Child Support Amendment Bill (No 4)

Hon PETER DUNNE (Minister of Revenue) Link to this

I move, That the Child Support Amendment Bill (No 4) be now read a third time. The main feature of this bill is its aim to get back into the system those parents who have stopped paying their child support. That is its most controversial feature, and I will comment on that in some detail.

At the moment, we have about $1.1 billion in outstanding child support liability, and $651 million of that sum is penalties that have been imposed on outstanding principal, of around $450 million. The problem is that in many cases liable parents simply stop meeting their obligations because the penalties have become too great. The consequence of that is that no child support is payable, and the children who should be benefiting from it suffer. So what this bill says, in effect, is that where parents seek to reactivate those outstanding payments, there will be a provision for a write-off of certain of the debt obligations. The logic here is that it is far better to get those parents to pay something towards the welfare, upbringing, and upkeep of their children than the current arrangement, where many are paying nothing. That was the major point of difference between the various parties as this bill progressed.

But I want to make this point clear. None of the $651 million in outstanding interest and penalty payments will go to the children. That is revenue to the Crown, if it is ever collected. The logic here is that it is far better to get the lion’s share of the $450 million that is outstanding child support going to the parents and the children, rather than concentrating on the $651 million that will never be collected and will never go to the children anyway.

That is the major change that this bill introduces. It is a significant step forward. It will mean a reduction in the level of outstanding child support, as those penalties are written off. It will not be quite as generous as some have advocated for—that we are about to cut the debt in half. But the Inland Revenue Department will be monitoring these new arrangements, and any that are entered into under this bill, to ensure that the parents who commit to those arrangements meet their obligations and stay on track. The powers in this bill will not be exercised lightly.

But I come back again to the point. At the moment, the one group that suffers from the build-up of debt and the fact that people simply opt out of trying to meet their obligations is the children. Whatever one’s view of the dynamics of family break-up, it is vital that the kids are the ones who get the recompense and the benefit, and that is what this legislation seeks to achieve.

The bill also contains some other measures relating to the overall stability of the child support system. It strengthens the Inland Revenue Department’s ability to investigate liable parents who deliberately structure their financial affairs to avoid paying the proper amount of child support and to get exemptions from the child support system. That has been a bone of contention for a long time. There is a sense of great injustice on the part of custodial parents that liable parents are structuring their affairs in such a way as to avoid their obligations. This bill gives the Inland Revenue Department greater authority and greater power in terms of investigating those situations, so that those parents can be brought to book and ensure that their liabilities are met.

I mentioned that the bill contains a couple of new exemptions. The first is a temporary one for young parents for whom it is still compulsory to be at school. It is clearly impractical to impose child support liabilities and responsibilities on children who are still at school and not in a position to be earning. The second exemption is a far more serious, important, and permanent one. It is for the victims of sexual offences, when a child has been born as a result of a sexual crime. Again, in those circumstances the imposition of a child support liability has been unjust, and this matter will now be resolved by those provisions.

The remaining measures in the bill are largely administrative in nature. They include new appeal rights following an administrative review, and giving priority to payments owed to custodians over payments owed to the Crown. That will be a particularly important step forward also.

This bill was introduced some months ago. It has been considered carefully by the Social Services Committee, and I pay tribute to the members of that committee for their consideration and for the amendments that they brought forward to further improve the bill as a result of their hearings. I also thank my officials in the Inland Revenue Department, the draftspeople and those who have worked on the detail of this legislation, and the members of the public and the various family specialists who took the time to make submissions to the select committee and to lobby individual members of the committee on this matter.

Child support is a vexed and contentious issue, and will remain so almost permanently. There will be refinements and changes over the years, but the fundamental point will never be able to be escaped from: when parents become parents, they accept—in the case of child support legislation, until the child turns 19—ongoing responsibilities. Whatever the subsequent status of their relationship, they must meet those responsibilities, and they must honour their continuing obligations to their children. This bill is a practical step forward in terms of enabling the money to flow to the children, who will benefit. Where parents do get behind with their payments, the bill gives them the capacity to enter into repayment regimes, which means they do not end up simply defaulting altogether.

Finally, I thank the members of the House who have contributed to the debate at various stages. I know that it has been a fraught debate, but it has also been a useful one, and I acknowledge the contributions made from all sides. I commend this bill to the House.

JUDITH COLLINS (National—Clevedon) Link to this

Thank you, Mr Assistant Speaker, for the opportunity to speak on the Child Support Amendment Bill (No 4). I thank the Minister for his very gracious comments about the members of the Social Services Committee and the work we did on this bill.

This is not a perfect bill; it is not even a slightly perfect bill. It does have some good points in it, and I will just briefly mention a couple of those. One is the exemptions, which the Minister has mentioned, and the other is the ability of the Inland Revenue Department to look beyond the declared income of liable parents. The department will be able to look further into those parents’ assets and their ability to find or have access to money, and that, hopefully, will indicate their real paying power. Certainly, I am one of the many people in this House who come across parents who may have, for example, $150,000 incomes, but who have restructured their incomes so that in one particular case a parent is paying just $30 a week towards the upkeep of the child. I personally find that a disgrace and I am sure the Minister would agree.

What we have, though, in this bill is something the National Party has spoken strongly against—that is, the write-off of $600 million worth of penalties. We are against that for this reason. The Minister said he would rather have people pay to the children the $400 million they currently owe in direct child support, and that the $600 million will really go only to the Crown—I think that was the general thrust of what he said. Well, here is some news for the Minister. It is my child, it is the children of other parents in this House, and it is the children of other taxpayers who are already paying that bill. They are the ones who are paying up, right now, for the delinquent parents who do not take their obligations as parents seriously.

I have had enough of people turning up and telling me about what good parents they are, yet also telling me on the other hand why they should not be meeting any of the costs of their children. I think that those people need a fairly good, swift kick—metaphorical, of course. People who behave like that are a disgrace. When those parents are men, they tell me they are men but, frankly, I do not think they are, because men who have pride do not behave like that towards their children and towards the mothers of their children.

Having heard the Minister talk about the debt and the amount owing in penalties, I would also like to point out a very, very salient fact. It is that 65,000 of the parents who pay the liable parent contribution—that is, about half of them—pay no more than $14 per week towards the upkeep of their own children. And that amount is not per child; it is for all their children. So, for instance, if they have six children with three different mothers, they have to pay only $14 a week in total towards the upkeep of their children. As any responsible parent can tell us, that amount is nothing towards the cost of bringing up a teenage child or a preschool child. It has nothing to do with the real costs of raising children. That is one of the reasons so many custodial parents who are good mums and dads have to say to their children that they are sorry but the children cannot play a particular sport, because their parents do not have the money. That situation happens because of liable parents who pay only $14 a week.

Then, out of the 65,000 men and women who are paying only $14 a week towards the upkeep of their own children, 44,339 are not even making that payment of $14 a week. They are in debt. Those are the people for whom we will be writing off penalties tonight because, apparently, they cannot meet a payment of $14 a week. If they cannot meet a payment of $14 a week, what are they doing going around becoming fathers and mothers when they have so little sense of responsibility? I do not believe for a moment that those people cannot meet a payment of $14 a week. That is an absolute disgrace—but we sit here in this House saying that it will all be better because, somehow, those people will become more responsible towards their children. I do not believe for a moment that writing off the debt of the 44,339 people who are not even paying their $14 a week towards the upkeep of their children—in one case, 11 children—will mean that suddenly those people will have a conscience because we have said we will write off that penalty. That simply will not happen.

I do not understand why a United Future Minister of Revenue, Peter Dunne, is saying that we will write this debt off—that we will get soft—when in his own party’s policies he has some good policies about child support. United Future members have said they will stop those delinquent parents from leaving New Zealand. We in the National Party agree with that. We say: “Good on you!” to those members. If we can stop people from not paying their parking fines as they leave the country, then why do we give them a free wave through and say: “Goodbye, haere rā, and we will see you next time.”, when they do not meet the cost of looking after their children—the pathetic cost of $14 a week? I do not understand why Peter Dunne is supporting that. I do not understand why this bill has the support of Peter Dunne and United Future members, who have said very strongly and properly that they will look at the real costs of looking after children—at why it is an issue, and at how we can actually get a real costing around that. Yet, here we are tonight, debating a bill where we will write off $600 million in unpaid debt. We are sending the message to those $14-a-week dads and mums that they do not need to bother too much, because eventually the debt will become too high and we will write it off again.

I am here to tell the House that the National Party will not support that sort of delinquency coming from parents—particularly when it comes from parents who should know better. There are parents with four or more children who are not even paying $14 a week towards their children—769 of them. There are 25,768 parents who are not even meeting the payment of $14 a week for one child. And the message we send to the good mums and dads who meet their payments, and to those who struggle to meet their payments but do their very best to do so, is: “Well, you are a bit of a mug, aren’t you? Why are you doing that when your neighbour down the street doesn’t have to?”.

Frankly, I am so tired of listening to fathers’ groups that go around and protest outside MPs’ houses and judges’ houses, and try to bully them. Well, they have met their match in the National Party, because we will not be bullied by that sort of behaviour. People in those groups tell us that they care about their children. If they cared so much about their children, I ask why my child, the children of every other parent in this House, and the children of every other taxpayer, are paying for those fathers’ children, and going without the things they could have because there are parents who do not care about their own children.

I know there will be people who say some parents do care but simply cannot meet the cost of child support payments, because often they have other children and new partnerships—multiple partnerships. Well, I am here to tell those people that before they enter into new partnerships they should think about the children they have, and they should think about the liability and responsibility they have. I make no excuses for those people. They come from all walks of life. It is utterly wrong for us to think that the only people who do not pay child support are those who do not earn much money; many people with a lot of money take great delight in hiding their income for that very reason.

I am glad to hear that the Inland Revenue Department will be able to look at that. But the trouble is that at the select committee, department officials told us, in relation to a very worthy case we discussed with them, that they could not necessarily determine whether they had even looked into the situation. So the problem I have with this legislation is that it is too soft on people it should not be soft on, and it is just not good enough for the good custodial parents out there and the really good liable parents who pay their way and look after their children—who, as much as they say they love them, look after them that way.

JUDY TURNER (Deputy Leader—United Future) Link to this

On behalf of United Future I rise in support of the third reading of the Child Support Amendment Bill (No 4). When parents separate and have to parent their children while funding two households and the additional costs incurred by access arrangements, things can get pretty financially tight and be pretty emotionally stressful. At the Social Services Committee we heard from parents who felt they were anonymous funders, liable, and lonely. We heard from parents who received the minimum liable-parent payment from ex-partners who skilfully used business mechanisms to hide income. We heard from those who wanted both parents’ income taken into consideration, and those who wanted calculations to more accurately reflect the time spent with both parents. We also heard from some who were burdened with both liable-parent payments and the costs of the new or reconstituted families they now supported. A number of submitters wanted evidence of how their liable-parent payments were spent, with many believing they were funding their ex-partner’s exotic overseas holidays or drug habits rather than the children whom the money was meant for. At least one submitter wanted there to be an upper limit of liability for each child.

But for me one submitter stood out from the rest. He was a dad who had never ever before considered making a submission to a select committee. He was so passionate about his experience and the conclusions he had come to regarding liable-parent payments that he was motivated to drive for hours to come to Wellington and appear before us. He is the custodial parent of his two girls. When his relationship disintegrated and battle lines were drawn, he came to the realisation that no one was going to win in a war that was about to erupt over the care arrangements for his children—least of all the children.

He proposed an alternative approach that involved him being the primary caregiver, but with his children having both scheduled and spontaneous contact with their mother whenever they wanted. At his suggestion, and by mutual agreement, no money would change hands. His comment to the committee was: “I feel that if anyone should pay, I should be paying my ex-wife for the privilege of being the primary caregiver.” His story serves to remind us that financial concerns should never be allowed to create barriers to a parent-child relationship, and removing barriers is exactly what this bill is all about. However, the liable-parent payment system is well overdue for a serious rethink.

These are some of the questions I think need to be part of that consideration. Firstly, does the Inland Revenue Department’s current formula for calculating payments undermine the opportunity for more equitable financial arrangements? Secondly, when the Inland Revenue Department makes a mistake in its calculations, how easy is it for the mistake to be remedied? We heard that it is very difficult. Thirdly, should the cost of access be factored into the formula? Fourthly, can we devise a more flexible sliding scale when counting the number of days children spend with each parent, instead of the current 40 percent contact that is required when calculating liable-parent payments? Should both parents’ economic position be taken into consideration when support is calculated? Should custodial parents have to give some sort of account for how payments are used? Does the benefit system need to develop more flexibility so that more equitable parenting orders can be designed and implemented?

These were all questions raised by submitters that were unable to be dealt with in this amendment bill. But United Future believes that we need to look closely at the reforms that are now present in other jurisdictions, to see whether we can learn from others. We need not allow this amendment to be the end of the matter.

Let us be very clear that parental responsibilities do not diminish because the parent to child relationship has disintegrated. Parental responsibilities do not reduce because two households are involved. Parental responsibility does not shrink in any way because parents have repartnered, have reconstituted families, or have had additional children to a new partner. Unless there are extenuating circumstances, children have the right to have meaningful contact with both parents. We need to be mindful of all those considerations as we move beyond this amendment bill and start to look at how better we could be implementing a system that serves the interests of, firstly, the children but, secondly, of both parents.

I do not think any of us, having heard the evidence in the select committee, would quibble about the fact that the current legislation as it stands, even with this amendment bill, which is an improvement, serves the needs of the people it claims to. So United Future will support this amendment bill.

I was very pleased to hear the Minister, the Hon Peter Dunne, talk about the discussions he had just last week in Australia with officials who have already engaged in a round of reforms on this matter. He has had serious discussion with them, and United Future is intending on making sure that Cabinet seriously considers the need for some reforms that are long overdue in New Zealand. However, we are very happy to support the third reading of this amendment bill.

ANNE TOLLEY (National—East Coast) Link to this

I must confess to being a little sad to have to oppose a bill that purports to address the difficult area of ensuring there is adequate support for children in this country. This issue is at the very heart of National’s values, and I know the belief is shared across the House that every child has the right to parental support, and every child has the right to receive support from a mum and a dad, no matter what the adults’ arrangements might be. I support the moves in the bill that will allow better scrutiny of liable parents. As Judy Turner said, the Social Services Commitee heard some excellent submissions from people who came with stories that showed that the machinations of various liable parents meant that the only ones they were really hurting were their own children. I regret that the bill was not even able to expand its focus in order to look at the circumstances of both parents of a child or children.

But the aim of the bill is to increase the amount of child support. Again, that is an admirable aim, and the Minister said tonight that the aim was to get more liable parents paying their child support. But the philosophy of this Government, in backing this bill in the very narrow form that we have in front of us tonight, is that if penalties are written off, more people will pay their child support. We have $1.1 billion outstanding from liable parents. I was astounded to read figures obtained from the Minister and released yesterday by our welfare spokesperson, Judith Collins. Those figures showed that the amount in arrears has more than doubled, and the total amount owed, including penalties, has almost tripled since the year 2000. Yet the number of liable parents has not grown exponentially.

So we have before us the example that the same numbers of parents, more or less, have not paid their child support and allowed their arrears to accumulate, and this Government brings a bill before Parliament that says that if it wipes off those penalties and arrears, then those people will start paying child support again. I cannot support that philosophy, and throughout the process I asked for that to be substantiated by officials and by Government members on the Social Services Committee. They have been unable to do so. In this third reading, before the final passing of the bill, I hope Government members will stand and explain that philosophy to the House. How does it work, when we have people who are deliberately not paying their child support and are told not to worry about the debt? How does it encourage them to pay child support when the Government is saying they do not need to worry about the debt, because the Government will write it off?

One of the reasons the Government has given is that the penalties become so overwhelming that people just cannot see a way out of the situation, so they skedaddle to Australia. The chartered accountants came before the select committee with a very practical piece of advice as to how we could address the accumulation of those penalties. They suggested that instead of a rate of 2 percent accumulating on those arrears, we reduce it to 1 percent. The officials rejected that advice. But I thought it made sense, because there was still a punishment for not paying child support, but not at such a rate that huge amounts of arrears were accumulating. Maybe I am cynical, but I have to question whether the advice was rejected because 51 percent of the money paid in arrears and penalties on arrears is now kept by the Government and only 49 percent makes its way back to custodial parents, whereas in 2003, 70 percent was paid back to custodial parents and only 30 percent was kept by the Government.

There is very good evidence to show—and, as I said, the figures that Judith Collins released yesterday also show—that more and more liable parents are ducking their responsibilities and refusing to pay. Of course, we know that the amount owed by expats in Australia has ballooned to $280 million - odd. That figure is four times what was owed in 2003. Yet the Government brings in a bill to try to get those parents to pay what they owe, which does not really address that issue in any practical way, other than saying they do not have to worry about paying the penalty and debt they owe, because the Government will write it off on their behalf.

Finally, I echo what Judy Turner said in her speech. There was a wide range of submissions, and some excellent submissions, made to the committee. The most disappointing thing for me during the passage of the bill has been that this Government has had 7 years to address some of the issues around the Child Support Act 1991. Some of the issues were laid before the select committee in great detail, and all the Government has done is alter the maximum and minimum amounts of income to set the formula in 2001, and not much else. A huge opportunity has been missed.

The committee heard about some excellent ideas being used throughout the world, because other countries are grappling with ways to ensure that parents take responsibility and make provision for their children. In Australia they have shared parenting arrangements. In Canada they have a system that treats all parents quite consistently. We heard about shared custody and the “cliff-face” of a child support system where there is a 40 percent cut-off that causes parents to fight over how many nights they can each have the children, because there is a huge financial advantage if one goes beyond that 40 percent. It takes the focus away from the welfare, upbringing, and support of the child and puts it on the issue of who will pay what money.

We heard from chartered accountants that if we were really trying to dig into some of these very clever ways that some liable parents use to get around the law, we would use the adjudication unit of the Inland Revenue Department. They said it was an underused body and has a depth of commercial experience. The unit is used to dealing with the sorts of trusts and financial set-ups that people use to hide their assets. We also heard—mainly from fathers—about the agony of being charged with liability for children who were not theirs.

I am sad to be opposing the bill, but it just does not cut the mustard. A huge opportunity was missed to explore in greater depth that whole area of child support.

BARBARA STEWART (NZ First) Link to this

On behalf of New Zealand First I rise to support the third reading of the Child Support Amendment Bill (No 4). New Zealand First believes that this bill is a genuine attempt to take some action on the very contentious and difficult issue of child support. It would have been totally irresponsible to ignore the situation we currently have in New Zealand and do absolutely nothing. The issue has needed to be addressed for quite some time, and all parties in the House have agreed on this. Inaction is not the answer, it never has been the answer, and it never will be the answer.

We have heard from various speakers that one of the purposes of the bill is to improve compliance with financial support obligations, so that more children receive the financial support to which they are entitled. In this House we know that children’s needs are many, and usually very expensive. It is important today to be part of the in-crowd, and that usually involves having a cellphone, the label gear, and even an iPod. We know that peer pressure can be particularly intense for teenagers.

The bill proposes writing off the debt penalties—not the arrears—as a part incentive for parents to try to reactivate their payments. As we have all heard during the passage of this bill through the House, this measure will provide only limited relief. We are very aware there is a provision for reviewing the measure, if liable parents default on their obligations. We must say that the penalties should never go towards the child, but elsewhere in the system, if they are indeed collected. It is an unrealistic situation when interest that parents owe is larger than the actual principal.

This bill may hopefully encourage some lapsed parents to re-enter the system, because we all know that children need the financial support of both of their parents. It is absolutely essential to reconnect parents with their financial responsibilities. One of the earlier speakers, Judith Collins, said there were 44,339 parents who needed to be reconnected in this respect. Non-payment of child support is a very serious issue, and, unfortunately, the losers are always the children.

We are very aware that the child support money owed by parents overseas has nearly quadrupled in the last 3 years. Some of this increase will undoubtedly be debt penalties. We all know that debt penalties rise rapidly. If this is an impediment, it needs to be managed so that more parents can re-enter the system. New Zealand First believes that it is far better to do something about debt penalties and try to manage this whole situation. We will be very interested to hear further from Peter Dunne about his Australian visit.

We want the collection rate for child support to be far higher than it is at present. It is essential that, as far as possible, a parent’s child support, too, accurately reflects that person’s ability to provide financial assistance for his or her children. We are very aware—and we are very pleased to have had it addressed in this bill—that some irresponsible parents hide their assets in a trust, so that, lo and behold, they do not have to pay a reasonable contribution towards their child or their children. But, again, it is the children who suffer. They are, unfortunately, the innocent victims, and it should not happen.

On the other hand, I know of a liable mother who provides so much for her absent children that she is forced to live on the breadline. Life would be far easier for her if she took other courses of action. But she is determined not to do so, and she will continue to make the compulsory and extra voluntary payments for her children. So we are pleased to see some provision in this bill to administratively review the level of child support where there is reason to believe that the true level of a parent’s funds has been hidden.

We know that children are our future and that they deserve the support of both parents. It is a serious and important issue, and measures have needed to be put in place for a very long time. We need to ensure that there is greater compliance for parents and that they meet their financial contributions.

We note too that the bill proposes a temporary exemption for young parents for whom it is compulsory to be at school. If those parents take on some part-time or casual work, they will be required to make some contribution towards the support of their child. Again, this is another challenge that the bill deals with. We must say that this bill is dealing with families at a very difficult and critical point in their lives. It is a very hard problem to resolve. We are aware, too, that this bill might not provide the perfect solution, but at least it is a part solution. We must move forward with solutions on this issue of child support.

The message from this Parliament tonight is very clear: parents are responsible for the financial welfare of their children, and any incentive that can be used to encourage lapsed parents to follow through with their responsibilities must be supported. New Zealand First supports this bill.

SUE BRADFORD (Green) Link to this

The Green Party supports the third reading of the Child Support Amendment Bill (No 4). I am well aware that this bill does not provide the wide range of improvements to New Zealand’s child support regime that many of the people who came to make submissions to us at the Social Services Committee wanted. However, it makes some limited reforms to the system, which we think are desirable.

Those reforms include working to improve the level of compliance with obligations, so that more children receive the support to which they are entitled. They also include new provisions for the write-off of penalty debt, extending the existing provisions for ensuring that a parent’s liability accurately reflects that parent’s ability to provide help for his or her children, and also putting into place a new appeal right that will look to provide greater fairness between applicants and respondents subsequent to an administrative review. The bill also adds to the list of those exempt from paying child support by including liable parents under 16 years of age—and unfortunately, we still have a number of those—victims of sex offences, and also people who are in prison or in hospital long term, within certain income limits. All of those changes seem sensible and deal with the practicalities of implementing earlier versions of the Child Support Act 1991.

During the consideration of the bill, I was particularly interested in issues around the extension of the ability of the Inland Revenue Department to inquire into the validity of exemptions or determinations made, especially in situations where, for example, it is suspected that the liable parent’s real income and/or assets are much higher than stated. I think everyone in the House—and we have heard a number of speeches on this already—is probably aware of circumstances where people have dodged, or continue to dodge, their responsibilities to their children, through the use of various mechanisms totally geared towards hiding their true worth.

Although I have a lot of sympathy for the predicament some liable parents find themselves in, I do not extend that to those who adopt legal and financial structures that reduce or hide—often completely or massively—their visible taxable income, thereby defeating the intent of the Act and, I think, the moral purpose that most of us in this House have that parents should take some responsibility, within their means, for the children that they produce. The new measures put in place by this bill will enable the Inland Revenue Department to initiate a process that looks into the reality of someone’s earning capacity and his or her property and financial resources.

I realise that many submitters will be unhappy with this bill because it has not dealt with their deep and genuinely felt concerns about some of the problems around the way our child support system operates in practice, especially when there is a situation where parents share the care of a child. However, in fact, many of the submissions covered matters that fall outside the scope of this amending bill—for example, matters in relation to the way contribution payments are assessed and what should happen to liable parents who find themselves in real hardship. Those and other issues raised by submitters are worthy of ongoing debate and review.

I think there are certain areas of our child support law that do need further amendment. For example, I have a great deal of sympathy for those who argue that there should be a lot more flexibility, reality, and fairness in how contributions are calculated in some specific situations. Those matters, however, are complex and deserve attention in their own right. We were not able to do that within the consideration process of this particular bill at the select committee. The Green Party will be interested to hear whether the Government has any intention to further review and amend the child support framework at any time in the near future.

Meanwhile, we are happy to support the bill in front of us tonight. We will be voting for it accordingly.

HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this

Tēnā koe, Mr Speaker. Tēnā tātou katoa i te Whare. As we consider the Child Support Amendment Bill (No 4) on this date, I am mindful that today is also the 29th anniversary of the death of Steve Biko, a young black African man killed by the apartheid regime of South Africa for daring to oppose the racism in his world.

As we consider this bill on this day, I also take this opportunity to honour our kaumātua from the far north, Mr Pia Īhaka from Te Kao, a man for whom there was only one tribe—Te Aupōuri—and to whom all other tribes in the north were mere subtribes. I honour him for his dedication to te reo Māori and for his commitment to ensuring that any child under his direction achieved a level of excellence at Ngā Manu Kōrero—the national Māori speech competition. As we consider this Child Support Amendment Bill (No 4) on this day, I mention Ngā Manu Kōrero, because as we speak, the nation celebrates the culmination of months of effort from hundreds of Māori youth at the 2006 Ngā Manu Kōrero competitions currently being held in Ōpunake—the 41st time that this premier event has been held.

The very first winner of the Korimako Trophy in 1965 was a young woman from St Mary’s College in Ponsonby, one Donna Awatere. In 1973, that award was won by a lawyer, Prue Kapua; in 1979, by print and television reporter Aroaro Hond; by broadcaster Julian Wilcox in 1993; and by Māori Party list candidate Tell Kuka in 2002. The Pei Te Hurinui Jones Trophy for the senior Māori section has been won by such luminaries as health specialist Mauriora Kīngi in 1979, the writer of the All Black haka “Kapa o Pango”, Derek Lardelli, in 1980, and the internationally renowned musician of “What’s the Time Mr Wolf”, Ruia Āperahama, in 1987.

As we consider this legislation on this day, I mention Ngā Manu Kōrero because those young people could teach this House about the quality and nature of robust but respectful speech-making. I also mention these examples of excellence because when we consider issues affecting our children we need to be guided by a sense of achievement and excellence, not just by financial return. I note that 300,000 children in Aotearoa are being supported by child support payments and I have no doubt that many such children will be found amongst the contestants in the audience at Ngā Manu Kōrero.

That is an important note in the context of this bill because many of the submissions received tended to reduce the concept of child raising to a formula based purely on money alone. One submission was about the cost of supporting a child. Another said that child support was a matter for parents to settle, not the Inland Revenue Department—although, given the massive arrears, that sounds more than a little unrealistic. Some submissions were depressing—men bitching about being ripped off by money-grabbing women, and women moaning about being lied to by men who said they had no money. Thankfully, there were some submissions that focused on the well-being of children as a priority over personal and departmental finances.

The Māori Party supports any efforts to ensure that parents accept their financial responsibilities to their children. We are talking about a lot of parents—more than 142,000 in 2005. So we support the intention of this bill to ensure that liable parents meet their obligations. We also note that changes are being proposed in this bill to make it easier for liable parents to think of rebuilding their relationships, and even rebuilding their whānau. If that means that 142,000 families may benefit from strengthening connections and responsibility, then we support that idea as well.

We also welcome the number of options proposed to get lapsed payers back into the system without forcing them into greater debt. One of the biggest obstacles to this has been the harsh penalties for late payment of child support. We note that it is only now that the Government is putting up a bill to deal with what has blown out to be more than $1 billion of debt. We support the proposal to address the penalties that erupt as soon as a parent slips up on child support payments. We also note that arrears of 37 percent in the first year, and 29 percent in following years, create an enormous debt, so it makes sense to encourage people to pay up.

We welcome the suggestion to write off penalties as an incentive for people to restart payments. We note that the Inland Revenue Department takes a case by case look at writing off penalty debt. That is a concern to us, because unless the criteria are clear we find that Māori people often suffer when things are left in the hands of departmental discretion. We also hope that the department has clear criteria when it comes to looking at cases where liable parents may not be paying what they are supposed to be paying. We make no fuss about the right to investigate, because as long as there is a system someone will try to rip it off, but we will support initiatives where the rules are clear and the emphasis is on improving relationships rather than snooping on people who are poor.

The Māori Party supports the proposed exemptions from liability for child support for teenagers under the age of 16, and for victims of sex offences. Allowing young people to put off child support payments until they can complete their education will help them as people, help them as parents, and help them understand their need to pay into the child support scheme. We also support the idea that victims not be further victimised by having to pay child support for children born as the result of sex crimes. While we are talking about exemptions, I would like to remind the House of a case in Waipukurau in 1995 where the mother of a boy born in 1984 and whāngai-ed at birth to an auntie applied to stop her child support. The boy had been living for 11 years as a whāngai with everyone’s support before the Department of Social Welfare stepped in at the last minute and demanded a liable parent contribution from the birth mother. The mother’s lawyer argued that the provisions did not apply because the child had been adopted and that Māori customary adoptions were affirmed in legislation. Fortunately, the court threw out the department’s case, saying that the department’s actions defied common sense. But although the precedent has been set in the court, I note that it has not been properly addressed in this legislation.

The Māori Party is keen to support any proposal that will harness the strengths and talents of our whānau. We will support any policy that encourages whānau development and that encourages parents to support their children, whether through the practice of whāngai or through the payment of child support.

I began my kōrero with some of the names of the winners of the Ngā Manu Kōrero. I forgot one name, and in the interests of cross-party support for this bill I would like to advise the House that the winner of the Ngā Kete o te Mātauranga trophy for 2003 and 2004 for best female speaker in the senior Māori section was none other than the niece of Shane Jones, Miss Ngāhuia Harawira.

My hope for Aotearoa, and the rationale for the Māori Party support for this bill, is that our actions are driven by a desire for excellence for our children, a willingness to support our children, a love of the gift of children, and our love for children themselves. Kia ora tātou.

Hon DAVID CUNLIFFE (Minister of Immigration) Link to this

Kia ora tātou, Mr Speaker. It is a pleasure to take a short call in support of the third reading of the Child Support Amendment Bill (No 4). It has been a long road to this point, but I believe a worthwhile one. This bill will assist children in need, and that is the bottom line. As we have heard from many speakers, too many children in New Zealand are deprived of adequate support by the unwillingness or inability of parents to meet their obligations under the Child Support Act. By amending that Act, this bill will allow incentives to be put in place that will encourage the repayment of debt and ensure that more resources get to the children who need them.

During the various stages of this bill and at the Social Services Committee there has been discussion about whether the bill would set up an inappropriate “get out of jail free” card for delinquent dads. On balance, I do not believe that that will be the case, and this is why. In the first instance, the bill does not allow for the underlying debt to be forgiven. In the second instance, no penalties are remitted unless and until a liable parent maintains his or her agreement to repay the base debt, as per the undertakings he or she has given to the Inland Revenue Department. In the third instance, the initial penalties cannot be remitted under any circumstances, and the remission of other penalties is on a pro rata basis. Why do I go into that technical detail? I think it proves that this bill maintains discipline on liable parents throughout the process. It also provides some positive incentives for them to meet their obligations—and that is important.

I commend the work of the select committee for the attention it has paid to the bill. I know that members from right across the House have taken a close interest in it, because it concerns a subject that touches the hearts of many New Zealanders. In that context, it is also appropriate for us to acknowledge the difficulty of legislating in this area, whatever strategy is adopted, because the law is interacting with New Zealand families at a time when, by definition, those families are in crisis—at a time when a separation has occurred, often very recently, and with all the emotional trauma and dislocation that that brings.

Since it was first enacted, the law has sought to balance the rights and obligations of custodial and liable parents. It contains a repayment formula that is objective and fair, and it quite rightly provides for the imposition of penalties when debt accumulates. The other reason why this bill is before us today is that it is common ground in this House that the debt mountain has become too large.

Dr PAUL HUTCHISON (National—Port Waikato) Link to this

Thank you for the opportunity to speak on the very important Child Support Amendment Bill (No 4). As my colleague Anne Tolley pointed out, this bill is a missed opportunity on the part of the Labour Government. Indeed, this is a very serious bill. If we look at its purpose, we see it is to improve the level of compliance with financial support obligations so that more children receive the financial support to which they are entitled. Yet here we have a Labour Minister saying that the debt mountain has got out of control. That just has to be a minimising of the scandalous fact that in the last 6 years under the Labour Government that amount has trebled. It is up by 300 percent; it has now reached $1.1 billion. In fact, in 2003—only 3 years ago—the debt owed by liable New Zealand parents resident in Australia was $73 million; now it is $280 million. It has quadrupled under the Labour Government, which just has not been watching what is happening with regard to a very, very important issue for children.

The fundamental reason for the Child Support Act 1991 is to ensure parental responsibility for the support of those parents’ children. We in National believe that must be clear. There must be clear signals to responsible parents, and there must be equally clear signals to irresponsible parents. As many of my colleagues have pointed out, this bill waives $650 million. That is what the Labour Government is prepared to do. The signal that sends to parents is that the Labour Government does not care about the debt. In fact, it basically encourages liable parents to be irresponsible, and that is of great concern.

Labour Government members over there on the other side of the Chamber are looking pretty tired and tawdry, and that is no wonder, because they have let this mountainous debt accumulate over the last 6 years. They set out to be the Government that was supposed to be accountable, but here we find that back in 2000 the debt was $380 million, and now it is $1.1 billion. There are $700 million of arrears. Yet the Minister of Revenue says that if we did get that money back, it would not go to the children. Of course the New Zealand taxpayer should have that money back. This Government is just going to write it off. That is what the Labour Government is doing—writing off $651 million in arrears that hard-working taxpayers have been required to give. We have seen, on the Government’s watch, a considerable laxity in this very important area.

Minister Cunliffe said child support is a very hard problem and the Government is honestly trying to do something about it, but the solution is not perfect. Well, that has to be the understatement of 2006. More important is what some of the technicians say about the bill. We heard from the New Zealand Law Society, from Judge Boshier and various other judges, and from the Institute of Chartered Accountants of New Zealand. All of them were deeply critical of the technical aspects of the bill, and really felt that the Labour Government had not looked at the details in a practical way. That is what has personified or characterised this Government over the past 6 years. It is fine in terms of talk and high in rhetoric, but it is unable to really look at the practical aspects of legislation.

I have heard about that issue from liable parents right throughout New Zealand, who have said that when the collection agencies have come to them, they have been given such confusing information that it has driven them to despair. One particular individual said to me that on one day, he was sent a bill for $200,000. He rang up on the next day and was told that it was $3,000. He rang up and said that was great, but the call operator said that the case manager had gone on holiday and he would have to go to the next call centre, which was in Whangarei. He called that call centre and was told it did not know about his case, and he would have to try up in Northland or somewhere like that. The system is a shambles under this Labour Government, and that is absolutely a characteristic of it.

I will look at the detail of the bill. This is what Judge Boshier had to say about one of the most important parts of the bill, new Part 6B. He said the purpose of that provision was to extend existing provisions for ensuring that “parents’ child support liability accurately reflects their ability to provide financial assistance for children”. I do not consider those provisions will be effective. I recall at the time the Trapski review was carried out in 1994, issues were raised about the ability of the court to be able to set aside strategies or devices, such as family trusts and companies, which enabled a liable parent to reduce their child support obligations. Following that, Judge Boshier received a letter from Judge Walsh, in which he said: “After reflecting on the whole scheme of Part 6B, I am left with the impression it will be effectively a toothless provision.”

So here in this bill the opportunity has been lost by this Labour Government, which did not bother to get into the very important details of child support. After 6 years it has let this debt mountain increase threefold—300 percent—and fourfold in Australia. Yet when it comes to the machinery of the legislation, Judge Boshier and Judge Walsh say that the provision is effectively toothless. That view has come from one of the highest judges in the land.

What does the Institute of Chartered Accountants of New Zealand say? It says, regarding determinations initiated by the Inland Revenue Department: “In any event we have serious misgivings with the proposal as currently drafted in the Bill; both with the law and the practical and administrative implications. It is too wide, provides no objective test, does not clearly specify the purpose, and provides inadequate controls and safeguards.” That is from the Institute of Chartered Accountants, and that is the reason why the Labour Government has let this debt mountain get away on it. It wants to waive $600 million and not think about sorting out the machinery of governance and the organisation of debt collection in this country. It just wants to waive the money and not go and do the hard, practical work.

So when we hear Minister Cunliffe say that child support is a very hard problem and that Labour is honestly trying to do something about it but the solution is not perfect, that has to be the understatement of 2006. This Labour Government needs to clean up its own administration.