Parker David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeParker David: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 03 November 2015. Volume:709;Page:7657. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Labour): I want to carry on in respect of one of the aspects of Part 1 relating to child support payments. It is the issue that my colleague Stuart Nash has just been talking about which is the influence of penalties on the total liability that is owed to the Crown which is made up of the individual liabilities of thousands of New Zealanders who have fallen behind in their child support payments.I do not think that anyone on either side of this House thinks it appropriate that parents avoid their primary responsibility of paying for the care of the children by not making payments when they should or that they as the parents of the child do not have the first and foremost responsibility to pay for the care of that child even when that child is not in their custody. Therefore they should meet their obligations of child support. But as Stuart Nash has said the total amount of arrears in respect of child support is now about $3 billion—an enormous amount of money. We know that for some people whether it is with child support payments or when they get behind in their student loan repayments the amount of penalties starts to compound at a rate that is just intolerable for them. They give up and not only does the amount that is shown as a liability to the Crown actually becomes a fiction because it can never be repaid but it becomes an impediment to them paying anything because the arrears seem to be so intolerably large.In that regard I want to know why the interest rate that is charged on these debts remains so high in this low interest rate environment. I think it is a bit of a one-way street when it comes to the Inland Revenue Department as to when it adjusts the rates. Interest rates have dropped to the lowest that they have been around the world for well really in everyone’s lifetime and the lifetime of people before them. Interest rates are historically low around the world. In fact I think we heard the Governor of the Reserve Bank saying that English interest rates are the lowest they have ever been in 400 years. New Zealand interest rates are no different; they are very low by historical standards. They are still higher than they are in some other countries which sort of jacks up the New Zealand exchange rate to the detriment of the economy but they are still lower than they have been historically. I want to hear from the Minister in the chair the Hon Jo Goodhew one what the current rate of interest is and two how it is justified.My understanding is that this $3 billion that is owed in arrears—if interest on that is at 5 percent that is another $150 million that those liable parents collectively owe by the end of the year. If it is at 10 percent that is $300 million. If it is 3 percent it is only—it is a lesser amount. I think that the Government kids itself when it adds these amounts to the penalties and does not properly provide for the fact that a lot of these amounts are not ever going to be paid because the penalties have become so high. I know that some provision is made by the Government in the books as to—in fact I would like to hear from the Minister as to what amount if anything is provided for in the Government’s books to show that these amounts are not going to be repaid. I would like to hear why it is that in this tax and remedial matters bill which has a whole section on amendments to child support matters we do not fix this issue of interest rates and why we continue to charge penalties at such a high rate in this low-interest environment.