District Court (Protecting Judgment Debtors on Main Benefit) Amendment Bill

I raise a point of order, Madam Speaker. I know the Māori Party’s speaker didn’t speak before but we’re OK on this side of the House if she wants to give the speech now.

Does the Māori Party wish to take a call?

Aroha mai, we’re not speaking on this today. Kia ora.

OK, this is very messy, and it’s very difficult from the Chair to manage the calls when someone doesn’t take it. Very helpful if the party could please give the Chair notice of their intention so that we don’t have this confusion.

Yes, Madam Speaker, I’ll bring that up with my co-leaders. Thank you very much.

So just checking National aren’t taking their call, because they were after the Māori Party.

Well, this is the confusion because technically that was the Māori Party call, so now we’re up to call number seven, which is yours.

Thank you, Madam Speaker. Thank you for the opportunity to speak on the District Court (Protecting Judgment Debtors on Main Benefit) Amendment Bill in the name of my good colleague Duncan Webb.

Just acknowledging that this bill was originally in the name of Anahila Kanongata’a-Suisuiki, who had done a previous bill also in relation to debt on beneficiaries and had done some great work there in terms of bailiffs reclaiming things such as mobility scooters.

This bill limits the amount that creditors can deduct from benefit payments to 5 percent, and it’s really timely, as I think it’s been mentioned already today, that on a day where the Government is eroding the financial ability of beneficiaries in the future, that they’re also voting against this bill, which would seek to reduce the incidence of poverty by reducing the stress on beneficiaries. So it’s a double whammy today for anybody who is on a benefit, thanks to the members opposite who proclaim to be fighting the cost of living crisis.

This bill does so by amending the District Court Act 2016 to ensure that an attachment order on its own—that is, making sure it’s discounted any impact the deduction notice may apply to a judgment debtor’s earnings—cannot lead to a deduction of more than 5 percent of net earnings; a judgment debtor who is in receipt of a main benefit. I think it’s really disappointing that we don’t have the opportunity for this to go to select committee to hear submissions from those people who are directly affected by being on one of the main benefits.

Generally, as we’ve heard today, benefits are typically pretty tough to get by on as it is. When people get into financial trouble and they can’t afford large repayments, particularly in a cost of living crisis, it’s really important to give consideration and that’s what this bill does. Other jurisdictions in other countries prohibit entirely the attachment orders in respect of benefit payments. So for New Zealand this is an incredibly modest move. So, again, disappointing to see it’s not being supported to select committee when in other jurisdictions you have an outright prohibition on attachment orders. This would be a modest move and it would still require beneficiaries to carefully manage their finances.

The way that this bill would work—and its aim—is that there are absolutely no prohibitions right now in New Zealand on attachment orders being made against beneficiaries despite the limited nature of their income and their ability to pay. It would be a good way of ensuring that there is some protection in place, that people do not get into debt that is simply unable to be repaid and get into an endless downward spiral in terms of poverty and being unable to repay fines and reparations.

Some additional information that might be of use: in August 2023 a man who received $452.74 a week in benefits payments had $96 a week to cover off his own debt repayments. So, given the cost of what weekly rents would be, I think he’d struggle to find a one-bedroom apartment for $350 or $400. That leaves insufficient funds for food, for other main utilities, and generally for living. Then he had $30 a week taken for a private debt collector’s attachment order, $40 went to the Ministry of Justice, $11.00 to the Ministry of Social Development, and $15 in child support. He was left with $356 a week; $270 had to go on rent, giving him $86 a week to live on.

I think it goes to the point that those people in New Zealand doing it tough right now don’t need bills like this being voted down. They certainly don’t need a change to the way that benefits are indexed to make it even tougher for beneficiaries to pay their bills. If those members opposite think it’s OK to live on $86 a week, I’d like to see them try and do it themselves.

Thank you, Madam Speaker. I rise to speak with reference to this bill that’s before us, the District Court (Protecting Judgment Debtors on Main Benefit) Amendment Bill. I’d like to say that, like a few of my colleagues on this side of the House, I acknowledge the intention behind this bill, and it’s a good intention. And I’d like to say, despite this, we are opposing it. And I want to explain a number of reasons—but I’m going to focus on about three—why we’re opposing this bill today.

First, the bill, by way of synopsis, seeks to ensure that an attachment order on its own can’t lead to a deduction of more than 5 percent of the net earnings of a judgment debtor who is on a benefit. Now, the first reason why, I’d like to discuss, we oppose this bill is because the bill only affects attachments issued under the District Court Act, even though attachments and deductions exist in other legislation.

The second reason why I’d like to highlight that we oppose this bill is that there already is a mechanism in the civil court system where 40 percent of a debtor’s net income can be deducted. So, yes, there are mechanisms that already exist, so the court could change the amount of it if it thinks the debtor won’t be able to keep up with the payments. This is a mechanism that already exists, and either party can apply to vary this and to suspend or cancel the attachment order. This is a mechanism that already exists.

Now, the third reason I’d like to highlight as to why we are opposing this bill today is that limiting the amount the creditor can receive through attachment orders may also incentivise them to pursue other methods of enforcement. And we’re talking about methods such as seizing property. Now, while I studied law—and I used to work in the court system—there were a number of times that I came across people, defendants, that were going through the court system and one of the worst things that they could experience was having their property seized. And they used to come and plead—plead with the judges, plead with the magistrates. It’s something that affects their person in a way that we can’t describe.

So with this bill, even if we were to support it, there are those other mechanisms that exist, and so we oppose it for those three reasons amongst others. Now, I want to say this: Mr Webb, I understand, again, the intention behind which you are speaking to this bill. The National Party, we unashamedly align ourselves with the value of personal responsibility. You’ve heard it called around, and I know that people refer to it so flippantly on the other side of the House, but it is something we feel strongly about.

But personal responsibility for us, here, also comes along with being mindful of people’s circumstances, and when I look to what we are as a Government focusing on, we’re focusing on abolishing the previous Government’s prisoner reduction target, we’re focusing on stopping taxpayer funding for section 27 reports, and we’re focusing on enabling more virtual participation in court proceedings. This here—this bill before the House today—is a bill where there already exists mechanisms in place where people that find themselves in situations where it is hard to pay can apply for redress—for recourse rather. We do not support this bill today, as I said. I’ve mentioned three reasons why we don’t support it today. I acknowledge the intention behind the bill with the former MP that is no longer here, Anahila, but we don’t support the bill in this form today.

Thank you, Madam Speaker, and thank you for the opportunity to make a few words and some observations about the District Court (Protecting Judgment Debtors on Main Benefit) Amendment Bill.

I’d like to first acknowledge my colleague Dr Duncan Webb, whose name this bill is under; and also acknowledge all of the work that my previous colleague Anahila Kanongata’a did as part of her suite of measures that she put in place through a couple of bills that she was very successful in with the theme of alleviating the pressures and the undue hardships that various people faced, through no fault of their own often. She came up with these quite simple and quite functional ways of helping that reality.

So it’s very upsetting and quite disconcerting to hear that the Opposition aren’t going to support this member’s bill. I’ve listened to the debate and heard them talk about things like personal responsibility and incentivisation and “Why would we do this?” The intention’s good—everybody acknowledges the intentionality—but no one wants to necessarily take that further step and do something practical that helps someone.

We heard my colleague from New Zealand First emphasise, over and over again, “What about the victims of crime?” Although that, as Dr Deborah Russell acknowledged, could make up part of some of these judgments or some of these attachment orders, it’s in the minority. It’s worth a conversation, though, and that’s why this should be supported to select committee—so that the Justice Committee can hear from people and can make those considerations about how to take this bill and perhaps turn it into something that adds some heft to it.

While we’re talking about personal responsibility, we’ve heard from contributors today talking about, “Well, what about the responsibility for responsible lending?” Sometimes it’s just one of those things where the quickest and easiest thing is always to blame the person at the bottom of the pile. What about their responsibility to make sure that people don’t get into that debt? It’s not saying that those debts are forgiven. It’s not saying that those debts don’t matter. It’s just saying when we’re dealing with people who, by definition, are already almost certainly receiving the least amount of money that you can possibly live on, why would you take any more than 5 percent?

Because vulnerability begets more vulnerability, and there are numerous examples of how that works—it’s something that spins out of control. Through no fault of someone—as my colleague Dr Webb, when he opened his first contribution to this bill, said—people can take out loans, for instance, under totally different circumstances. Maybe they had a job, maybe they had circumstances in their lives that, for all intents and purposes, they fully intended to be able to service this debt. But sometimes bad things happen to good people, and it’s up to us to be able to put measures in place to provide those safety nets for people—of which this bill is one.

So I’m very disappointed—this bill harms no one, it’s a step forward to making a positive contribution towards the livelihoods and the lives of people who often are the ones that are most vulnerable in our society—that the Opposition won’t be supporting this through.

However, I think the previous speaker, Rima Nakhle, spoke of three reasons and tried to assume a catalogue of reasons as to why this wasn’t being supported. But the theme that I’ve noticed through the Opposition’s contributions today has been searching for excuses. None of it was particularly logical; none of it really stood out. The first contributor, Mr Garcia, spoke for about eight minutes before I realised he wasn’t going to support the bill because he outlaid what was a pretty logical sort of argument in support. But even then, they couldn’t quite cross that threshold to do the right thing.

So it’s very disappointing, but hopefully we will be able to continue this work and that the people on the other side of the House feel a little bit sad about the fact that they haven’t been able to provide this support. Thank you.

Thank you, Madam Speaker. I rise in opposition to this member’s bill, the District Court (Protecting Judgment Debtors on Main Benefit) Amendment Bill, in the name of Dr Duncan Webb. I congratulate him on his advocacy and the work he’s done. But we here on this side of the House believe that there are enough protections in place to protect our most vulnerable while balancing up their responsibilities in and around debt.

This District Court (Protecting Judgment Debtors on Main Benefit) Amendment Bill, first reading, comes to us this afternoon and we’ve had a lot of considered speeches from my colleagues Rima Nakhle from Takanini, Paulo Garcia from New Lynn, and from many others as well. But, fundamentally, we do not support it.

The fact is that the bill amends the District Court Act to provide that if the debtor receives a benefit, the amount deducted under the attachment order cannot be more than 5 percent of the person’s earnings. This is intended to help protect debtors on benefits from being subject to excessive deductions. But we believe that there are protections in place already. If you look at the District Court Act, it already provides for a protected earnings rate (PER) below which a person’s net earnings from all sources, including benefits, cannot fall after any deductions, including any civil debt attachment orders, and if you look at the District Court Act, it already provides for a protected earnings rate and the PER is set at 60 percent, meaning that no more than 40 percent of a person’s net earnings can be deducted. That protection is already in place.

And, of course, deductions can include a range of Government or court orders, including child support, tax administration, student loan repayments, Working for Families overpayments, benefit overpayments, recoverable assistance, and fines or reparation payments. These deductions have priority over civil debt.

We believe also that the fifth Labour Government introduced the Credit Contracts and Consumer Finance Act, or the CCCFA legislation, in 2003 during the Clark years, and then it was heavily amended in the Jacinda Ardern years and, of course, it’s unworkable for a lot of people having to present their Netflix accounts to their bank manager at the ANZ. But we know that it ensures that the most vulnerable Kiwis make more informed choices. That’s what it was aimed at and that’s who it is meant to protect, and to some way it is protecting them in a greater form. It’s just been an overreach by the previous Government.

But these people that are going to loan sharks, which are heavily monitored and regulated these days, know exactly what they are agreeing to. So we cannot take people’s financial responsibility as citizens away with this bill. It’s something that the National Party is embedded to—the financial responsibility of an individual—and it extends to everyone. This bill, we believe, will not encourage self-responsibility to those already in debt. It simply reduces the amount that can be recovered.

We believe, looking at our priorities as a new Government, that we’re focused on victims. The justice system is going to be switched around so that the focus stands squarely on the victim, not on the criminal. We’re focusing, again, on self-responsibility, on localism, and on individuality. As you heard during question time today, from an outstanding justice Minister, the Hon Paul Goldsmith, colloquially known as “Goldie”, we’re stopping taxpayer funding for section 27 cultural reports. We’re enabling more virtual participation in court proceedings, and we’re abolishing—aren’t we, I say to the member for Pakuranga—the previous Government’s prison reduction. I do not support this bill.

That, frankly, was an embarrassment—an underprepared member coming along, reading the bill, and talking from a list of points about things which are utterly irrelevant. If you’re going to come to this House, treat it with the dignity it deserves.

Let’s just think about what this bill does. This is a bill about beneficiaries—a 25-year-old on a single person’s jobseeker benefit is given $337 a week net. That’s how much they get: $337 a week. What I just heard members from the other side of the House say is that it’s OK to take 40 percent of that in attachment orders. That would leave them with $202 to live off—another punch down from that side of the House to those in poverty.

They’re cutting benefits already with their changes to the inflation adjustment and now this is a modest bill, and what do they say? “No, don’t worry about it. They can live on $202.” The member Paulo Garcia, as Dr Tracey McLellan said, spoke for eight minutes explaining why it was a good idea and then trotted out the National Party line: individual responsibility, it’s the debtor’s fault. Well, maybe Mr Garcia hasn’t had the misfortune to lose a job by redundancy, or fall sick, or have a car break down when you’re on a low income and have to borrow money to get the kids to school on time. Things go wrong, bad things happen, and people get into debt and can’t pay it back. But, no, he would have beneficiaries in poverty, children in poverty. We heard today that that Government’s actions will see 7,000 more children in poverty, and here’s a tiny thing they could have got on board with—not even asking them to pass it today, just to send it to select committee.

Dr Parmjeet Parmar talked about it being a disincentive to work—you know, as if someone getting $337 a week needs any more incentive to get out to work than that. Poverty is not a choice. Helping people in poverty is not some kind of charity; it’s giving them dignity and saying that having to repay 5 percent of that $337 is in some way freeloading is absolutely ridiculous and shameful.

Now, Mr Arbuckle probably had the most thoughtful comment, which was, essentially, “OK, how does this affect reparation payments for victims of crime?” Well, in fact, they’re administered through the Ministry of Justice, but that’s a decent question. It was the only sensible question from the other side of the House, and it’s a good question to put to select committee to make sure we strike the right balance there, so well done, Mr Arbuckle. I don’t think it should be a barrier. I don’t think it’s the hurdle that he thinks it is, but that’s not for this debate; that’s for a thoughtful and informed debate at select committee, which the people on the other side of the House have absolutely said isn’t appropriate.

As for the member Rima Nakhle, who seemed to suggest that 40 percent of a benefit could be deducted and that was all right, there’s already a flaw. Don’t worry; benefits are designed to be just enough to get by on, and we know that for many people in their circumstances, it’s not. So to take 40 percent of it away would not just tip them into a bit of poverty, it would be abject poverty.

Over on the other side of the House, they just shrug their shoulders and say, “I’m OK. It’s called personal responsibility. I don’t feel hungry; I don’t care.” What we have on the other side of the House is an uncaring Government who really doesn’t understand poverty and who thinks it’s attacking the drivers of crime when it’s increasing the drivers of crime. So it’s shameful and sad to see that this bill won’t see the light of day because on the other side of the House, they just don’t care.