Support for Children in Hardship Bill

Speaking to Part 2, Part 2 amends the Education Act, and, I guess, basically brings it into line with what is happening to the Social Security Act changes, in relation to supporting children in hardship with the actual student allowances section of the Education Act, which, of course, we do support. It is making sure that anything that they were able to get via these changes—so the $25 increase—will actually apply to those who are on the equivalent student allowance. So we do support that.

I just want to say that we support in general the idea of parents not only being supported in a positive way to go back to work but also being supported to return to study. So we think there should be no difference in the amount of money that they are able to access for support if they are in study compared with, say, being on a benefit.

I will, though, just reflect on the Supplementary Order Paper that the National Government voted against that went through during Part 1, which is relevant to this—

💬 Matt Doocey: Ha!

—in many ways, Mr Doocey, because it is about support for sole parents to be able to go back and study. So let us keep in mind here that when we are looking at student allowances, student allowances can be approved only if the person is studying for 32 hours or more a week. They have to be in full-time study to access a student allowance. The difference here, I guess, is that when we are talking about the work obligations, the National Government is talking about 20 hours. What we were trying to say with the Supplementary Order Paper is that, actually, parents should be given the option of either studying for 20 hours or working part-time for 20 hours.

The National members of the Social Services Committee, in discussions on that, said that actually they can access student allowances, but they cannot access student allowances if they want to study part-time—say, 20 to 31 hours. You can get limited full-time study approval at universities, but, having worked there for 5 years supporting students, I know that actually this would not be a reason to get approval for limited full-time study. So there is going to be this small gap where, unless you want to go full-time into study, then you actually will not be able to access study at all once work obligations kick in, because the expectation will be that work obligations take precedence over everything else.

So that is a real concern for us, despite the fact, like I said, that we do support the amendments to the Education Act for the purpose of this bill. They need to be done because we do not want our students who are sole parents to be disadvantaged in any way. There were a few submissions that came through to the select committee that touched on the importance of this. One of those submissions was from the National Council of Women. It talked about how clause 10 amends various schedules, which is also reflected in an amendment to the Education Act 1989 to cover students with dependent children. The council’s concern was that students with dependent children would be covered. Caritas also pointed out the importance of ensuring that this allowance carried over to students who are supporting children.

The Child Poverty Action Group also pointed this out. The group noted the intention to allow student parents on allowances to access the $25 increase in benefit. The Child Poverty Action Group said that, given this intent, it was actually concerned that if this was done in terms of the $25 increase, there could be no justification for denying students the in-work tax credit for their children as well, which I think was a really interesting argument. I wonder whether or not the Minister for Social Development took that into consideration when reading that submission from the Child Poverty Action Group.

We had another submitter, Graham Howell, who talked about the importance of ensuring that this $25 was made available to sole parents on a student allowance. Law for Change, which represents a whole lot of students—a large number of whom, it says, are concurrently not only studying but supporting children—was pushing for the fact that this needed to be reflected in student allowances. I think it is still an area that we do need to look at. I know that the Government has made changes with things like the accommodation supplement, so that applies to students who are on student allowances and to sole parents. I have been told that there are still other areas—

Coming to Part 2, this amends the Education Act 1989, as my colleague Carmel Sepuloni mentioned, and also ensures, via a number of technical amendments, that adjustments made as part of the legislation do not allow duplication in Consumers Price Index adjustments.

I just want to come to that point. If I am reading Part 2 correctly, via using the regulatory impact statement, it talks about the way that generally, within the bill, benefit indexation and the annual Consumers Price Index adjustments will apply to this new $25 increase. I just want to reflect on the statements made in the regulatory impact statement. Paragraph 193 states: “Annual increases to benefit rates to reflect upward movement in the Consumer Price Index (CPI) were legislated for in 2010, and occurred prior to that by convention.” That is a point I think is important to make. So we legislated that Consumers Price Index adjustments would be made to benefit rates in 2010. It continues, saying “[t]he Bill does not amend the legislative requirement that base benefit and student allowance rates”—which are talked about in Part 2—“must be adjusted by any upward percentage movement in the CPI.”, so it does not change that legislation.

There was some discussion, as discussed in this summary—actually, I think it is the departmental report I am referring to, excuse me, rather than the regulatory impact statement. It states: “[i]ndexation to wages or relative to rates of New Zealand Superannuation as proposed by some submitters is outside the scope of the Bill.” We accept that. It states: “The Bill does, however, include benefit and student allowance provisions that specify the Consumer Price Index treatment of the $25 on 1 April.” This is the bit where it gets interesting: “On 1 April 2016 the $25 increase is effectively added after the annual CPI increases to the base benefit and allowance rates are applied. This means that on 1 April 2016 the relevant benefit or student allowance base rate as at 31 March is increased to reflect the annual CPI increase. The additional $25 is then added to form a new base rate.”

So for the next Consumers Price Index adjustment that we have on 1 April 2016, our base rate adjustments will occur and then the $25 is added to that base rate. So the $25 when it is first added will not have a Consumers Price Index adjustment made to it. Why is that? That seems like a bit of hair splitting to me. If the $25 is meant to be an increase to the base rate, make it to the base rate straight off the bat and give the whole thing a Consumers Price Index adjustment. Because if the Consumers Price Index adjustment is meant to reflect increases in the cost of living, then why would we exclude the increase in the base rate from that, when already, I think that it is fair to say, the $25 increase should have happened at the time that it was announced, rather than projecting it out to 1 April 2016? To then add insult to injury and not have that adjusted as part of the Consumers Price Index adjustment seems a little Scrooge-like from my perspective.

I would be really interested to hear from the Minister for Social Development what difference that made to the overall cost of the package. I mean, we already know that that $25 is affected by a range of other deductions. Surely—surely—the Government could have been generous enough to at least just allow that $25 to be included in that Consumers Price Index adjustment, if it is indeed a part of a base benefit rate.

And we certainly know that the Government has crowed about the fact that it calls this the first benefit increase in however many years. Putting aside the fact that that is actually incorrect—the first significant benefit increase was via the family tax credit as part of the Working for Families package. That was the last generous increase to the benefit rate. It might have had a different name, but it had the same effect. So if it is truly a base increase, then I would have thought that the Government would not need to be quite that Scrooge-like. I am interested in the Minister’s response to that.

But as Part 2, obviously, is talking again about the interaction between these different payments—Consumers Price Index adjustments and so on—I think that it is also worth pointing out some of the wider interaction between benefit provision, particularly for sole parents and our student allowance regime. Credit where credit is due—the Government has made some tweaks to the interaction between the student allowance regime and sole parent benefits to remove some of the anomalies, and I want to say to the Government that that was a good thing to do. Because we did have a situation for a while there, where, if you were one of the people affected by section 303 of the Education Act, if you were a sole parent but you were in study, so you were in receipt of a student allowance, your access to accommodation support was less generous, thus incentivising you to be on a sole parent payment. Then some of the requirements around the sole parent regime changed. That meant that you could not really study particularly and be on that regime, so it then forced you back on to that less generous support. So it is good that some of the accommodation changes have been made in that area to remove those anomalies.

But I would still like to point out that for the group of people who are affected by Part 2, who are in the category of being on a student allowance and might be in receipt of this base benefit increase—that is, people who are in study and have children—we do still see a situation where, for instance, parents who are eligible for benefit support but are studying have work-testing requirements on them that are just unrealistic and do not take into account the longer-term benefit for taxpayers, let alone for those families.

Let me give you an example. I had a case brought to my attention not too long ago of someone who was in study. They were studying to be a nurse, they had been in part-time work and on a benefit, and they realised that at that rate they were going to be on a benefit for a very long time and that that was not of use to her, her child, or to the State. So she transitioned into study, was able to still be in receipt of a benefit, but Work and Income pulled her in one day and said: “Look, we have found part-time work that you are obliged, by virtue of the age of your child, to be in, regardless of your study, and which we would like you to take up.” She pointed out that that part-time work, which from memory was in hospitality, clashed with her course work, meaning she would be unable to continue with her studies. Based on the legislative requirements for that particular individual, she was required to take up that part-time work obligation and withdraw from her study.

We would advise taking a longer-term view, for this bill in particular. For those individuals who are captured by student allowance payments or are in part-time study or what have you, if we take the longer-term view, that allows the discretion to say: “Regardless of any of the obligations set out in Part 1, if you are in study we take a broader view. If, for instance, we find some hours that the law actually would require you need to work, say in dishwashing, and that happens to clash with some study that you are doing that in 2 years’ time will mean you are not reliant on a benefit at all, then we will take some leniency in those situations.”

Because if the ultimate goal is to have someone independent, some of these part-time service industry jobs will not necessarily lend themselves to that. At that point we are in a position where we are cutting off our nose to spite our face. If the longer-term goal is assisting those in hardship and children in hardship, we know that well-paid, decent, stable work is the goal, not just work at any cost. We know there are a number of jobs where there is a significant amount of cost subsidy going on by the State to sustain people at an income level that means that they are able to support their children and to support their family.

So, in summary, Part 2—yes, it is a fairly minor part of the bill. The number of people who are covered by it are an interesting cohort who deserve greater discretion, but actually what they also deserve is a Consumers Price Index adjustment to their base benefit, and their base benefit, as argued by the Government, is meant to now include that extra $25. So why do we not treat it like that from the beginning and not just at a designated year that is convenient for the Government to prescribe?

I rise to take a short call to talk about Part 2; in particular, comments around the amendment of the Education Act. As already discussed, this particular part facilitates a matching $25 increase, achieved through regulations, to the student allowance rates for students with dependent children. We have, of course, promoted this to ensure that we do not create an incentive to move from study to benefit rates, to ensure that the support is provided for those who qualify whilst at study. There is also a consequential amendment—it was discussed in some part by the previous speaker—to provide that the student allowance Consumers Price Index adjustment is applied on 31 March 2016 and that that happens before the adjustment then occurs, the $25 increase, on the next day.

I think that does make sense. It is going to take us a little while, as the various official reports have suggested, to be able to get this package right—it is a large one; it is the largest, as has been said, for many, many years—to get the systems in place to enable it. So that 1 April target date, I think, is the appropriate one. This, as already discussed, is a relatively small part of this very large and comprehensive support package of over $750 million. The regulatory impact statement itself talks about this particular part being an extra spend of $1.8 million in 2015-16, rising to $6 million in 2017-18. So, obviously, in the context of the overall package it is not huge, but it is important to ensure that when you do something you do it right, and make sure that all the appropriate consequential amendments occur. In terms of the overall complexity of the systems change that this particular part enables, the regulatory impact statement again suggests that this is moderate—moderate changes to IT systems and processes to enable it.

We had some conversation about this particular part in our select committee deliberations—some submissions. Some have been referenced already. I do want to draw the Committee’s attention to a couple of submitters. Law for Change submitted on this particular point, and stated that by increasing support for students with children, education would become a more feasible choice for parents and, in their view, greater assistance to enable parents to attain qualifications will help to reduce welfare dependence in the long term.

We also had a specific submission on this particular part by the New Zealand Federation of Business and Professional Women, which was also supportive of the increase, quite explicitly so, as it would enable parents with children to continue to participate in the education system. If I could quote specifically from Caritas Aotearoa - New Zealand, again in respect of this particular part: “We also welcome the adjustments to be made to student allowances to ensure that children in those families have the same advantage.”

Overall, in terms of the submitters on this particular point, they were all supportive of the increase in the student allowance for students with children and the fact that it was mirroring the increase in main benefit rates. Most of the submitters were of the view that increasing support for students with children will help improve the long-term prospects of that particular family.

This is a small part of a comprehensive bill that I have huge pride in being able to stand in support of. It provides significant support for those who are most vulnerable. There is not crowing; this is a Government that focuses on those who are most vulnerable, and does it in a comprehensive, considered, and reflective way. I am sure that it will be appreciated by those who receive it. Thank you.

It is a pleasure to rise and speak in support of Part 2 of the Support for Children in Hardship Bill. This is the part that amends the Education Act 1989. As the previous speaker, Todd Muller, said, it is an attempt to make sure that the same payment exists for people whether they are in full-time study or whether they are in receipt of the unemployment benefit—or, in fact, whatever we call this thing these days; I think it is jobseeker support. It seems to have a whole range of different titles, but it is what we know as the support that people get if they have children—in particular, with this bill—and they have not got employment. It does attempt to actually get these two things lined up together, so that there is not an incentive for people to give up the future that comes with being in full-time study and instead go on another payment.

However, I do have to agree with the contribution made by Jacinda Ardern previously that it does actually show a very miserly approach from the Government to this particular part. Let us remember that the people who are going to be in receipt of this payment, which is described in Part 2, are people in the most dire hardship. These are families in the most dire hardship. The reality is that the $25 a week is not actually going to lift them out of poverty, because they are so far below the poverty line that they are not going to be lifted to being even close to getting out of poverty. So let us just remember it in that context, and then let us apply Part 2 to that, because, effectively, what it is saying is that people will get a Consumers Price Index adjustment to their student allowance before the $25 is applied to it.

I just want to quantify that a little. The Minister will have the actual figures, so I would ask her to share those with the Committee, but what is the impact of putting $25 on to the base rate first, before the Consumers Price Index is adjusted? At the moment, I believe, the Consumers Price Index is running at something like about 0.4 percent; it is certainly below 1 percent. On 1 April next year it will be expected to be running a great deal higher—well, we cannot look into that particular crystal ball and know, but let us imagine that it does creep up to, say, around 1 percent Consumers Price Index. One percent of $25 is 25c. That is, effectively, what we are quibbling over, here in Part 2. We are taking this debate up, quibbling over the people in the most dire need perhaps getting 25c, or less, more than if Part 2 was not there at all.

If Part 2 was not here, the impact would be that the $25 would be applied to the student allowance first, before the 1 April Consumers Price Index adjustment was made. I just want members opposite to reflect on that. We are quibbling about less than 25c, and it does not seem to me that that would be an awful lot to ask. But instead—I would hate to think how much time we spent on the officials getting the wording right to avoid that additional 25c payment, because it is going to happen once, and once only, and that is on 1 April next year.

We have already addressed that in the previous part, when it comes to the—what is it called? Is it called the supported living allowance? No—what is it called?

💬 Jacinda Ardern: The supported living payment.

The supported living payment, thank you. We have already done exactly the same measure for that, and now, in Part 2, we are applying it to the Education Act with regard to the student allowance. But in both of those instances we are talking about a tiny amount of money, and probably an awful lot of energy and time. It would be interesting to know the costings of how much time officials spent on coming up with this drafting to avoid that small amount of money.

I am speaking in support of the bill generally. I do not see that Part 2 actually adds much value. In fact, it takes away a small amount of value and takes an awful lot of words to do that. Maybe the Government thinks that it is somehow double-dipping, but in fact the $25 should be applied to the base allowance, and that should have the Consumers Price Index adjusted to it, as well.

It is a pleasure to take a call in this Committee stage of the Support for Children in Hardship Bill. I have got a couple of points to make on this small part, Part 2. The first is one of construction and drafting, and the second is a general point about Part 2’s interface with student support in tertiary education.

Firstly, it is a common feature of this debate that the Government’s moves here have been designed to give the impression of relief from poverty, rather than necessarily being the best-designed, actual impact. When we review the drafting of clause 12 in Part 2, we see, partly, how this smoke and mirrors is constructed. If I read from subclause (1), which inserts after section 303(3B) a new subsection (3BA)—and people at home may have an interesting time trying to follow this—this relates to beneficiaries who are on a student allowance. It is designed to transfer the $25-a-week increase to their allowances and to avoid double-counting, which you might say is a reasonable aim. But the way this is drafted is just—arcane would be the nicest way to put it.

It says: “Despite subsection (3B), if any rate of student allowance is increased on 1 April 2016 by regulations (regulations A), not being the regulations required to be made under subsection (3B) that come into force on 1 April 2016 [which of course are] (regulations B), then—(a) regulations A come into force immediately before regulations B; and (b) the adjustment to the rate of the allowance required to be made by regulations B is to the rate as at 31 March 2016; and (c) the amount by which the rate of allowance is increased by regulations A is added to the adjustment made by regulations B.” I am sure everyone at home has followed that—it is complete gobbledegook.

It may be logically and semantically correct, in that it does partition the time periods and applies the increase, but my goodness me, if this was a Government committed to plain English drafting and transparent policy, it has got to fail that test, unless everybody has got a PhD in legal semantics. But, of course, that belies the broader point, which is that this is a bill that, in the same spirit of obfuscation, gives and takes away at the same time. It ostensibly gives $25 a week, but, as our colleague Jacinda Ardern has rightly said, it would have been better to put that just straight into the base rate. As my colleague Sue Moroney has said, the net impact on poverty reduction is actually minuscule, and, therefore, this is a fairly expensive glossy public relations piece, but does nothing much to achieve its aim.

But I want to draw out the implication for tertiary education, because, of course, this applies to solo parents struggling—as I think we would all commend them for—to get a qualification so that they can get a job and get off the benefit. The fact is that some 90 percent of children who are in severe hardship are in solo parent families—single income families, and often beneficiaries. That is just the reality. We all know that costs for solo families are harder to afford. You have got only one income earner, but most of the same costs, such as the roof over your head, the groceries—kids eat a lot—school fees, uniforms, project costs, you name it. Now, of course, you really need a computer to take to school. So those costs seem to be going up and up and up, and parents are finding it harder and harder and harder. So that is one thing.

The second thing is that, in terms of this application in Part 2 to part-time students, there are going to be more people in that category, because we all know, in terms of the future of work, as has been studied by Labour’s Future of Work Commission, that jobs are changing. We are not going to see people with one career for the whole of their lives. We are going to see people with five, 10, 15 different jobs, just because the nature of the job market is changing. This is not to mention the fact that solo parents are often casualised, vulnerable, in part-time employment, with no protection from employment rights. The law changes under this Government have made that so much worse. Solo parents have become so much more vulnerable.

What is the Government’s answer to that problem? Well, it is right here—it is right here. You get the twenty-five bucks a week, but the solo parent now has to go to work when the youngest child turns 3, not 5—3 not 5.

Thank you for the opportunity to take this call on the Support for Children in Hardship Bill, in the Committee of the whole House. This bill is to support children in hardship, and especially children in low-income families. This is for benefit-dependent families and families dependent on student allowances. We know that two-thirds of children in material hardship are in benefit-dependent families, or in some kind of other benefit-dependent families. This is in the evidence that shows that we need to focus on those families who are on low incomes. This bill is to give an increment in the base benefit rate, after tax, of $25. In Part 2 it matches that increment with the student allowance. I am not going to list the things that people can buy with this $25, but I totally trust those families to make wise decisions for their children and their families.

This bill is a very fair bill because we are giving an increment in the benefit rate. We are also matching it for the student allowance because we do not want people receiving the student allowance to feel that they are being disadvantaged because they are on a student allowance. This increment will be achieved through regulations. This bill amends the Education Act 1989 to ensure that the increase in the student allowance rate is not subject to the annual New Zealand Consumers Price Index adjustment, which is on 1 April 2016. So this increase will be on top of that.

We want parents to be in education, we want parents to be in some kind of training, and then we want them to get into jobs. That was recognised by submitters during the select committee process. Submitters recognised that the employment of caregivers was an important factor in reducing the poverty and hardship of children in low-income families. Submitters also recognised that currently in New Zealand the poverty rates are the highest in families where no adult is in paid employment. It is important that parents are in education and some kind of training so that later on they can get into some kind of employment. It is good for the family—for parents and for children as well, in the long run.

I have heard a lot about the part-time work obligation for sole parents. That is actually a step in the right direction. We have seen the numbers, which show that when there is encouragement for sole parents, they do get into work. It is about providing the environment that encourages them and assists them to get into work. I have also heard the argument that different families have different kinds of circumstances, and sometimes children at the age of 3 are not ready to be at an early childhood education centre or a day-care centre. My opinion, as a mother of two children, is that children will never be ready if we do not train them. As a mother, I remember when I used to drop my boys off at the day-care centre. It was not easy for the first 2 to 3 weeks. It was not just me; other parents were going through the same kind of phase. We used to hide and watch our children. Once we were convinced that they had calmed down, we would go to work.

When I used to drop my boys off at the day-care centre, I would see some children there who were much younger than my boys. That gave me a sense of what those people felt about being financially independent. This bill is about helping people, encouraging people, to become financially independent. Childcare assistance—yes, it is important if we want people to get into training or education.

The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member. I will apologise because I think that at least one of the speakers before her went quite a long way off the point on this particular part of the bill. She is going further off it, and I would like to bring her back to Part 2 of the bill. Thank you.

Thank you, Mr Chair. Yes, I was responding to the previous speaker. Yes, Part 2 is about amending the Education Act 1989 and also matching the $25 increase through regulations.

The other thing that is related to this part is that it is important that we are fair with people—those who are receiving a benefit and those who are receiving the student allowance. We do not want people—those who are receiving the student allowance—to give up their student allowance and go on to a benefit because of the $25 increment that people are getting because they are on a benefit. This bill, overall, is to encourage people to get into training and jobs, and for that—

That was quite an interesting speech. I mean, I have got four children, and I would not say I ever trained my kids—

💬 Hon Member: Or chained.

—or chained—certainly before the age of 3. I think I understood what the member was saying, but I am not too sure.

I would like to speak to the amendment to the Education Act 1989 that is found in Part 2. One of the reasons I decided to jump up about this is that I am passionate about education. I actually think education provides opportunities for people where opportunities would not exist if they were not educated. I have a poster in my office. It is a quote from Malcolm X and it says: “Without education, you’re not going anywhere in this world.” He said that in 1963, and I think that is truer today than it certainly was a generation or two ago, when the Minister was just starting out in work.

The other thing I would also like to say is that we know the cost to society of someone who is on the unemployment benefit versus the contribution that that person makes when they are working. But the cost and the contribution are not necessarily measured just in financial terms; they are also measured in societal terms. Let me give you an indication of this. There is a whole lot of research out there that indicates that when parents are working in meaningful jobs—or in any job, I should say—the impact that has on the children is significant in terms of role models, in terms of quality of life, and in terms of all the things that children actually need in order to have the opportunity to be high-functioning adults as they mature.

I would argue that not only should there not be any differentiation between the unemployment benefit versus the student allowance but I believe there should be a significant benefit for people who have children and who have decided to go back to study. It is a massive—

The CHAIRPERSON (Hon Trevor Mallard): I am now going to interrupt this member and say that this is quite a narrow part of the bill. He is making a really interesting speech, as have previous speakers, that could almost be applied to the second reading, but it might even be out of order at that point. So I ask the member to come back to this part of the bill.

Thank you, Mr Chair. I suppose what I was trying to do was paint a picture.

This part of the bill talks about Consumers Price Index increases and how the Education Act must be amended to put this bill into force to allow that to happen. If you look at section 303(3B) of the Education Act, the amendment in clause 12 is inserted after section 303(3B) of the Education Act, and new section 303(6) says: “Subsection (3BA) is repealed on 30 April 2016, and this subsection is repealed immediately after.” But I suppose what I was attempting to do was highlight the importance of education to society, and just say that any changes made under any legislation, whether it be the Support for Children in Hardship Bill or any other piece of legislation before the House, should, I believe, take into account the overall benefits—not just the fiscal costs but the overall benefits—to society and to those children in hardship.

We are talking about student allowances here. We are talking about Consumers Price Index adjustments, and it is not a major amendment in this bill. It is not as if we are taking the Education Act 1989, which is, in essence, a very large piece of legislation that has been amended many times, and overhauling it. What we are, in effect, doing is taking just a little subsection of this to make sure that we do address the issues of support for children in hardship.

I do not think—and I think it is agreed by everyone—that there is a greater challenge in society today than supporting children who are in hardship. We had the Children’s Commissioner address some of the caucus members earlier on today. We all know that he is doing a fantastic job in terms of highlighting the issues of children in poverty and child poverty and doing what absolutely needs to be done to raise awareness and lift these children out of that. Education is a way to do that, and certainly education of the parents is vital in creating work habits that will lead these children to, you know, create work habits themselves, I suppose.

So I would have liked to see greater amendments being made to the Education Act 1989, to be honest. I would have liked to see the Government go a lot further. I would have liked to see a much higher incentive between the unemployment benefit and the student allowance for parents with children. The reason for that—

That was a very good contribution from my colleague Stuart Nash. Thank you very much, Stuart Nash. I just want to refer to the departmental disclosure statement for the Support for Children in Hardship Bill. That states clearly that: “The Bill also makes a number of consequential amendments that result from the increased benefit and tax credit financial assistance and extended work availability obligations. These changes”—as discussed by some of the people in the Chamber—“include: an amendment to the Education Act is required to provide that the Student Allowance CPI adjustment is applied to 31 March 2016 allowance rates before the Package increases to those rates are made on 1 April 2016.” As I have said earlier, and as I have pointed out, many of the submitters were supportive of this because they did not want sole parents who were studying to be disadvantaged in any way, compared with those who may be on the benefit and not yet in work or in study.

But there were a number of submitters who looked at this in relation to the in-work tax credits situation. Whenever this came up we had a number of submitters who also pointed out something needed to be done with tax credits. So we had the New Zealand Federation of Business and Professional Women Inc., which welcomed “the amendments to the Education Act that also allows an adult parent continuing their education, who is also classified as low income to be eligible for this payment of $25.”, but they “would also like to see this group of New Zealanders entitled to the same work tax credits as those not choosing to further their education.”

So that is really interesting because it is not just the New Zealand Federation of Business and Professional Women Inc. that supported that but also the New Zealand Council of Christian Social Services. It thought that “In the context of this bill it would be reasonable to assume the targeted children living in smaller households are more likely to benefit from any additional income received through the proposed policy levers.”—so the benefit rates being lifted by $25; Working for Families, $12.50; childcare subsidy, a slight increase there; and student assistance—“when compared to the same targeted group living in a larger household”. But it did point out that: “In short, the bigger the family/whanau the tighter the financial stretch across each family member.”

So the Education Act will be amended to ensure that the $25 increase goes to those sole parents who are studying, but the same issue is in place for those students—that is, that the bigger the family, the more children in that family, and the tighter the financial stretch. In fact, the New Zealand Council of Christian Social Services pointed out some research by Michael Fletcher, who is a senior lecturer at Auckland University of Technology. He writes in his analysis of the full package that “a sole parent family with two children will still be around $77 per week below the lowest poverty threshold measured by the Ministry of Social Development”, and that is something that I think we should all be concerned about.

Although the New Zealand Council of Christian Social Services supported the proposed increase to the benefit rate, it felt that it did have the potential to create more complexity in the system, which could undermine the intent of the Bill, so we need to take that into consideration. It also pointed out the fact that $22.456 million over 4 years is identified as the implementation cost of introducing the proposed changes—across the benefit system and across the allowance system. It highlighted that this came up in the regulatory impact statement and that this is really a substantive amount of public money that the New Zealand Council of Christian Social Services felt might have better gone directly to the children who are in need. So the New Zealand Council of Christian Social Services recommended that the number of children in a household be incorporated into—

The CHAIRPERSON (Lindsay Tisch): Tie it back to Part 2.

Yes, sure—so that it was not just a $25 increase for students on a student allowance who were sole parents with children or for sole parent beneficiaries; it was not just $25, in the amendment, that was given to them, but that it would be $25 per child. Obviously, that would have had an impact on Part 2—

The CHAIRPERSON (Lindsay Tisch): We are discussing amendments to the Education Act. That is what Part 2 is about.

That would have had an impact on the amendments to the Education Act, because we would not be amending it—

I move, That the question be now put.

Motion agreed to.

Part 2 agreed to.

Part 3 Amendments to Inland Revenue Acts