Child Support Amendment Bill

I move, That the Child Support Amendment Bill be now read a second time. The Child Support Amendment Bill is the culmination of a process that I began during the term of the previous Government to review and modernise the operation of the child support system. It follows a Government discussion document to which there was a wide response, and it represents the most fundamental set of changes to the child support system since its introduction in 1992.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Would members leaving the Chamber please do so, and show some courtesy to Mr Dunne, who is trying to address and inform the rest of us. Please.

The changes in this bill are about futureproofing our child support system, and recognising also the profound social changes that have occurred in New Zealand in the last 20 years. The bill proposes two main areas of change: first, a new child support calculation formula, which takes a greater account of shared parenting, both parents’ income, and the latest estimates of the cost of raising children; and, second, improvements to the payment penalty and debt rules for child support. These proposed changes are required for one very simple reason: the well-being of the 210,000 children and families who are currently involved in this system.

For the benefit of the debate, I want to briefly clarify what child support is and what it is not. Firstly, child support is not in itself a means of tackling child poverty. To engineer that is well beyond the scope of this bill. It has been suggested that where the responsible parent is in receipt of a benefit, child support payments should be passed on directly to that parent instead of being used to offset benefit payments. But the role of the child support system is not to decide what should be paid as a Government benefit. What the child support system does do is encourage paying parents to take responsibility for their children’s welfare by paying their liabilities in time and in full. The Government believes that this has to be the most beneficial way of assisting the families involved.

But I want to say this: the child support system is, and always has been, a backstop for families when parents no longer living together cannot themselves come together for an arrangement for the support of the children. Child support was never intended to be the automatic default position and nor should it be that. My strong preference is that when relationships break up, parents should be encouraged to make their own arrangements for the maintenance of their children, but I equally recognise that that is not always going to be fair or feasible in a number of cases. So it therefore is the aim of the child support system to ensure financial support for those children for whom those reasonable arrangements cannot be reached on a voluntary basis. To do this efficiently and accurately in today’s context, it is important that the scheme be updated. So the changes that are provided for in this bill make for a child support system where child support payments take account of a greater range of individual circumstances and the capacities of parents to pay, and take those into much better account.

This is important, because if the formula used to calculate child support does not fairly reflect today’s circumstances, it ends up affecting the very children that the scheme is meant to be there to financially support. In my view, the current formula is too blunt an instrument, which fails to take proper account of the particular circumstances of families. It can, for example, often leave non-custodial parents in a difficult financial position, often unable to provide the same level of comfort during access visits that a custodial parent can. It fails to acknowledge also that the custodial parent may be in full or part-time employment of their own—something that is far more common today than it was when the legislation was put in place 20 years ago.

Although it would be impossible to design a system to meet every circumstance, this bill does introduce a far more flexible system than that which we have currently. On the issue of calculating payments, I want to make the point that one thing this bill does not do is change the fact that families themselves are not expected to calculate the payments. That has always been the responsibility of the Inland Revenue Department, which will provide a calculator that will allow parents to check the amounts involved. So I can put members’ minds at ease—no one is going to be required to hire an accountant in order to calculate child support payments under the formula introduced in this bill.

The bill also introduces changes to the rules relating to the payment of child support, the imposition of penalties, and the writing off of penalties, to encourage parents to meet their obligations on time. They are the main features of the bill, but I want to make members aware that I intend to release a Supplementary Order Paper to this bill at the Committee of the whole House stage. That Supplementary Order Paper will introduce a practical measure that will allow a more accurate determination of parents’ income by broadening the time frame, or the window, during which an assessment of income is made. It will also contain a number of changes of a consequential or remedial nature to ensure that the legislation operates as intended.

In its consideration of the bill, the Social Services Committee recommended that the introduction of the main measures be deferred by 1 year, originally intended to be 1 April 2013, to 1 April 2014. I fully appreciate the anxiety that this delay will cause affected families. I know how keen they are for the legislation to take effect as soon as possible, but I do consider that the select committee’s recommendation is a pragmatic one, which takes into account the legislative pressures involved and the time frame that the Inland Revenue Department will need to implement the changes contained in the bill, and, therefore, I propose accepting that recommendation. At this point I want to acknowledge the work that the select committee did, and I want to acknowledge also the broad sweep of the recommendations that it made to further improve the content of the bill. I think that those changes, carried forward now into the legislation, make a difference to the bill and in turn will make a positive difference to the lives of the families and the children who are covered by the child support legislation.

So I am very proud to stand here today and once again commend this Child Support Amendment Bill to the House, and I look forward to its passage relatively soon, so that we can begin the work of reforming our system in a major way for the first time in 20 years, and making sure it is robust to meet the challenges of the future.

I rise on behalf of the Labour Party to oppose this bill, the Child Support Amendment Bill. Labour supported the bill to the Social Services Committee, to encourage thorough scrutiny of this sensitive issue. We are sorry to say that the concerns that we raised have not been met.

Nobody knows what cards life hands out to our families. Nothing has proved that to me more than a visit I made to a young family in Northall Road in New Lynn during my first election campaign in 1999. I met a young single mother with three primary school - aged boys who had returned from a doctor’s visit that she could not afford to pay for. Her youngest son was calcium deficient. She could not afford to buy milk. She could not afford to buy milk for a calcium-deficient son. She was on child support. The marriage had ended the year before—surprising to her and no doubt to those children. But the system that she faced was inadequate to meet the needs of her family or her. She was trying to study part-time as well as bring up those three young boys. When she told me her story on the driveway of that home in New Lynn, she wept—she wept. Every instinct as a parent told her that she was letting her family down, when she had done nothing wrong. She was working her guts out for those kids and the system had failed them.

This is our opportunity, as a Parliament, to fix the system. God knows the National Party has been saying for a decade that it needed fixing. We agreed it needed an overhaul, and this was the chance. The “Minister for Incremental Change” has served up a whole lot of tinkering, while 270,000 children grow up in our country in poverty, and 133,000 of those, like the three little boys in Northall Road, are the children of single-parent families, most of them dependent upon child support. And the system does not work. The Minister of Revenue knows it does not work. He was so defensive in his second reading speech a few minutes ago that he opened by saying the Government was not going to tackle child poverty—shame, Mr Dunne; shame, Hon Peter Dunne. This Government stands in this House with high unemployment, a declining median wage, million-dollar pay packets for civil servants and State-owned enterprise bosses while the value of their State-owned enterprises is trashed, widening gaps, and the worst economic record in 50 years, and it is not interested in taking this opportunity—

💬 Hon Gerry Brownlee: Why isn’t that member’s—

There is the “Minister for Big Noises”. Why do you not make big change, instead of tinkering, with this bill?

Let us for a moment—in honour of Gerry Brownlee—just recount what we do agree on in this bill. What is the common ground? Firstly, it is this: it is impossible for legislation to take account of every specific family circumstance. It needs to be flexible, it needs to be responsible, and it needs to recognise that all families are different. Secondly, it is common ground that the child support system does need a major overhaul, including a modernisation of the formula, but this new formula is neither transparent nor flexible, nor does it put more in the hands of the children who need it. So it is not doing the job. It is not fit for purpose. Thirdly, we are agreed that the system should preserve the opportunity for parents to reach voluntary agreements. That is good, if they can—fantastic. But too many do not, and too many do and then it is not honoured. But this Government has done nothing about enforceability. These agreements are still voluntary and do not carry the weight of the law, and there are too many dads who get behind in the system and then go across the Ditch to Australia to escape the consequences. It is common ground that the penalties system was too strong, so that when dads—and it is mainly dads, let us face it—got behind they could not catch up and they get locked out of the system. Then they run, and then they get separated physically and emotionally from their children, who grow up fatherless. But this bill does not address that. It is a missed opportunity.

It is common ground that New Zealand’s family law, above all, has had a wonderful, world-leading tradition of putting children first, but this bill does not. Indeed, I am told that the National members of the select committee voted against consultation with their own Minister about including in the bill a purpose clause that would have underlined the priority of the interests of the children. They would not even discuss it, Mr Brownlee, and you have the temerity to sit there—

The ASSISTANT SPEAKER (H V Ross Robertson): Order!

The member has the temerity—the Speaker has no temerity—to sit there preaching to the Opposition about the wonders of this bill.

Finally, it is common ground that fiscal responsibility is important, but this bill costs the taxpayer $42 million more per annum than the old system but puts nothing more in the hands of children. God, that is brilliant, is it not, Mr Brownlee—$42 million more out of the public purse; nothing more for kids. There are 270,000 children growing up in poverty, and 133,000 children growing up in single-parent families, most of whom are dependent upon what we are discussing today. A population bigger than Dunedin, bigger than Hamilton, is depending on this bill, and Peter Dunne tinkers while their lives burn.

There is nothing new about this. Here is a quote from 2005: “Writing off debt sends the worst possible message to absent liable parents.”, she thundered. “Those who do the right thing and pay their way will be left wondering why they bothered.”, she screamed. That was the Hon Judith Collins railing against the accumulation of unpaid child support debt, and when she did it was less than $1 billion. It was $1.3 billion when this Government came into office. Guess how much it is today? It is $2.3 billion. Those members have presided over a $1 billion blowout in child support debt, and they tinker with the system, rather than overhaul it.

The people of New Zealand are so sadly disappointed in this Government. They did have hopes for it and they are rapidly getting over that fallacy. They hoped that this would be a Government with a heart, a Government that would listen to families and whānau and communities and that would build on their good ideas from the bottom up, not tell them how to live their lives from the Beehive down. Well, that was a sad, forlorn hope, was it not? The Labour Party believes that, above all, this bill represents a lost opportunity to address the well-being of children in vulnerable families. The Government has had years—years—to address those issues and to ensure the bill provided a fair way forward. The consultation process took it years, but the Minister has just told us he is introducing amendments in this House that have never been to the select committee. A 2-year consultation, and he cannot even get them to the committee on time! Despite all of that time, the Government has failed to provide an improved system that is transparent, fair, and flexible and that will address the situation of the 133,000 kids growing up in poverty in single-parent families, most of whom are dependent upon child support. Yes, we needed the penalties regime adjusted. Yes, we needed more flexibility. Yes, we needed to put children first. But, no, this bill does not deliver. Thank you.

Debate interrupted.