Child Support Amendment Bill

Members, the House is in Committee for the consideration of the Child Support Amendment Bill. Before the dinner adjournment, or before the Committee was suspended actually, Dr Rajen Prasad had the call, and it looks like he wishes to continue. He has 1½ minutes remaining.

And a call to follow, I hope. As I was saying—[Interruption] The members opposite do not want to hear the arguments, and particularly the two members moving around the Chamber have not actually provided any explanations in this debate about why they have taken the views they have taken.

I was saying before the dinner break that no adequate explanation has been provided from Government members for not really taking the opportunity in the debate on this Child Support Amendment Bill to address the purpose of the bill. Particularly in Part 2 we do not see that addressed. The purpose of the bill is quite clear. It is to improve the fairness of the child support system, and to promote the welfare of children. That is why it is called the Child Support Amendment Bill. But we do not actually see that. We do not see fairness really being improved and the welfare of children being promoted in the way that this Parliament has an opportunity to do.

If the members opposite did internalise that, if the Government did internalise that, then they would write a requirement around the best interests of children, the paramountcy clause if you like. That was the consistent advice from all of our major Crown entities in this field—all of them. Yet there is no response to that. [Bell rung] Mr Chairman.

The CHAIRPERSON (Eric Roy): Dr Prasad.

What a wonderful call. Thank you, Mr Chairman. It was a shame that the members opposite did not take that call. When we really pushed—and I do not blame the officials for this because it is a Government responsibility—as to why was it so difficult to do, the answer was that the Inland Revenue Department did not have the expertise. It could have bought that expertise quite easily. When it is prepared to spend well over $100 million on the provisions of this bill, it is prepared to spend that on systems, and yet it was not willing to make that expenditure in order to get that result. I think what the Government did say in the end was that “Well, if we think it is a question we will ask the Children’s Commissioner to make some comments about that.”

So the Government did not really consider it from that point of view. It would actually have been an incentive to parents, to both parents, to both sets of parents, if indeed a requirement like the best interests of children was actually written in because parents, even when they separate, are interested in the welfare of their children. They are not interested in just paying the money over, which is entirely what this bill is about—just paying the money over; how, how much, when, what happens when you do not, and how to work out how much you pay—but if the Government had written in that type of clause it would have changed the face of the child support system because there would have been a requirement for everybody involved to consider what was in the best interests of children.

That, I guarantee, would have changed it, because we know that parents do not mind paying over their responsible part when they know that that goes directly to the children. That is when they are happy to do that, that is what all the evidence shows us, and that is what people before the Social Services Committee told us as well. So why was that principle not adopted in Part 1 of this particular bill? It was not. It was just totally blind to what this bill was about. I just do not understand why members opposite did not take that particular opportunity. It was too easily dismissed, and that begins to show us something about the attitude of Government members to the interests of children in every bill that comes before the House, and in particular this one. If it did it would have given serious consideration to what was recommended by the Children’s Commissioner. This would enable parents to pay directly—enable what they pay to be transferred to their children, if you like—or to promote the interests of the children.

That is a very well-thought-out policy. There are countries that actually do that. The Inland Revenue Department did give us the costings of that as well, and in the scheme of things, the scheme of raising people out of poverty, that was affordable in a country of this type. Yet there was no interest in doing that. Part 1 of the bill provides the opportunities to have it included, but it was not. So it looks as if price was the only consideration for members opposite.

I want to also turn to new section 14, in clause 9 of the bill. Here is a provision that relates to when the commissioner has to decide, establish, proportions of care, and how the commissioner is to go about doing that. New section 15 is quite telling, particularly when you go to subsection (5)—and paragraphs (a), (b), (c), (d), (e), and (f) have been excluded. Now it is to be done by the commissioner deciding the proportionality or the proportion of care that the parent gives: “on the basis of the amount of time that the carer is the person responsible for the daily care of the child.” That is the only principle.

The ones that have been taken out are quite telling because they go as follows—and this is how the responsibility for the decisions about daily care were to be made, how they were to be shared: who is responsible for taking the child to and from school, for example, and how decisions about the education of the child are made. There was a whole series of considerations to be taken in, and that is in the Act that is being amended. What that anticipated, if you like, was that there was a requirement to think through a bit more than just the proportions of care. That is one of the failings.

I want to take a call in respect of Part 1 of this Child Support Amendment Bill and refer to some of the particular concerns that the Labour Party has in respect of this part of the bill. You will have heard from prior speakers in the Labour Party that we thought there were some general concerns relating to missing an opportunity to put in the issue of child well-being as being a core object of the Child Support Act, which was raised by various submitters. I am not going to deal with that particular issue. I am not going to repeat that. I am going to raise a new issue, and that is the effects of the new 28 percent shared-care threshold in the legislation.

This legislation introduces a new threshold for the relative financial contributions between, normally, a separated couple—normally, a man and a woman—where the most common consequence is that the woman has day-to-day child-rearing obligations. At the moment the percentage of time that the child is with the other parent is higher than 28 percent before there is a diminution in the contribution from the non - main custodial parent. What this bill does is it introduces a new threshold of 28 percent. So effectively if a parent has 2 days’ care of a child per week, then there will be a different allocation of resource within that couple who are no longer together. As a consequence the amount of money that the primary caregiver who has the child for 5 days a week will decrease compared with the status quo.

💬 Sue Moroney: Mainly women.

That was the very point I was going to make. That is quite so. This is normally going to adversely affect women more often than it will adversely affect men. We, in this Committee, are trying to achieve fairness between people. We should also be trying to preserve the interests of the child, or giving primacy to the interests of the proper maintenance of the child who is the primary responsibility of the two biological parents in most cases. I am not convinced that this change does that, because what it will do is it will, in respect of some quite low-income people, result in a reduction in the income that is going to the primary caregiver.

The primary caregiver has a higher proportion of the bills and more often than not is going to have to pick up all of those incidental costs, which are essential as far as the well-being of the child is concerned but probably not viewed as essential by the authorities who count the numbers—things like school trips that are optional, or the occasional participation in a group event by the child, like going to the movies with their friends. Those are the sorts of things that are, effectively, a cost more often for the parent who has most of the care, because they are the parent who has the main responsibility for keeping a decent balance in the household and making sure that they do their child-rearing to the best of their ability and in the interests of the child.

Some of the examples that were given by the Labour Party in our minority report in respect of this included the fact that it is more likely that the primary caregiver will have more responsibility for dental, medical, and other treatments—especially dental. Medical treatment, admittedly, probably arises on more of an as-needed basis, and that could be at any time of the week, although, having said that, most people try to avoid the doctor at the weekend because it is too expensive to go at the weekend. It is more often the mother who will face those costs, particularly in the case of dental treatment. This is also true of clothing costs, of school costs, and of school clothing costs like uniforms. So Labour is not convinced that these changes are wise in that regard. I would like to hear the Minister in the chair, the Minister for Building and Construction, respond to that issue and explain how it is that this is going to be implemented in practice to ensure fairness between parents in respect of children who qualify for support.

It is a pleasure to rise—actually, it is a pleasure to rise in opposition to Part 1 of the Child Support Amendment Bill, because in standing in opposition to this, the Labour Party is standing up for those families who are most vulnerable and those children who are most vulnerable. There is no coat of whitewash—like white papers on vulnerable children—on this side of the House, but actually a really deep concern about a piece of legislation that is going to adversely affect children who live in poverty in this country.

The mechanism for this is in Part 1 of this bill. It arises in two main ways in Part 1. The first is the absolute opposition from the Government to actually include the fundamental idea that the object of this bill should be to protect the interests of those children first and foremost—first and foremost. That was not just overlooked by the Government but it absolutely refused to do that. It was asked by a number of submitters to do that.

Of course, the Labour Party led the charge on this. It was back in 2011—no, 2010, in fact—when Labour Party members said we were going to put children at the heart of all of our policy development. That has been backed up by the submissions on this bill by the Children’s Commissioner, by the Auckland Coalition for the Safety of Women and Children, by the Human Rights Commission, by the Families Commission, by the New Zealand Law Society—you name it, they said it. They came in behind the Labour Party to say that children should be at the core of this. Children clearly are not, because of the situation that David Parker just described where this part of the bill actually reinvents the idea of shared care. It lowers the threshold of what “shared care” actually means. It means that a parent who takes a child over the weekend now qualifies for a financial incentive to do so. My contention is that if we really had children at the heart of this, we would want—

💬 Alfred Ngaro: What’s wrong with that?

Well, the member Alfred Ngaro says: “What’s wrong with that?”. Here is what is wrong with that, Mr Ngaro: I want to know that there is a commitment to shared care from that parent because they want to be a good parent, not because they get a financial incentive to do so. That is what is so wrong with it.

I know that the Government believes in the market model of parenting, because that is exactly what it is exhibiting right now. It believes in the market model of parenting—that if you give them the financial incentive, they will suddenly become good parents. Well, on this side of the Chamber we do not believe in the market model of parenting. We believe in commitment to parenting—commitment because a parent cares. That is what is important, and that is what should be pursued through legislation like this.

It gets worse than that, though, because not only is the weekend parent, the 2-day-a-week parent, getting a financial incentive to be so but also the 5-day-a-week parent, the primary carer, the primary parent—I am not going to call them a carer; they are a parent—actually suffers a financial loss as a result. How is it in that vulnerable child’s best interest—or vulnerable children, as there may be multiple children involved—that the person they rely mostly on for their care and their security is actually at a financial disadvantage? How is that in their interests? It cannot be.

That is the main reason why the Labour Party is opposing this bill: it is all about Part 1 and the provisions contained in this part. We know that those women—and, yes, they are predominantly women—who are in that primary care role for those children are not living the sweet life. They are not living a wonderful existence where they have got money to come and go on. Most of those families are struggling to get by a on day-to-day basis, and along comes this miserable Government and makes it even harder for them. It makes it even harder for them, and it is not hearing the cries from our community up and down the country to fix child poverty.

It is well worth the Committee’s time to take a considered view of Part 1 of this bill, the Child Support Amendment Bill, because it is really at the heart of the bill. It is a very major part that covers the mysterious formula that Sam Lotu-Iiga either never read or cannot remember, and certainly did not want to table. I am very happy for Sam to elucidate to the Committee when he next takes a call as to how he believes this formula is actually going to work in practice.

What the Labour Opposition knows is that there are two core failings with this part of the bill. The first is that it embodies the missed opportunity to put children first, and nobody, I think, could have described that as well as Sue Moroney, who reinforced to us that families in this situation are struggling anyway. This bill has managed to score two own goals. It is going to cost the taxpayer, according to official advice, $42 million a year more to implement than the current law. So it is going to cost $42 million more a year to run, but it is going to put less money in the hands of vulnerable children. How can that be—more cost to the taxpayer, and less money to vulnerable children?

💬 Alfred Ngaro: They’re worth it.

Oh, they are worth it. Yes, they are worth it, National Government. Would it not be good if you did something positive about it?

It is not simply the matter of the complexity of the formula. In our last, pre - dinner break discussion in this part of the Committee stage, at some length we debated across the Committee the complexity of the formula; the difficulty couples would have in understanding where that left them; the reverse impact, in that it would thereby be harder for them to form voluntary agreements about their separation plans; and that, therefore, perversely, this highly complex and opaque formula would more often be needed precisely because it was hard to understand. Nobody is arguing that life is not complex or that it is going to be easy to write a law that satisfies the full diversity of family situations. What the Government has been saying is that, therefore, you should not be surprised if the formula is complex, but that does not necessarily follow. What we want is a formula that delivers more benefit to children in need, that does not lock liable parents out of the system if they get behind, and that provides the strongest possible incentive for liable parents to meet their child support obligations.

How does this bill measure up? It is not transparent. It has shied away from legislating for the primacy of the interests of the child. It has shied away from automatic pass-through so that liable parents know that every dollar that they contribute will go to their own children. It does not do that, and my colleague Dr Rajen Prasad has very eloquently pointed out that all the international evidence is that collections are improved if that is the case, but it does not do that. It does not put more money in the hands of the children. It does not simplify the system. It does not make it more transparent. It does not make it more directional. What it does do is waste an opportunity.

I used to, for my sins, be the Associate Minister of Revenue responsible for child support, before Sam Lotu-Iiga and his colleagues were members of this House. It was quite some time ago. I am—

💬 Dr Rajen Prasad: About 4 years.

No, no, no, it was probably longer than 4 years ago. But what I do remember is that the junior Opposition backbencher sent to bite me on the ankles at the time was one Judith Collins. She used to rail about the accumulation—I still remember the day that accumulated child support debt hit half a billion dollars. That was a terrible tragedy. And it was, because we do not want any arrears. We want all that money paid so that kids can benefit and the taxpayer is not copping it. Half a billion dollars. What is Judith Collins saying today, now that debt has reached $2.3 billion and has gone up a billion dollars on National’s watch in the last 3 years?

💬 Dr Rajen Prasad: Nothing, saying nothing.

Saying nothing. She is too busy working on her leadership campaign and getting around the backbench assuring them of all the awhi in the world. That is what Judith—and if you had any doubt about it, just ask the bad boy, just ask the bad boy Simon Lusk about it. No wonder she is not focused on child support—no wonder she is not focused on child support. She used to rail in this House that it was a travesty that the formula did not deliver for children. Seven years later the National Government has come up with—

I move, That the question be now put.