Child Support Amendment Bill (No 4)

Not everything in this part of the Child Support Amendment Bill (No 4) is bad. There are some good points about it, and I will let the people who support the bill promote those, because, after all, they are supposed to do something for the salaries they receive—unlike Taito Phillip Field, who is not expected to do anything, which is a bit of a shame, really. But one of the things about this bill that the National Party simply cannot support is the attitude that liable parents, who have an obligation to pay something—not everything, but something, and even, in some cases, as little as $11 a week—towards the upkeep of their children should have penalties just thrown away and dismissed on the basis that that will somehow encourage them to meet their obligations towards their children. It simply does not work. In 2003 the Government’s own figures told us that from those New Zealand liable parents living in Australia, $73 million was owed to New Zealand, either to the Government on behalf of the taxpayer, or to the custodial parent. What has happened under this Labour Government? That figure has ballooned to $281 million. That is over a quarter of a billion dollars.

The Labour Government likes to say that a lot of that is penalties. Actually, a lot of it—more of it—happens to be actual debt. It is the actual amount owed. I am so proud that in my party, the National Party, we can stand up for those custodial parents who look after their children, who pay their way, who have to be both mum and dad, and who have to go and tell their children why they cannot have school trips because they cannot afford it, while the other parent—who has skipped off to Australia—has decided that he or she does not have to have any obligations. Those people are all about the culture of entitlement that so pervades this Labour Government and everything it touches.

I will be interested to see how New Zealand First will vote today. As a member of the new “Poodle Party” for the Government, Mr Woolerton is not sure. How is he going to vote today?

R Doug Woolerton: I don’t know—

Mr Woolerton says he does not know. He will find out from Helen Clark how he will vote today. Well, I suggest that that party should be renamed the “New Zealand Second Party”. That is because it is second to the baubles of office that encourage that party to keep propping up this corrupt Labour Government, which is trying to send to those liable parents who are not paying their way, the message—

💬 Hon David Parker: I raise a point of order, Madam Chairperson. I draw your attention to the comment of the speaker, who used a word that is unparliamentary. I seek that it be withdrawn.

The CHAIRPERSON (Ann Hartley): Yes, it certainly is. The member will stand, withdraw, and apologise.

I withdraw and apologise. I will not say that word again. I will say, however, that this Government sends the message that people can just take somebody’s money, use taxpayers’ money, not pay it back, and then it goes and changes the law so that it can get out of it. That is exactly what this bill is all about. This bill is all about using taxpayers’ money and then not paying it back. In fact, people get rewarded for it, under this Government. They get told they do not have to pay it back, because, after all, why should those absentee mums and dads pay back the money? Why should they?

This Labour Government is supported by that other party that should be called “New Zealand Second”. What is the message that they are sending? It is that if Helen Clark does not have to pay back what she owes, why should they? That is actually a reasonably cogent argument. These men and women, who do not want to be mums and dads any more, moan about how they never see their children except in photos—because they never pay anything towards their children. I can understand why they might get the message that people do not have to meet their obligations. This Government has a culture that is all about entitlement. Nothing in that culture is about responsibility—that is the attitude this Government is forcing into New Zealand. Many people here in this Parliament are parents, some are not and would love to be, and some say honestly that they did not want to be. I am one of the people who wanted to be a parent. I say to this Chamber that when we send out a message that fathers and mothers do not have to have responsibility for their children—that they can flit off to Australia and owe the New Zealand taxpayer and custodial parents so much money—that message is wrong.

Judith Collins put it succinctly—when we take a situation where you have used taxpayers’ money wrongly and you refuse to pay it back—

The CHAIRPERSON (Ann Hartley): The member is a whip, and she knows not to bring the Chairperson into the debate. That is about the third time today—

This is the first time I have been on my feet today.

The CHAIRPERSON (Ann Hartley): No—I said this is the third warning I have given to speakers from the member’s party today.

When someone uses taxpayers’ money for a purpose that was not intended and then refuses to pay it back, this Government passes legislation retrospectively and wipes that debt. There is a name for that but we are not allowed to use it.

As a member of the Social Services Committee, I sat through the representations from the Inland Revenue Department about the purpose of this bill, and I want to read to the Chamber a quick sentence from its briefing to the select committee: “The main outcome sought from the changes proposed in this bill is an increase in the collection of child support through improved levels of compliance.” I do not actually have a problem with that. I support that—I think it is great. The briefing goes on to state: “Under the major change proposed, the Government will forgo the collection of some incremental penalties to provide an incentive for non-payers to begin making payments of financial support again.” I have not understood that, and I have asked the officials all the way through this process how it is going to work. I did not understand the philosophy—that is, until I saw what has unfolded in this House over the last few months regarding the Labour Government’s spending of taxpayers’ money.

💬 Hon David Cunliffe: I raise a point of order, Madam Chairperson. Unless I am misinformed, the purpose of the Committee stage is to discuss the select committee report on the Child Support Amendment Bill (No 4), the purpose of which is to increase the compliance of parents who are failing to meet their obligations. This line of argument seems to me to be very clearly irrelevant to that bill, and therefore outside the proper scope of the debate.

Speaking to the point of order, I question the Minister on that. The line I have taken is, I think, quite clear. I am discussing the philosophy that was put to the select committee by the Inland Revenue Department, and that is entirely relevant to the bill. In fact, I read from the briefing made to the select committee by the Inland Revenue Department. I am discussing the philosophy of the changes proposed in Part 1.

The CHAIRPERSON (Ann Hartley): I take what both members have said, but I remind the member that there has been quite a lot of irrelevance during the speeches, and members need to come back to the bill.

The difficulty I had with the proposals in this bill was the wiping of penalties of half a billion dollars owed to the New Zealand taxpayer in order to promote the nutty idea that by getting rid of debt we will encourage more people to pay their child support. That philosophy was, to me, completely unsubstantiated until I saw the behaviour of this Government when it applied this philosophy to other instances where it spends taxpayers’ money and, when called upon to repay it, brings into Parliament legislation to account for and legalise such activity retrospectively. That is exactly the same—

💬 Hon David Cunliffe: I raise a point of order, Madam Chairperson. I ask you to reflect on the fact that the member herself has just taken this debate to other bills, which, by definition, must be outside the scope of this bill.

Speaking to the point of order, I raise again the fact that I am discussing the philosophy behind the changes proposed in this bill. In order to discuss the philosophy behind the changes, it is entirely legitimate that the changes are compared to those in other bills that may or may not appear in this House.

💬 Hon David Cunliffe: Earlier in the member’s speech she began down the path of election-spending issues, and one can only assume that the legislation to which she now refers is legislation that has not yet been introduced into the House. It rather bemuses me how it can be relevant to this bill for her to speculate about a bill that has not been introduced by the Government on a political issue that is completely separate from and irrelevant to this bill. I invite you, Madam Chair, to consider whether it would bring disorder into this Chamber for MPs on the Government side to begin an analysis of the Opposition’s acceptance of trust funds from secret donors or whether that would be outside the scope, in its view.

The CHAIRPERSON (Ann Hartley): The member needs to come back to the bill and look at what is in this bill, not what might be in another bill. I caution the member to come back to the bill.

The purpose of this bill before the Committee today is to wipe the almost half a billion dollars owed by people who have used taxpayers’ money to support their children and who are now refusing to pay it back. This bill wipes that debt, with the concept that in doing so—as the Social Services Committee was advised by the officials—other people will be encouraged to pay their child support.

All the way through this process I have questioned that philosophy. I do not understand how wiping people’s debt when they refuse to pay will encourage them to continue paying any child support. I make the point again, without reference to any other bills that may or may not come into this Chamber: I did not understand the philosophy until I saw the behaviour of the Government, but I understand it now—we can use other people’s money to pay our bills. When called to account, we can bring into the House legislation that retrospectively gets rid of debt, in order to move forward. That is a philosophy, it is the philosophy behind this bill, and it does not make sense.

I do not understand why we are in this Chamber wiping off half a billion dollars of debt—of taxpayers’ money owed by parents who have not bothered to support their children or who have not bothered to come forward to make arrangements when their circumstances changed. This Government says it is OK to take taxpayers’ money. It says it will forgive that debt. This Government will look forward and move on, having passed legislation that wipes the debt, and will start off with a clean slate. It believes that, somehow, that action will make people suddenly come forward and pay their child support.

The National Party believes that parents should support their children and that children have a right to expect that their parents will support them. But we also have a right to have a Government that abides by a philosophy that treasures and values the money people pay in taxes, and gives some account to the fact that people have paid their taxes and that the money is not there to be used at the whim of a Government as it sees fit. It is a very bad signal to bring retrospective legislation into the House to wipe those debts, whether they are in bills before us or in bills that have been talked about in this House. That was the first point; the first role of this legislation.

The other big change this bill produces is the ability to allow the commissioner, not just custodial parents, to initiate a review of the financial affairs of liable parents. There were a great many submissions on this matter, some of which informed a rather surprised Social Services Committee that, in fact, this bill was not needed and that there were avenues.

I want to take a brief opportunity to correct some factual inaccuracies and points made by the previous two speakers. The first of those was a misinterpretation of the purpose of the bill. It is clearly stated that the bill’s purpose is to increase the compliance of parents currently failing to meet their obligations to their children. I do not think there is a member in this Chamber who would not want parents to fulfil their obligations to their children and who would want to weaken those obligations. Certainly, the Government wants to see those obligations met and strengthened. That is why this bill, in part, creates the power to administratively review child support levels where there is reason to believe that parents may be hiding the true level of their assets and income—more on that later.

The second inaccuracy, from the previous speaker but one, was that most of the outstanding debt is in the underlying debt and not the penalties. In fact, there is $1,012 million in outstanding child support, of which $584,000, or a little over half, is currently owed in accumulated penalties.

But, of course, the largest flaw in what the Opposition is saying is the argument that we are somehow letting parents off scot-free by giving away all the penalties. In fact, the substance of the bill is quite different from that, and members know that. The bill allows individuals to enter into a binding scheme of arrangement with the Inland Revenue Department to pay off their arrears. If they do, and only if they do, then a proportion of—that is, some of—their penalties will be remitted as an incentive. If they do not enter into such an arrangement, they will receive no write-down of penalties, but, in any case, the bill provides that they cannot have all of their penalties written off. So, disappointingly, we are seeing a degree of hyperbole and exaggeration creep into the speeches of Opposition members.

That brings me to the final point, which is that the Opposition seems to think this is an opportunity to take the debate into places that are not relevant to it. I ask Opposition members to reflect on the fact that clauses in the bill would allow the Inland Revenue Department to look through income to assets and wealth. There are a number of rich parents—particularly, it has to be said, some rich dads—who are not being frank with people about how many assets they have and where they spend money. Trust funds are often employed to hide that money, and that is not the only circumstance in which those trust fund arrangements are used. One would ask Opposition members whether they really want to go there, because I for one can think of a number of other trust funds that could be drawn into the debate.

Thank you for the opportunity to speak on the Child Support Amendment Bill (No 4) and the purpose of it. There are elements of this bill that one would easily agree with, and I look forward to the opportunity to speak on them a bit further on, particularly when we talk about the level of sexual violence and the fact that the bill lets victims off having to pay child support.

The Social Services Committee also heard some good submissions on under-16-year-olds being let off child support payments until they are over 16 and are actually earning an income. That allows those young people the opportunity to get on with, hopefully, some schooling without having to think about gaining an income. Those arguments had a lot of logic, and we are pleased to see this provision coming through, as those arguments make a lot of sense.

I note that there are members from the select committee here who have heard those submissions, but that most of them are from this side only of the Chamber. Of course, I expect that the Minister in the chair, David Cunliffe, would have read every submission in detail. What grabbed me and everyone else on the select committee, no matter what parties members came from, was that this is an extremely emotive issue. What happened with a lot of the submissions was that people went off the subject of this bill, but without a doubt what they had to say related to children, to emotions, and to finances. When we put those three things together what we got was a lot of people who were very hurt and confused, and it was very personal for them. From going through the submission process, I know that there was a lot of discussion at the select committee about stuff that is perhaps outside this bill but is, of course, very relevant to child support issues.

Given that some of the members of the select committee who heard those submissions have not taken the time to come to the Chamber now, I thought I might go through some of the matters that do not come out in this bill but meant a lot to people. A lot of stuff that came out was about parents who care for their children for 40 percent of nights having to pay child support at the full rate, as though they do not care for their children. At that level, they still have to pay full child support. As soon as they go one night over 40 percent, their level of child support starts changing. What really struck me throughout this whole process—and I am sure the advisers will agree with me, because they identified this issue, as well—was that it does not induce people to talk to people.

One thing that really came out is that the power is put in the hands of one parent while the other is marginalised. One has to question how that can possibly be what is best for the children, because at the end of the day that is what it is about. That is what really struck me throughout the whole process of talking to advisers and to submitters, and of doing a lot of reading on the issue myself. I have to tell members that I did not grasp it easily. It is a very in-depth and explicit piece of legislation that has a combination of all the emotional stuff and the technical issues involved. In all honesty, that was not my strength, and it took me quite a bit of sitting down and working through those formulas. I still would not have the courage to stand here now and try to speak on those matters in technical detail.

What really struck me the whole way through was the way in which the bill seems to set people up against each other. There can be little doubt that what we stand for is—and I do not want to agree with the Minister, but there is a level to which we do agree—that parents have to pay for their children. There has to be that level of responsibility. Where I think we will differ is on whether we think this bill takes that far enough, whether it actually accomplishes what we want to do, and the philosophy around writing off penalties. I agree that it is not about writing off the debt.

I took a lot of time to try to understand this bill, because I saw it as being so important to so many people and as deserving the due courtesy of having that kind of detailed consideration. What worries me is not so much the purpose, in that I get that the Government is trying to get some of that money back, and that the way to do it is to reward people for paying that money; it is just the philosophy of it. At the end of the day, people have got themselves into that situation, there is a level of self-responsibility, and someone else should not have to pay.

Thank you very much, Mr Chairperson, for the opportunity to speak on the Child Support Amendment Bill (No 4). I note that the purpose of the bill is to improve the level of compliance with financial support obligations, so that more children receive the financial support to which they are entitled, and so that the Government maximises revenue receipts to offset the cost of State provision of financial support. But, as my colleague Judith Collins so aptly pointed out, this bill will waive $500 million that should have gone to children, and that signal is one we would hope would not come from a responsible Government in New Zealand. The Labour Government is clearly encouraging New Zealand parents to be irresponsible. I think my colleague Judith Collins mentioned that in 2003 the debt owed by liable New Zealand parents in Australia amounted to about $80 million, but in 2006 the debt owed has now increased to a whacking $280 million. This Government said that it would increase measures to track down those liable parents. How successful has it been? It has been successful 400 percent—in the diametrically opposite direction.

The fundamental reason for the Child Support Act 1991 was to ensure parental responsibility for the support of children. We in National believe that that sentiment is absolutely appropriate. But we see the dismal record of the Labour Government’s rhetoric; we see that not only have liable parents in Australia increased their debt 400 percent over 2 or 3 years, but the Labour Government is about to waive $500 million that should have gone to children. That is the sort of money that could go to child health, that is the sort of money that could go to child education, and that is the sort of money that could shorten waiting lists for children.

I am deeply concerned about several things in this bill, and they are these. The chairman of the Social Services Committee, Georgina Beyer, has said that the bill should be rushed through, because it is so important to reset the situation and ensure that the collection of that revenue takes place in a much more efficient, effective way. The bill was introduced on 5 August 2005. As my colleague Paula Bennett pointed out, this bill engenders huge emotions amongst submitters, and amongst many, many liable parents throughout New Zealand. The submissions that came in were very critical of the Inland Revenue Department, very critical of the way the Labour Government has arranged collection methodology in New Zealand, and very critical that this bill will not solve the problems.

In fact, an authority, Judge Walsh wrote to Judge Boshier, the Principal Family Court Judge, regarding new Part 6B, inserted by clause 24—the part that allows departure from the formula assessment of child support, and is one of the major areas of the bill. He said: “After reflecting on the whole scheme of Part 6B, I am left with the impression it will be, effectively, a toothless provision.” It is a huge worry that the major part of this bill is judged by one of the practitioners who really know what goes on in courts to be a “toothless provision.” The purpose of inserting new Part 6B is to ensure that parents’ child support liabilities accurately reflect their ability to provide financial assistance for their children. We heard some pretty heart-rending submissions in regard to the way that, under trusts and various other mechanisms, liable parents can hide those funds.

I will take an opportunity to briefly respond to the two previous speakers. Firstly, I express appreciation to the previous speaker but one, Paula Bennett, the list member from my own area of west Auckland, who I think very honestly portrayed her level of interest and concern about the bill. It is an important bill and it really does affect the lives of a lot of children and a lot of families. I thank her for emphasising the common ground across all sides of the House—that we all care about kids, and that we all want to see parents meeting their obligations to kids; that is not in dispute. We are reasonable people but as in all things we can disagree, of course, about whether the mechanism proposed is able to deliver on that objective.

On that, I have two comments. The first is that nobody on our side of the House is suggesting for a moment that we should weaken people’s individual responsibility. However, I am reminded of a constituent who had got so far behind in his—and, yes, it was a he—child support payments that the sum amounted to several hundred thousand dollars’ worth of penalties and base debt, and he was on an income of about $30,000. There was no way, after tax, that he was able to save fast enough to offset the mounting penalties. He was bankrupted, his house was sold in a mortgagee sale, and his kids received nothing. Nobody won. The point is that some people can get themselves so far beyond the pale that there is no way back without the kind of measure proposed in this bill. Let us face it: I think Opposition members know in their heart of hearts that most parents, despite their circumstances, want to do the right thing for their children. There can be no more basic human instinct than that.

I draw attention to a couple of points made by the previous speaker, Dr Hutchison, who noted an apparent increase in debt owed by liable parents in Australia, and he somehow portrayed that as a debt mountain spiralling out of control. The interesting thing, of course, is that the reason the reported debt of liable parents in Australia has gone up is quite simply because we have referred more cases to the authorities in Australia for collection, because we have allocated more resources to that task, and because we recognise that that is a very high priority. I imagine that the Opposition—

💬 Dr Paul Hutchison: Why didn’t you do it in 2001, or 2000, or 1999?

Well, there we are; the member is asking why we did not do it earlier. That implies he supports this move. That is a welcome gesture of support, and I thank Dr Hutchison. But then, that no doubt means he would accept that part of the reason that reporting figure is going up is because we are doing the right thing.

The second thing to say is that the Australian authorities, partly at our urging, are gathering better information on the true level of the incomes of liable parents. That is enabling and empowering us to do a better job at cracking down on them. As I say, we have roughly doubled the amount of budgetary resource to allow the Australian authorities to make that crackdown, and we make no apology for that. Because, like with the Opposition, it is common ground here that liable parents have obligations, and that those obligations must be met.

At the same time, there is only so much pressure someone can be put under, and I ask members and listeners to reflect upon that case from my electorate—a quarter of a million dollars of debts and penalties, with a $30,000 income and $20,000-odd after tax. The situation was impossible; the numbers did not add up. Of course he should not have got into that situation, but hindsight is always 20/20. Parents do love their kids, and they do want to do the best for them in most cases. The few ratbags who do not want to will face the full force of the law and compliance action from the Inland Revenue Department—and so they should.

I want to take just a brief call on this part, but I say first of all that it is important to note the quality of submissions we received. I think a lot of us on the Social Services Committee discovered that aside from what this amendment tries to do, the most interesting thing that came out of the submissions was the distance we in this Parliament need to go at some stage—and I hope that that is in the not too distant future—to relook completely at how we calculate liable-parent payments and the mechanisms we use for payment, to take into consideration some of the concerns raised, by both liable parents and custodial parents, about the system as it currently exists. We need to look to other jurisdictions to see what they are doing, because some really innovative things are happening overseas that we could well learn from. Other countries are further down the track, in terms of the reforms they are bringing in.

However, those things being taken into consideration, we do need to focus on what this amendment bill seeks to do. I agree with the Minister, that although all of us have this nagging sense of injustice when we feel that people have been let off the hook, my understanding from what the officials told us is that something like half of liable parents are currently in arrears. This is a problem that, for some, is getting bigger and bigger. Some of them are in the situation where the debt is just not recoverable. They have got themselves into such a pickle financially that the tendency to walk away from responsibility becomes a great temptation. What this amendment bill is trying to do is to reconnect liable parents with their responsibilities, and with the department, so they can pick up their responsibilities and start paying once again, and to remove the barriers that would stop them doing that.

I share the concern that we are encouraging indebtedness and encouraging a reckless attitude towards being a liable parent. However, at the same time, we have large numbers of parents who are already in big trouble, many of whom would like now to pick up their responsibilities as their situation has changed, but are very nervous and anxious about the amount of debt they will have to service. When the interest they now owe is larger than the principal, we are into a bit of a nonsense. We are happy to support this bill.

I think it is worth noting the changes to Part 1 that the Social Services Committee has put forward. Firstly, we wanted to ensure that the mandatory write-offs of incremental penalties relate to the exact amount. There was this potential, prior to the work of the select committee, that a person who had his or her debt written off could end up in credit in a way that is, obviously, not helpful. We have changed clause 32, and put a new formula in place so that cannot happen. There is also an allowance for the offsetting of child support payments to be automated where both parents are liable for child support and one parent is in receipt of a social security benefit. That new technology is now available to the Inland Revenue Department, it can now start to use it, and I think that is helpful and positive. We have also included an ability to ensure that living allowances are inflation adjusted. Those are some very positive things.

Much of what submitters put before us that also needs addressing did not fall within the framework of this amendment bill, but, as I said earlier, they are fodder for thought. I hope that all social service spokespeople and committees within different caucuses will start to look very seriously at this. I think we all need to be of the mind to see some reforms in this area—certainly, United Future is.

I rise to speak on the Child Support Amendment Bill (No 4), and I will deal with Part 1, and clause 32 in particular. I would like to acknowledge my colleagues, many of whom sat on the Social Services Committee. I was not fortunate enough myself to sit on the committee. When we hear the submissions and hear the public speak, I appreciate the emotion and the honesty that come through. I applaud the comments of my colleagues today who have experienced that, together with their knowledge of the committee.

However, I have had a look at this bill and I have to agree with my colleagues. I think this bill is wrong. It is sloppy. It is flawed. I know that it does deal with situations where the commissioner may grant relief in respect of penalties that are payable by a liable person. Certainly, our view is that we do not support the premise that this clause will help by writing off about half a billion dollars of debt. We have to remember that half of that debt is from expatriate parents—people who do not reside in New Zealand. They reside outside New Zealand. They are not paying taxes. They have made the decision, for whatever reason, to isolate themselves geographically from their children, and by virtue of doing that have removed themselves from all responsibility for being a parent. I do not believe that this bill, at the stroke of a pen, will suddenly change these parents into responsible parents who will want to sign up to any type of contract and pay back the money owed. I believe that by their actions, which are loud and clear, they do not want to take responsibility for being a parent. I do believe it is simplistic to think that this bill will suddenly change that, when there is a clear action by these parents, half of whom have gone overseas.

I acknowledge the sentiment behind the bill. I think it is very laudable, and it is hopeful that it will increase the compliance of parents who are not currently meeting their child support obligations. But, again, I think that is being simplistic. Apart from being simplistic, I think it sends the wrong signal, and the legislation is also a little dishonest. I have already alluded to the legislation being flawed and simplistic. I do not believe that the bill will turn irresponsible parents into responsible parents. It is a sad fact of life that some parents, unfortunately, look upon their children as an appendage rather than as children who need to be nurtured and cared for. This clause will not make them into responsible parents. The problem goes much deeper than that, and legislation will not right that particular wrong.

The bill sends the wrong signal. It sends a signal to the parents who have paid their money on time and in full, and without getting behind: why bother? What is the point, when people can delay their payments and then do a deal with the Government and get some money off, and it is sweet? That is wrong. It discourages responsible parents, and rewards irresponsible parents. It sends the completely wrong message, and that is why I think the legislation is wrong and flawed. It says to the irresponsible parents that nanny State will look after their children, and that is wrong. This legislation will not change parents’ personalities or their obligations, at the stroke of a pen. It is simplistic to think it will.

I believe that this clause is not fair. I have a thing about fairness and being fair. This clause is not fair to other groups. I apologise if I deviate from the legislation, but we have to look at the situation of a family that perhaps has got behind in its mortgage payments and is about to lose the family home.

💬 Judith Collins: And paying taxes.

Yes, and they are paying taxes. Will this Government race to that family’s aid? I do not think so. I know of a private health contractor in Auckland that has got into difficulties with paying its tax penalty payments. It does a great job, by the way. It is one of those deserving little groups that just keep on going, battling away. Do members think the Government will race to its aid? No, I do not think so. This is all about fairness, and this is not fair legislation.

I will come to my last point. I think it is quite dishonest that this clause is attempting to disguise the fact that a debt is owed, and to wipe it away as if it never existed. Yet again, the hard-working taxpayer has to carry the can. At the stroke of a pen, half a billion dollars will vanish that could be collected, put back into the coffers, and back into the sector to help irresponsible parents to become good parents. The bill is not helpful. It is not dissimilar to the student loan scheme in the message it sends. Students borrow the maximum amount of money and there is no incentive to pay it back any earlier than they have to.

Thank you very much for the opportunity to take a call in this debate. New Zealand First believes that the Child Support Amendment Bill (No 4) is an attempt to take some action on this very difficult issue. This issue has needed to be addressed for quite some time, and when we look at what was reported in the Christchurch Press about the $281 million that is owed by Kiwi parents in Australia, I think that tells us that action needs to be taken. We are very aware that there are flaws in this current system, and other speakers have already pointed out many of them. We want to see liable parents encouraged in some way to take responsibility for the problem of child support. It is a big issue. To totally ignore the situation and not even think up any answer to this problem is not providing a solution for anybody. I think that is where we are at at this particular point in time.

I was very pleased to hear from the Minister that action is to be taken against those parents living in Australia. We know that if we leave this particular issue and there is total inaction on this problem, that is being totally irresponsible. We know that all the parties in this House—and I have heard many debates over the past two parliaments—believe that some sort of action is necessary, particularly where half of the liable parents we are talking about are in debt to the Inland Revenue Department.

This bill is some attempt to reconnect parents with their responsibilities. As the Minister has pointed out, this bill provides only limited relief and it is not the total solution for all of those parents. The arrears that responsible parents sometimes find themselves falling into do not mean that those parents are totally irresponsible—and I think that is in contrast to what we have heard from one of the previous speakers from the National Party. Non-payment of child support, which is what we are talking about, is a very serious and important issue. We know, too, when reading the bill, that this provides only very limited relief. I know that parents must still pay some of the arrears they owe, including some of the penalties. There is a provision in the bill for reviewing this particular clause if liable parents default on their obligations.

What we are really attempting to do in this bill is, basically, to acknowledge that liable parents are financially responsible for their children. In this case, it is better to get some money from those liable parents rather than no money. We need to encourage the compliance of parents who fail to meet their child support responsibilities. We know that both parents have a collective responsibility for their children, and it is always a challenge when this particular issue comes up. As previous speakers have said, it is a very emotive issue and a very technical issue. We know that, when it comes down to it, one parent is the loser in many of these cases, and we can only feel very sorry for them—but we definitely feel sorry for those parents’ children. We want the children to benefit from the full payment of the financial obligations of both parents.

So New Zealand First will be supporting this part. We believe that some action is better than no action. This bill might not be the perfect vehicle but it is a start in the right direction, and we can only applaud that.

I will make just a very brief couple of comments. The first is to rebut the contention that this is in any way a dishonest bill that seeks to hide debt. Frankly, I think that was a very unworthy suggestion, made by the previous speaker bar one. Of course, the bill does not hide debt; it does not even reduce debt unless it is repaid by the liable parent. So the only way that debt would go down is—and it is good news—that the kids have received the outstanding money. Neither does the bill hide penalties, because the penalties are not reduced on the Inland Revenue Department’s balance sheet unless and until the underlying debt has been repaid, and then only in keeping with the terms of the binding arrangement. If that arrangement is not met, the full penalties stay on the books.

In contrast, I would like to thank the previous speaker, Barbara Stewart from New Zealand First, who has, I think, stated the issue very plainly. This is a hard problem. It is hard emotionally. We are dealing with families at the most difficult and critical point in their lives—at the time of a relationship break-up. We are dealing with parents in trauma and kids who are displaced. Of course, if it was an easy problem, it would have been solved years ago. But at least, despite the emotional and technical difficulties of the issue, we are honestly trying to do something about it. I am not saying that this solution is perfect. The Social Services Committee did not think it was perfect, but it thought it was worth doing, and we have a solid majority behind getting this legislation passed.

I guess that my challenge to the Opposition is: if not this bill, then what does it propose? The job of an Opposition is not just to oppose but also, occasionally, also to propose a better idea than the Government proposes. Any Opposition that looks as though it may, one day, come into Government should be able to demonstrate to the public that it can think up policy and do policy. So far there has been no evidence at all from a single Opposition speaker that Opposition members have a single positive idea to contribute about how to solve this problem. I challenge them to tell us what those ideas are, if they have any. If not, frankly, they should put up or shut up.

Well, it is interesting. The Minister has said that this issue is about kids in trauma and that it is a hard issue, and he has admitted that he does not think this solution is a perfect one. Well, that really says it all, does it not? The Child Support Amendment Bill (No 4), which I rise to oppose, brings me to wonder what the main message here is. The purpose is, apparently—I think it is perplexing—to “increase the compliance of parents who are not currently meeting their child support obligations”. I believe that the obligations of a parent should be heartfelt. Personally, I do not believe that this bill will encourage any heartfelt obligations to be met.

How big is the problem? We have half a billion dollars in penalties and nearly as much again in original debt, so it is a big problem. But what message will the bill send? Well, the message being sent to liable parents is to hold off paying long enough and the Government will reward the people who have not paid, and if they ignore their obligations for long enough, the Government will feel sorry for them when they do not pay and send along a reward—a reduction in what those people owe. The message is being heard loud and clear. Retrospectively wiping debt—the liable parents’ debt—seems to be the flavour of the moment. That is how we could describe this bill.

What would happen, I might ask, if I was late in paying my tax and incurred a penalty? What would happen if I was late in paying my GST? Let me tell members that I know what would happen. One day I sent off in the same envelope two cheques for GST. I must have been in a dream when I filled them out, because I filled them out for the right amount, but I put one date on one cheque and another date on the next. I was wrong by 1 day—and I received a penalty. The cheques were in the same envelope and I received a penalty. Maybe I should have waited around a while in the hope that someone would bring in a bill that would mean the debt would be wiped, in order to encourage me to pay properly the next time. Really, the encouragement that I needed was just to pay up what I owed, which was that GST on the correct date. I learnt that lesson the hard way.

Liable parents visit my office, not to ask me how to avoid paying what they owe but mostly to tell me about how hard they are working to pay what they owe. They often talk about the fact that they feel they are paying much more than what they owe, and that it is not being credited to them. They are the very responsible liable parents who are forgotten about. They are not the ones who have almost a billion dollars’ worth of debt—half of that in actual debt and half in penalties. We have heard from my esteemed colleague Judith Collins about that $281 million worth of debt owed by overseas-based liable parents, and it is important that that money be recovered. We have heard from Paula Bennett that there are agreeable elements in the bill, and the Minister has praised her for bringing those forward.

But what evidence does this Government have that wiping the half billion dollars’ worth of penalties will, in fact, send any message other than “Get out of jail free”? That is the message this bill will send. If people doubt my use of the “Get out of jail free” phrase, I refer them to the fact that our jails are increasingly becoming more full of fine defaulters. That is what we do with other fine defaulters, yet these people will escape the responsibility of their debt. If they had paid their debt from day one, or whenever they could have arranged to pay it in the early days, it would not have become so insurmountable.

This bill was an election year creation, and the cynic in me says that it was to show that the Government was willing to tackle the enormous debt that had been identified by organisations other than the Government. I note that my colleagues have expressed some disappointment in the mechanism of this bill. I was not present in the select committee to hear the submissions, but I have heard, disappointingly, that the bill does not address many of the concerns that were raised by submitters to the Social Services Committee. I agree that supporting children is a parent’s primary responsibility, but I do not believe that this bill will necessarily bring that about.

As members have heard, National opposes the Child Support Amendment Bill (No 4). Although in theory the bill is designed to make sure that parents meet their obligations in terms of child support, we do not believe it sends that message. The whole issue of child support is extremely emotive and complex. It probably involves the most important and emotional flashpoints in one’s life: children, broken relationships, money, love, hurt, and being alone. Within that heady cocktail it is not easy to conclude what is fair and what is not fair when it comes to child support. But I do not believe that this bill is much help.

I believe that one of the most difficult things Parliament has to do when creating legislation is to identify the behaviour that it is trying to encourage. In this case it is straightforward: Parliament wants to encourage the conscientious payment of child support by liable parents. So, logically, we should reward those parents who pay consistently and penalise those parents who do not pay. That is plain common sense, and we all understand it. But in this legislation Labour is suggesting that we write off half a billion dollars’ worth of penalties for parents who have not met their responsibilities. Let us get this clear. The bill does not suggest that people who have paid consistently and well should get a discount for doing the right thing—absolutely not. Labour is suggesting that if someone does the wrong thing, then he or she should get the reward.

The fact that this Government needs to write off this debt at all reflects incredibly badly on its financial management and its slack attitude to the control of money. Every small business knows just how hard one has to work to collect debt, because however well intentioned people are there are always competing demands on their money, and unless debts are really closely monitored and consistently collected, they grow. Many small businesses have gone bankrupt because they have not collected their debts. In this case the Government has stood idly by as the child support debt has ballooned, as we have already heard, from $400 million to $1 billion over the last 5 years.

Now the Government’s strategy in collecting that debt is to write off $500 million. As many of us have already said, we struggle to understand the logic of that argument. I am not alone in that. The Rt Hon Winston Peters, in puzzling over this issue, has already asked why, if someone is not penalised for failing to pay his or her debts, that person would bother to pay them.

💬 Hon Member: Why is he talking on it?

I think that is a very good question. At that time David Cunliffe replied: “because parents should love their children,”. I think that is a good answer, but it is not very realistic in the face of a billion dollars’ worth of debt. Then Mr Cunliffe continued: “because this Government is not, and has never said it will be, wiping off all penalties—”. Yeah, right, Mr Cunliffe—only $500 million is being written off! And that is a real slap in the face for responsible, hard-working, conscientious parents. When liable parents do the right thing, nobody gives them another thought, but if they do the wrong thing—run out on their kids or skip the country—then old muggins the Government will bail them out. That is great lawmaking!

Unlike Labour, National believes that Parliament must send a clear, consistent, and an unambiguous message, which is that parents are responsible for the financial welfare of their children, because it is only fair that all kids get a decent start in life. National will work long and hard to develop a consistent and an equitable payment regime.

I move, That the question be now put.

Motion agreed to.