think we should acknowledge them. One is the review that can be initiated by the Inland Revenue Department. I tell the House that where, for instance, a custodial mother or father is working in a full-time job, as many are, and is running around trying to look after one, two, or three kids and carting them to music lessons, school events, and everything else by themselves—many of us in this House have had that experience; fortunately, touch wood, I have not been in that situation, but one never knows because these things do happen to people—they do not have the time or the money to institute reviews. They do not have the time to deal with the Inland Revenue Department. They do not have the time to deal with those things and they need someone else to do it. I ask the Minister to please make sure that in his time as Minister of Revenue, he makes this matter a priority for the Inland Revenue Department, because the people in this situation are often those who work for minimum wages and who often do not have any spare time or cash. We must help those people.

Another good thing in this bill is the exemption for victims of sex abuse having to pay the liable-parent contribution. I was trying to work out just how this could happen, but I guess it could. A victim of rape could end up as a mother and perhaps have a family member or someone else look after the child, or even—hopefully not, but I suppose it could happen occasionally—the perpetrator of the rape themselves, although why one would want to put a child under the care of a rapist is beyond me. For instance, the mother could end up experiencing further abuse.

At the moment, unfortunately, the bill is not in a state where we think we can support it going to a select committee. We know, of course, that the Government will have the numbers to do it, otherwise it would not be putting it before the House as one of its first bills. So we will be very happy to work to try to toughen up the bill and make it better.

We would really like to look at the whole area of child support, which has, in many ways, become very much a cross-party issue. I do not think too many of us would want to make too much political capital out of the fact that some people do not pay for their own children, but we do want to see the Government take some steps so that people are not rewarded or, in fact, let off for not paying their obligations towards their children. I know of many people—as, I am sure, do other members of the House—who do, as liable parents, contribute in a huge way towards their children, not only in terms of the liable-parent contribution but also in terms of time, of not fighting with their former spouse or other parent, and of spending time and money on their children. Children eat money, particularly teenage children. They eat it like it is going out of fashion—and I see members of the House who are parents are agreeing with me.

Unfortunately, this bill is a bit too soft for us to support. We really want to toughen up this area, because, as the Minister has correctly said, too many liable parents are arranging their affairs to avoid paying anything more than the basic amount towards their children’s upkeep.

Too many parents receiving the domestic purposes benefit are not claiming for the liable-parent contribution. In doing that they are letting an awful lot of fathers—and mothers, in some cases—get away without contributing to what taxpayers are paying. That is important, because rich people are not the only taxpayers; taxpayers are also people who earn $10, $11, or $12 an hour. It is therefore absolutely one of the obligations of members of Parliament to make sure that every single cent of that money is well-spent, and that the people who must contribute do contribute. We will be voting against the bill at this stage.

I acknowledge the member who has just resumed her seat, and I thank the Minister for bringing this important bill to the House. It is certainly true, as the previous speaker has said, that there is no easy way to deal with families in crisis. One of the most difficult things about child support is that the Government is involved in matters of family affairs at exactly the time a family is most vulnerable; where the parents are not speaking to one another, where the children’s relationship with one or other of the parents is often strained, and where, because of the economic lose-lose of a separation, the resources that were once there to go around do not go around. In such circumstances it is hard to objectively ascribe fault. Lord knows, in any relationship fault is shared. Or sometimes it is just strain, or just circumstances, that drive families to the brink.

What we do know is that most often it is the fathers who leave the family home and enter a period of estrangement from the family and from the children. Sometimes it takes people a long time to get their lives back in order, and sometimes people who have got themselves outside their necessary and legitimate child-support obligations to their children realise after a period that they need to do the right thing. Unfortunately, the law as it stands does not support that kind of turn-round, because the sad fact is that when people first get behind in their payments they incur a 10 percent penalty on their child support debt, then 2 percent a month.

I can relate to the House a story about a constituent of mine who, with an initial debt of a couple of tens of thousands of dollars, ended up owing a total debt and penalty mount that was closer to a quarter of a million dollars. The person was on, I think, less than the average wage. The Inland Revenue Department naturally sought to recover what was owed. The person lost their house and is still estranged from their family. The debt penalties have still to be repaid. Nobody won, in that regard. So we have an unresolved problem. Yes, the full force of the law must be used against parents of no conscience who deliberately refuse to support their children. This bill is a balanced package of sticks and carrots that includes some very tough measures to catch people like that.

The previous speaker mentioned the very legitimate case of a parent with assets but perhaps disguised income who is not fully caught by the current rules. This bill makes it easier for the Inland Revenue Department to get a fair deal for the children in a case of that kind, because it gives the commissioner the power to initiate an administrative review that takes into full account the assets—perhaps trust funds, perhaps property—that that parent has. Who would argue? I do not think the previous speaker would argue with that. On the other hand, if the person wants to go a step further and tries to leave the country with a massive child support debt owing, this bill goes alongside administrative measures that will help the Inland Revenue Department toughen up in the area of border security and prevent so-called deadbeat dads from leaving their kids in the lurch, as they leave New Zealand. It also goes alongside something like $17 million in extra resources for the department, which will strengthen case management and investigations on parents who have got behind.

What is balance in such a difficult, personal, and delicate circumstance? To me it is something actually that most parties in this House ought to agree on: it is about coming down hard on those who deliberately seek to deceive and starve their children of the support they deserve; it is about putting kids first, in every circumstance; but it is also about acknowledging that sometimes people want to turn their lives round and get right with their kids, and that the system, as it currently stands, prevents them from doing that by freezing them out under such a mountain of debt and penalties that it is absolutely financially and physically impossible for a dad who wants to get back to his children and be a parent again, albeit an estranged one, to pay his way back. How does someone pay off a quarter of a million dollars of penalties on 30 grand a year? It cannot be done—and there is no incentive to. The only incentive is to go bankrupt or leave New Zealand, and that is how we got the penalty mountain.

Under this bill, if the parent is prepared in good conscience to enter into a binding arrangement to pay off the debt, a part, but not all, of the penalties can be reduced pro rata as one does so. That gives the parent a way back in; it gives him or her an incentive to get back in. But it is not—I repeat, not—a soft option. It is always best to pay on time, and then there are no penalties, and this bill does not remove them all.

What we, I think, would all share—and I agree with the previous speaker—is that there is no greater obligation than being a good parent. All members of this House, I am sure, would want the select committee to work together to craft this legislation so that it achieves the goal of assisting that process, in truly being a balanced package of sticks and carrots that lets repentant or intending supportive parents to discharge that obligation but holds a very hard line against those who do not wish to.

This bill is only part of an ongoing reform in the child support area. It matches additional resources provided in the last Budget. It matches a crackdown on border security, including expedited processes for catching deserting parents, and better information-sharing between authorities. This bill is a necessary step forward. Is child support ever going to be perfect? I do not think so, because I do not think this House or any other House has the capacity to write any kind of law that can take account of every individual family circumstance, and we know that at times of family break-up the law is called to intervene and mediate in the most difficult, sometimes desperate, often tragic, circumstances. The role of the law here is to support families that want to do the best for their children. It is to put the interests of the child first, not the interests of the parent. It is to support those parents, even estranged parents, who want to get back on the right side of the law and do the right thing by their children, and it is part of a very hard line on those who do not.

I hope that the National Party, through the select committee process, will show good faith with this bill. The lives of our children are too important. I call upon members opposite to work constructively at the select committee to consider the evidence, propose amendments, and come back to this House with a supportive vote for passing this bill. I call on other parties. I call on the members of the Māori Party, who see far too many broken families in the Māori community—the same way as there are in the Pākehā community—to give this bill their support for the sake of Māori children. I call on the Green Party to reiterate its support. I know that New Zealand First and United Future will be supporting the bill in its passage through the House.

This bill—about our children and our families—is too important for politics. Let this House rise above politics, just this once. Let us pass this bill, let us do the right thing for our children, and let us give some parents who genuinely want it, a way back while at the same time holding a hard line against those who do not.

I certainly detected a touch of evangelism, if not biblicalism, from the previous speaker on this very concerning bill. It is a very concerning bill when one looks back to the original Child Support Act 1991, whose fundamental principle was to ensure that liable parents were held responsible. If one looks at the Briefing for the incoming Minister of Revenue—2005, and at child support and the way that this debt has mounted over the last 6 years of the Labour Government, then it becomes even more concerning. In 1999 the combined debt plus interest penalties amounted to about $300 million, but it now amounts to $1 billion. That is what this Labour Government has caused over the last 6 years—a mounting debt. The Government has not shown interest in ensuring that parents are indeed taking up the responsibility of their liabilities to their children. That is a disgrace.

💬 Steve Chadwick: This bill will fix it.

I hear Steve Chadwick, the member from Rotorua, saying that this bill will fix that. It is absolutely the opposite. What this bill really does is encourage liable parents to do the very opposite, and the debt burden will mount only higher.

It was quite remarkable to hear David Cunliffe giving the evangelical Labour Party response, because, after all, this bill came into being only about 6 weeks before the election. Peter Dunne, the new Minister of Revenue, has to support it and, in effect, give away $500 million of taxpayers’ funds for a debt that should have been paid by liable parents who have been irresponsible. Instead, that debt will be paid by parents who are responsible. That is what is happening. On the one hand, $500 million of debt should have been paid by liable parents who have been irresponsible, and, on the other hand, United Future is basically twisted because of some confidence and supply agreement and has been put into the position of extracting $500 million from the responsible taxpayer. [Interruption] Is she saying I am too nice for that? It is absolutely vital that we make it clear to liable parents that they have a responsibility. I certainly heard David Cunliffe say that every parliamentarian cares for our children. That $500 million could have gone to child cancer or to child education. Instead, what is happening? It will be coming from responsible taxpayers. That is the real essence of this bill. It is a sop by United Future to the Labour Party.

I accept all of the points that my colleague Judith Collins made regarding the exceptions, but I just want to make a few other points. Firstly, the fundamental principle behind the Child Support Act 1991 is that parents have an obligation to provide financial support for their children, but that, indeed, is what this Labour Party is diluting.

Secondly, the introduction to that legislation made the point that the Government recognised the need for the State to supplement that support when the parents had insufficient income to provide an adequate level, but that in the first instance the parents had to meet their responsibility to the best of their ability. The essence of the Act was to provide a system for making the philosophy behind it practical and workable. But, once again, the Labour Government, under the guise of suggesting the system is practical and workable, is basically transferring the responsibility from those liable parents to hard-working New Zealand taxpayers.

Another point made in the original Act is that it is designed to reflect the ability of the non-custodial parent to provide financial support for that person’s child or children, and is based on the person’s income as declared for income tax purposes. That is exactly the principle that should apply here. But it goes on to state that when there are special circumstances that make the amount payable under the formula clearly inadequate or excessive, a custodian or a liable parent can apply to the Family Court for an order to depart from that formula. All those things are in the original Act. In most respects the Government is putting in with this bill a few clauses that may be quite reasonable—the ones that my colleague Judith Collins mentioned—but really, the major aspect is the transference of $500 million of debt to the hard-working New Zealand taxpayer, and that is just not good enough.

I note that when this bill was originally brought to Parliament there was considerable consultation around the country. In fact, the consultation went as far as this: the working group comprised not only officials from the Inland Revenue Department, which I am sure it has gone to, but also officials from the Department of Social Welfare, the Department of Justice, the Ministry of Women’s Affairs, Manatū Māori, Treasury, and the State Services Commission. The working group widely consulted special interest groups, including custodial parents, women’s groups, Birthright, Families Need Fathers, New Zealand Incorporated, academics, etc.

Firstly, I ask the Minister of Revenue how much consultation he or the Government undertook before introducing this bill.

💬 Hon Peter Dunne: A lot.

Was it a lot? Well, I very much hope that he will explain to Parliament that there has been considerable consultation, because certainly it does not look like it.

Secondly, we ask the Minister how much this bill will cost hard-working New Zealand taxpayers, because there is no mention of that over and above the $500 million. The new Minister of Revenue is giving away half a billion dollars right at the beginning of his term.

💬 Hon Clayton Cosgrove: You were going to give away $4 billion.

We hear the Labour Party saying that we were going to give away something. It is giving away $2 billion in interest-free student loans. We know the Labour Party’s largesse prior to this election, and this is the icing on the gingerbread, whereby Labour is transferring half a billion dollars in debt from liable parents on to hard-working taxpayers. It is an absolute disgrace, and I hope that the majority of hard-working New Zealanders thoroughly realise exactly what the Labour Party is up to in this instance.

I note the provisions for ensuring that liable parents who are overseas are made to pay their liabilities. I absolutely agree with those, along with those small provisions that include the under-16-year-olds, but I would like the Minister to let us know how many such under-16-year-olds there are. What is wrong with some of those under-16-year-olds working on a Saturday morning in order to pay their liabilities?

On behalf of New Zealand First I rise to support the Child Support Amendment Bill (No 4) going to the Social Services Committee. One of the bill’s purposes, as outlined in the explanatory note, is to improve compliance with financial support obligations, so that children receive the financial support to which they are entitled and so that the cost of State provision of financial support is reduced. As Judith Collins said earlier, that is basically a cross-party issue.

We all know that the actual costs of raising a child or children are huge. Children, particularly teenagers, are really expensive in today’s world. I know from first-hand experience that school trips, school fees, school books, and clothing are all very expensive. Of course, there is always the pressure for children to have labelled clothing, because they tend to be isolated these days if they do not, and it is very, very expensive to have. We also know that children can be totally disadvantaged in the short term and the long term if they do not receive financial support from both their parents. It is very unfortunate that in those cases it is the children who become the innocent victims. A father should always contribute to a child’s life financially as well as emotionally and, of course, with his time. There is no greater obligation for us than to be as good a parent as we can be. I know for a fact that parents often contribute financially right throughout a child’s life. Even then, as many parents, including many of us in this House, would say, we are never not responsible for our children, no matter how old they are and no matter how old we are, which is probably until the day that they become responsible for us in our old age and in our rest homes.

Last year in this House we passed legislation to ensure that solo parent beneficiaries applying for the domestic purposes benefit had to name the liable parents of their children before they could receive assistance from the State. As we see it, this bill is the second part of that legislation—to ensure that children receive what they are entitled to. Last year in the previous Parliament all parties stated on many occasions, and particularly throughout the debate on the Social Security (Social Assistance) Amendment Bill, that the courts should hold accountable parents who abscond from their financial responsibilities, and that is exactly what this bill is attempting to do. Likewise, as members of Parliament we have all had cases referred to us where liable parents pay the absolute minimum for their children, yet those parents have funds tied up in ways that do not make them liable for a realistic amount. I think that the bottom level of $10 or $11 per week sometimes paid by a liable parent is absolutely outrageous. At the end of the day the child pays for that lack of responsibility. We are pleased to see that the parents’ child support liability will accurately reflect their ability to provide financial assistance for their child or children, because that is what should happen.

Quite often, we hear about cases where a woman finds that the responsible father has gone to Australia or somewhere else overseas. We have heard at various stages that attempts have been made to try to bring such men back into line. We know that those attempts happen, but mostly they appear to be too small and usually absolutely nothing happens, which is a real shame. In 2000 a reciprocal agreement was signed between New Zealand and Australia, and we all support that. For that agreement to be worth anything, though, it has to be enforced, so hopefully this legislation, particularly when it goes through the select committee, will be a positive step towards that enforcement. It is essential that as far as possible parents’ child support liability accurately reflects their ability to provide financial assistance for their children, whether they are overseas or here in New Zealand. It has been suggested on more than one occasion that there may be many more people than we know about who have absconded and are resident across the Tasman, and who are not paying child support. If we can ensure that the number of people doing that can be significantly reduced, or if those people can be tracked down, then that should be done.

One of the purposes of this bill is to provide flexibility in the legislative provisions for dealing with incremental penalties, so that those measures to improve the level of compliance with financial support obligations will be enforced. We know that that will be welcomed by all parties in this House. I note that the bill clearly states that the new provisions will be available to liable persons with existing repayments if they continue to comply with all their financial support obligations.

The new temporary exemption for young people under the age of 16 who do not have sufficient income to meet even the minimum liability is interesting, and that was raised by Dr Hutchison. While we can understand that that will allow young parents to focus on their education rather than on having to earn an income—even on the weekend—so that child support obligations can be met, we will be very interested to hear about it from the various submitters.

This bill does appear to be a solution to the problem that New Zealand has with arrears in child support. As the Minister has outlined, almost $1 billion is outstanding in arrears and penalties, and that is a significant sum. We support this bill going to the select committee. We want parents to be responsible for their financial liabilities in respect of their children. We want to improve the effectiveness and the efficiency of the child support scheme, so we will look forward to this bill returning from the select committee.

I rise today on behalf of the Māori Party to address the Child Support Amendment Bill (No 4), which intends to make the payment of child support fairer to those liable for paying for it. The bill reflects two key kaupapa that the Māori Party is determined that this Parliament should uphold: the kaupapa of justice and the kaupapa of whanaungatanga.

It is a matter of justice that the responsibilities and obligations that come with the privilege of parenting should be upheld. The Child Support Amendment Bill (No 4) will make it easier for non-custodial parents to contribute to paying child support. The Māori Party supports that move as a matter of justice, and because it is also about the removal of penalties. The bill is proactive and it is positive. Currently, late payments of child support incur harsh penalties. It has been demonstrated that this has not led to any new payments. More than half of the total $1 billion in unpaid child support debt comes from late-penalty fees, and more than half of liable parents are already in arrears—a figure that has more than doubled since the year 2000. The speed with which penalties mount up actually works against the reduction of outstanding debt. Harsher penalties do not work, and this bill appears to recognise that. We must therefore resist all attempts to introduce punitive, soul-destroying penalties simply because some people think it is important to do so.

We must also be cautious that, although it seems this Government is introducing legislation that the Māori Party is in support of, we in the Māori Party are always aware that a drop in the popularity of a Government often leads to it dispensing with issues of justice while it goes for the baubles of power and office. This morning the Māori Party spent time with the special rapporteur on situations of human rights and fundamental freedoms of indigenous peoples. We discussed this very concept and, in particular, Māori rights. Justice is not just about the payment of money; it is also about ensuring that children keep their links to the people from whom they were born. I have met too many people from Te Tai Tokerau who are trying to reconnect with their own whānau, and, with few exceptions, nearly all of them have been State wards in some way, shape, or form.

This bill is also about kids, and I raise this here because I saw a letter from Cindy Kiro, the Children’s Commissioner, that really upset me. In it she said: “We know that most children who break the law have been abused and traumatised. These are the children who need to be rehabilitated. We need more youth facilities and other options in order to do this.” Now, I tell those members who do not know what youth facilities are like that they are basically prisons for kids. After the prisons for kids teach them to be even worse kids, they end up in the prisons for teenagers. Then, after that, they end up in the prisons for big people—for people our age.

What we are getting, of course, is a prison system that has totally collapsed. The Children’s Commissioner is recommending that we feed them in at the bottom end. She is feeding them in at the bottom end so that we end up in a situation where adults are going to jail because they know no other kind of lifestyle.

Now although I respect Ron Mark’s comments last night about parents having responsibility for kids, and how we should not do the crime, etc., a lot of it is also to do with how stupid some crimes are. Not too long ago, it used to be a crime to keep eggs in the fridge. Not too long ago people such as Ron Mark and Mahara Okeroa could get arrested at night for walking around, simply because the law said it was illegal to walk around with one’s face darkened.

💬 Hon Mahara Okeroa: I never got arrested!

No. Now those are the kinds of laws that this country has to deal with, because we have accepted our laws from somewhere that has nothing at all to do with this country, or the people of this country. They are talking about little kids running around in England and putting soot on their faces, to rob places.

There is something sick in a society where the Children’s Commissioner, whose primary responsibility is the protection of children, can say that we need to build more youth prisons. We are supportive of a bill that tries to reduce a sense of penalty, but we are against any attempt to use youth facilities, and increase the number of youth facilities, so that we are just feeding kids in at the bottom end and they come out as hardened criminals at the other end. What sort of justice does that represent? I suggest to the Children’s Commissioner, and to anybody else who thinks it is a great idea to send kids to youth facilities, to spend a couple of nights in those youth facilities. I made a statement a couple of weeks ago, that people from Child, Youth and Family Services who do not mind sending kids to jail should spend a couple of nights in jail themselves before they think about sending kids there. After they have spent a couple of nights in jail, and absolutely freaked out about what a scumbag place it is—and I know, because I have had some middling experience with it—they will then realise that it ain’t a good place for adults to be. After those Child, Youth and Family Services staff, and the Children’s Commissioner, have spent time in jail and realised what a hellhole it is, perhaps they should send their own kids in there after them. Once they realise that they would never ever contemplate sending their own kids to jail, maybe then they will know that jail is no place for our kids, or anybody else’s kids. It is a university of crime at the top end, and unfortunately the Children’s Commissioner wants to start them off at a preschool for crime—youth facilities. It does not work.

I support the view that we, as the Māori Party, and as Māori people, need to take up our own responsibility in telling our own whānau that we have to pay our dues in this society. If we create a situation where our kids are trapped into that kind of poverty, where our kids are trapped into a situation where they will end up going down that track, then we have to take responsibility as well for trying to lift them out of it. This bill goes some way towards addressing that; recommendations to send them to youth facilities or allow them to be held in jails does not.

The Māori Party supports the bill. Our party does not support any attempt to start our kids on a life of crime by simply increasing the number of youth facilities, so that kids can get to the position where they will end up going to jail, sleeping in vans outside prisons, or staying overnight in rugby clubs, and all those kinds of places. This is a big issue, and it is starting at the bottom end. I hope we can all do our bit, with cross-party stuff, to try to address those problems. I tell folk that harsh penalties do not work, but helping kids will. Kia ora tātou katoa.

I rise to speak to this first reading of the Child Support Amendment Bill (No 4) with a certain sense of déjà vu. I think back to the very first bill that came before Parliament beyond the Address in Reply debates and the Imprest Supply Bills when I was a new MP 3 years ago. That bill was also a social welfare bill and the Minister responsible for it I think surprised everybody in the House by approving the ability of sole parents not to have to undergo work tests until their youngest child was 18. I felt at the time that that probably was not something he normally would have agreed with. In fact, in years gone by he probably would have voted against it.

I suspect that this child support amendment bill also falls into that category, and I reinforce the comments Judith Collins made in her speech when she said she suspected that Mr Dunne would like this bill to be toughened up at the select committee stage. I suspect it will pass this first reading, because the Government will have the numbers for that.

ACT will not be supporting the bill. We have several quite grave concerns about it, although there are some good points in it, too. But as a new member of the Social Services Committee I look forward to receiving this bill there, so that we can work on it and get the best possible outcome for our children.

There is certainly no doubt that because of the splitting up of families, children have to put up with and endure many tragic circumstances, for a large number of reasons. I think there certainly is widespread support for the legislation from every party in this House. No one would deny that our children must come first when we look at legislation being put in place, particularly with regard to welfare. However, the ACT party thinks that this bill only tinkers with many of the very real problems that many children in this country—too many children—face when it comes to issues of welfare and, specifically with regard to this bill, issues of child support.

The tinkering that I mentioned has been well spoken of, and the issues, I think, have already been pretty much addressed. It is disturbing to think that the proportion of financial support debt, as outlined in the commentary—and that includes child support debt represented by penalties—exceeds outstanding core liabilities, and continues to grow. I think that we, as legislators and parliamentarians, should be very concerned about that. As Dr Hutchison pointed out, we are talking here about $500 million of debt. That is a lot of debt; it is a lot of money in anybody’s book, and we should be very concerned about it.

I also note Dr Hutchison’s point about how much this bill being implemented in its current form—no doubt there will be changes at the select committee—will cost the country. I hope that we will have a regulatory impact statement made available to us at the select committee so we can look at those issues. I am afraid that in the 3 years I have been here already, we have had far too many bills before select committees where no regulatory impact statements have been done, so that we as legislators trying to do our best for New Zealanders, and particularly for vulnerable New Zealanders—in this case, children—have not known how much the legislation will actually cost. Only too often, regulatory impact statements have been promised, but never delivered. I hope that that will not happen in this case, although I fear it may well do.

It was also disturbing to read in the explanatory note that more than half of all liable persons are in arrears. That tells me that the system we have in place is failing. We have to ask ourselves now whether this legislation, this bill before us now, will alter that, at all. I fear the answer to that question is “No.” I think some big questions are being raised—in fact more questions are raised than answers are presented with this legislation.

I want to come back to a point that many others have touched on, which is the rights and responsibilities of parents. The first obligation of parents, of course, is to provide the support their children need to live in a safe and happy environment. There is an obligation and a responsibility, but this bill touches on only one of those. Responsibility, though, is across the board. It is most important in an emotional sense, but this bill touches on the financial aspects only. Far too many people, unfortunately—mostly fathers but also some mothers, as others have pointed out—are not taking up their responsibility of providing properly for their families and for their children.

I would like to raise a new point, though, that has not been mentioned, and I mention my colleague Dr Muriel Newman who, sadly, is no longer in this House. She fought long and hard for many welfare issues. In particular, one issue that is relevant here is that of shared parenting. She fought long and hard for shared parenting to be the norm unless there was a good reason that it should not be so, as opposed to the situation of having just one custodial parent. Her battle will continue, I am sure. But one thing we ignore in this bill when we concentrate on just the financial aspects is that many other options could be explored for the benefit of our children here in New Zealand.

I have been the social services spokesperson for ACT for only a very short time, but already I am inundated with many, many letters every week—as I suspect those on the select committee and other spokespeople for social welfare also are. A letter I got last week springs to mind. It was from somebody who felt that there were many unfairnesses when it came to child support. We should be trying to promote fairness in this bill too, of course.

The letter asked, where a non-custodial parent has provided support for his or her children for many years and the former partner has since remarried or joined with somebody else and is now on quite a significant income, how fair it was that the non-custodial parent is still obliged to support the children, although that parent may not be in good financial circumstances. The non-custodial parent still has a heavy and burdensome obligation to those children, despite the fact that he or she is denied access to them.

Issues like this must be raised. I am sure that they will be at the Social Services Committee. Submitters will tell us stories very like that one. Many people—particularly fathers—are denied access to their children but are paying their dues. They are taking responsibility. They want to take much more responsibility for their children. They accept financial responsibility, yet they are denied access to their children, and I do not think that in anybody’s mind that would be considered fair.

I will finish by talking about incentives. The incentives are one reason ACT will not support this bill. We feel that the incentives in this bill are wrong. When we talk about writing off funding, we provide a perverse sort of incentive. We give an incentive to those people who have not paid and who have got into arrears for whatever reason, but we then disadvantage the people who all along have been accepting their responsibility in good faith. The incentive suddenly becomes topsy-turvy when we talk of cutting off payments and of people not having to pay arrears.

Other ways to deal with that issue must be explored. Some of them are very simple. ACT has always heavily promoted mentoring. In some cases, people who get into arrears do so not because they do not have the money, but because the money they do earn has not been budgeted wisely. Areas like that could be explored. Tax cuts are another issue that I find myself coming back to just about every time I get to my feet in this House. If we put money back into people’s pockets because they have earned it, then people in that position would find that because they have more money in their pockets, they might well be able to budget their own money more effectively and to good cause in order to support their children.

There are many areas we could look at, and I certainly hope that the Social Services Committee, when it receives this bill—as I am sure it will—will explore them, rather than just look at a very narrow field of writing off money and providing perverse incentives that really do no one any good. Certainly, I have great confidence that the committee will take this bill very seriously and deal with it in a very constructive manner. Despite the fact that ACT will not support this bill going to the select committee—we will oppose the bill at this stage—I hope that it will be much more than just a tinkering tool and will benefit children in New Zealand who are vulnerable and dependent on the Government for their income. I hope we can toughen up the bill and make sure that the fairness I talk about exists and that the incentives are in the right place.

The Green Party will support this bill going to the select committee. We will listen closely to the submissions to the committee and decide on our final vote depending on the outcome of the submissions process.

We note that the liable-parent payment system was put in place to ensure that no parents could escape their responsibility to support their families financially. We need to remember that for many families the system has worked well, and that for many struggling employed solo parents in particular the money they receive through the scheme is critical to their survival. But, obviously, for many it has not worked well, at all. The fact that half of all liable parents are in arrears suggests, really, that we have to address a very, very serious problem. We could put our heads in the sand, jump up and down, wring our hands about how irresponsible parents are, and so on and so forth, but we really have to try to address this particular problem and be more flexible in our approach to it.

We particularly support the removal of the provisions for harsh penalties, and we support the greater flexibility. Overall, we think that the bill attempts to address positively a very serious problem in New Zealand, so we are happy to support it going to the select committee.

I rise to take a very quick call on this bill. I am delighted to support it. I am surprised that all parties in the House do not support it. Members who have been electorate MPs would have been visited by desperate parents—either men or women, but predominantly men—who simply could not afford to meet the penalties on their child support but were not saying that they did not want be responsible parents who pay their child support. This bill corrects that anomaly. It provides the right sticks and carrots for parents to be able to enter into a contract to pay their child support fairly but to be released from the burden of the penalties. I support this bill. It has been a long time coming. It will put things right and the money will flow to the children, and that is what matters.

National’s next call is split into two 5-minute calls.

As this is the first time I speak in this House in this term of Parliament, I firstly give the Speaker my congratulations on her re-election, and I congratulate you, Mr Deputy Speaker, and our Assistant Speakers, Ann Hartley and Ross Robertson, on your appointments. I wish you a very successful time in the House. I have to say that it is great to be back, and I thank the people of the East Coast, from Wairoa through to Whakatāne, for having the faith and confidence to elect me as their representative to this House.

We are here tonight to speak to the first reading of the Child Support Amendment Bill (No 4), and National stands opposed to this bill. The bill allows for more write-offs of penalty interest owing from liable parents. We know that more than 50 percent of liable parents are in arrears. That is an astonishing record. Let us look at the record of this lazy Labour Government. Over the last 6 years it has allowed that debt to grow from $300 million to over $1 billion. All sorts of heart-wrenching speeches in the House today have bemoaned the fate of those poor parents who are in arrears, yet the members of this Government have sat on their hands for 6 years and done nothing to help those parents out of that debt. The Government now brings to the House a bill that wipes that debt, in the name of helping those parents.

This bill actually strikes at the fundamentals of our community, and it makes a mark in the sand between the philosophies of Labour and United Future—and all the other ragtag parts of the Government—and the principles of the National Party. The National Party believes that the most fundamental responsibility of parents is to look after their children and to provide for their financial support. It is not the State’s responsibility to do so. The Labour Party says that the State will step in and look after them, and that the State will take over the half a billion dollar debt that those parents owe.

But the State is nothing more than other taxpayers; it is nothing more than some of those parents’ next-door neighbours, who are working hard to support their own families. Labour is saying to those liable parents—and I have to say it is unfortunate that most of them are dads—“Don’t worry. You don’t have to take any responsibility for the children that you might father, because if you don’t pay, we are going to wipe that debt. Everyone else will pick up the tab for your responsibilities.” Labour members have the temerity to stand in this House and to suggest that that will make more people take responsibility for their own children, but I have to say to the Labour Government that it just does not work that way.

How do we encourage people to take responsibility and pay their bills if we simply write off their debt? There is the same fuzzy thinking around student loans. Labour does not understand that smart people out there click on to the fact that the Government does not enforce the payment of their bills and debts, and that they can get away with not paying them. We see that in the courts with the write-off of millions of dollars worth of fines. Criminals know that if they do not pay their fines, then no one will chase them.

It is the same with this bill. We hear the Minister speak about the “burden of arrears”. The burden of arrears has been placed fairly and squarely, under this bill, back on to the parents who are working hard and supporting their children. I oppose those measures. I am in favour of getting tough on parents and making them understand that their greatest responsibility is to value their children and to support them financially, through thick and thin.

I speak on the Child Support Amendment Bill (No 4) 2005. I had sort of hoped that we would keep going with maiden speeches for the next 6 months, but I suppose we need to get down to the business of the day. The intention of the bill is actually quite good. It is to improve compliance with financial support obligations so that more children receive the financial support to which they are entitled. Who can disagree with that? As we have all said, it really is about the children. But where is the sense of responsibility? Where is the incentive for people to financially support their own children?

This bill sends the message that liable parents do not necessarily have to financially support their own. It gives them an out where there should be none. People should look after their own. We live in today’s world and we can all accept that relationships do not always work. But where children are involved, parents have a financial responsibility to support their own to the best of their ability.

The Government is almost saying that people are not paying currently, so we should soften the law and make it easier for them not to pay. The new section 135G, which is proposed to be inserted by clause 32(1) of the bill, provides that the commissioner may grant relief if all of the debt to which the penalties relate is paid, but he or she must be satisfied that recovery would involve an inefficient use of resources or would place the liable person in serious hardship. Can parents who depend on the support from the liable parent, who are working part-time or are on a benefit or the minimum wage, and who are doing the best they can to keep the family together, declare serious hardship and no longer be responsible for the debts they incur? No, they cannot.

It is said that more than half of all liable parents are in arrears. The Inland Revenue Department is struggling to get money out of those guys already, and the Government want to push through this amendment bill, which actually disincentivises those people even more. The bill gives the message that those people do not have to worry about paying the full amount or about paying on time. If they go into arrears or incur penalties, then there are a couple of good ways they can get out of paying those penalties back. There is no incentive to pay the correct amount on time.

This bill makes a mockery of those thousands of parents who are raising their children and struggling day to day to make ends meet. Those parents cannot afford to buy their kids new clothes with the swanky labels that we have been hearing about, and they worry about how they will pay their bills. They try their best, and go without what we would probably consider essentials, in order to scrape together a bit of money for the school fees, because they do not have that money. They still have a bit of pride, but for them to go to the school and say they are suffering from serious hardship would erode the last wee bit of respect that they have. Those parents are taking responsibility for their own, they have stalled their careers, and they have a right to have that liability paid. They do not ask for something for themselves; they ask only that they be given the support that is due to them by the law. Can anyone disagree that parents should take responsibility for their own? No—but this bill will disincentivise those parents.

I talk to those fathers, as well. But what about those fathers who do pay on time, who take responsibility, and who want to do the best by their kids? They feel frustrated. They feel that it is other fathers who are not living up to their responsibilities, who play relationship problems off through the kids, or who still try to have some level of control by withdrawing financial support, and it is those guys who give others the bad name. It is only the responsible fathers’ own sense of decency and sense of responsibility that sees them pay the full amount on time. But the Government says it wants to punish them, and give more to those who are not paying. It just seems incredibly wrong.

I oppose this law on behalf of mothers out there who rely on that financial assistance. I oppose it out of a sense of decency. We should be incentivising and not disincentivising those parents who need to be paying.

I am very proud to support the Child Support Amendment Bill (No 4), and I look forward to it coming before the Social Services Committee.

As this is only a brief call, I just have to express my disappointment, I guess, at the parties in this House that will not be supporting this bill even through this stage. Why does the National Party always seem to see the glass as being half empty? Why can those members not accept that an honest effort is being made here to enhance, we hope, at the end of the day, the lives of the very children whom this bill is wanting to support, and to make sure that those who are liable are, indeed, truly liable for what they do.

A number of members of the select committee have spoken today, and I can see that we will have a robust debate and a very interesting time during the hearing of submissions. We really look forward to it. This is a good bill to get our teeth into over the next wee while. I will certainly be there, chairing that select committee, and making sure we give the bill the best shot it can have. I support the bill.

I rise in opposition to the Child Support Amendment Bill (No 4), in spite of the fact that I can see that it contains a number of clauses that are helpful and take account of some of the tensions that exist within society around this problem. I can remember a time when people who did not pay their maintenance were locked up—held in jail, did time—and their bills still accumulated. Thank goodness those days are over.

Some of the good parts of the bill revolve, for instance, round dealing with the responsibility for sexual abuse history and with negating the need for payments in respect of that history when they would re-victimise people. The bill also contains good points around dealing with young liable parents under the age of 16. But I can see the need for an incentive for people to make payments and not avoid responsibility. It is a shame that what we see from time to time right across our society is that when we provide an incentive that is too good to be true, people go about exploiting it. The honourable member Anne Tolley mentioned earlier the loophole in the student loan scheme, which was exploited in the past and will continue to be exploited. That will continue to happen when loopholes are provided. Given the opportunity, people will exploit a loophole to avoid a penalty payment.

I am only too aware of the tension around the fact that the people who suffer so often in these situations are children. But, at the same time, I believe there is a bigger picture, as well. What happens to those liable parents who have worked hard to clear their debt and to provide for their children, and who have taken responsibility for it? By allowing people to just negate their responsibility, we are not teaching them the way they should go while they are young so that in their age they do not depart from it.

It was interesting to hear the Hon David Cunliffe speaking earlier about the way in which the interest accumulates. To have a system under which the penalties amount to about $36,000 in the first year and about $27,000 in subsequent years is, to my mind, unjust, but that does not mean there should be no penalty payment. Why cannot those penalties be reduced by the Inland Revenue Department to something that is attainable and achievable? That would then provide an incentive for those people to pay the penalty, and also allow those who are making payments on time to reap the benefits of being productive and taking responsibility for their children. There needs to be an incentive for people to parent well and to look after their children.

I believe that in offering a way out, as this bill does, the relationships between parents and their children are actually cheapened, because the children then see themselves as simply being an encumbrance on their parents. If the mother complains because the money has not been paid by dad, or if whenever the child spends time with dad he bitches and moans about how much money he has to pay to mum, what does that say to the children about the relationship between their parents and them, and about how they themselves are valued?

It is my belief that maintaining a regime that allows people to walk away from their responsibilities does nothing to help in the long term. I have many friends on low incomes who have done their damnedest over the years to ensure that their children have money. The people who avoid those responsibilities have a big fear, and that is that the money they pay will support someone else’s kids or the step-parents of their own children. We need to provide a system where there is an incentive. That incentive could easily be addressed by reducing the penalty rate to something more in keeping with the debt that is owed, so we do not have the ridiculous system, which the Minister himself related, whereby a $20,000 debt results in a half-million-dollar penalty.

Debate interrupted.

The House adjourned at 6 p.m.