9. JUDITH COLLINS (National—Clevedon) Link to this
to the Minister of Revenue
Is he satisfied with the enforcement of child support in New Zealand, given that total child support debt has increased from $380 million in 2000 to over $1.27 billion; if so, why?
Hon PETER DUNNE (Minister of Revenue) Link to this
Yes. I believe that the Inland Revenue Department does an excellent job, given the practicalities of the world in which we live. Since the child support scheme was introduced in 1992, the department has collected 88.4 percent of the child support assessed—that is as at 31 March 2008. That collection figure compares more than favourably with the 40.7 percent collection rate achieved before the introduction of the 1992 scheme.
Is it not true that one-third of the $1.27 billion is owed by parents who have taken off to Australia, and that 8,000 of the 11,000 liable parents in Australia owe more than $5,000 each in child support?
What I can tell the member is that, as at 31 March this year, payments were being collected from over 9,000 liable parents in Australia, and the Inland Revenue Department was collecting from approximately 4,650 Australian liable parents in New Zealand. I can also tell the member that between July 2000 and March 2008 the department collected about $30 million from Australian liable parents, and received $44.5 million from Australia for New Zealand parents. The sum collected from Australia in the year ended 30 June was $20.6 million as opposed to $13.3 million last year. So we are actually collecting more, and we are giving more back to parents and New Zealand children.
Does he agree with a former Associate Minister of Revenue, David Cunliffe, who said that preventing people with child support debt from leaving the country would be “Draconian”; if so, can he explain why it is OK to interrupt the travel plans of people who have not paid their parking and speeding fines, but applying the same principle to child support debt is Draconian, and, therefore, they can come and go as they please?
The member may well be aware that come September of this year we will have good customs data-matching between Australia and New Zealand in terms of who is coming and going. She might also be interested in the following statistics. In the 9 months ended March of this year, the Inland Revenue Department commenced legal proceedings against 91 liable parents. Of those 91, 40 went to examination before a judge, 46 distress warrants and charging orders were issued over property, there were three arrest warrants, and there were two orders for the sale of property. The member may be worried that only three arrest warrants were issued. That is because, normally, about 80 percent of the parents who are affected decide that it is better to pay up on the spot, rather than go through the process that has been outlined.
Nicky WagnerIs it true that there are numerous instances of the Inland Revenue Department failing to take action against parents who have taken off to Australia, who fail to pay child support, but who can afford to return to New Zealand for holidays? One of my constituents has spent almost a decade pleading for the department to enforce the child support obligations of the father of her two children, even providing flight details at one point. That father has eight children by five women, and stopped paying child support in 2000, when he moved to Australia to take up a highly paid managerial position. What possible reason can there be for allowing this man to ignore his obligations to his children?
I indicated in response to an earlier supplementary question that over 9,000 cases are currently being pursued in Australia, with liable parents based there paying money back to New Zealand. I would simply make the point to the member—my not having the benefit of the individual details she referred to—that often the information that is provided is incomplete, but where it is able to be followed up it is, and that is evidenced by the fact that last year we collected over $44 million from liable New Zealand parents based in Australia. That figure was up from $13.3 million.
When total child support debt is over $1.27 billion, and one-third of that debt is owed by people who have taken off to Australia, is it not time to adopt the Australian Child Support Agency’s approach to child support defaulters as outlined in its 2008-10 strategic plan, where it promises to increase the number of its departure prohibition orders from 474 last year to 5,000; is Australia a more Draconian country, or does its Government take child support more seriously than this Minister’s Government does, which is happy to stop people from leaving who have not paid their parking or speeding fines, but cannot be bothered to stop child support debtors?
I would remind the member that the collection rate over the 15 years that the current scheme has been in place is more than twice the collection rate of the scheme that preceded it. I would also remind her that the level of collection is actually increasing. I would also remind her that the number of liable parents being identified is increasing. The responsibility of ensuring that parents meet their obligations to their children is being taken extremely seriously.