Bridges Simon: Budget Measures (Financial Support for Newborn Children) Bill — First Reading Second Reading In CommitteeText is incorporated into the Bound VolumeBridges Simon: Budget Measures (Financial Support for Newborn Children) Bill — First Reading Second Reading In Committee[Sitting date: 15 May 2014. Volume:698;Page:17931. Text is incorporated into the Bound Volume.]Hon SIMON BRIDGES (Minister of Labour): I moveThat the Budget Measures (Financial Support for Newborn Children) Bill be now read a first time. The Government is committed to doing its part to give children the best possible start in lifeand this bill represents part of a considered and responsible package of measures that will help to reduce some of the stress placed on families when a new child arrives. The measures are intended to provide increased targeted support within current economic conditions for working parents with newborns. In the first year of a child’s life—particularly the first 6 months—it is important for newborn development to get full-time personal care. It is also important for parents and caregivers to get support to manage budgetary and other pressures. Monetary support can greatly assist with allowing the time and space for mothers or caregivers and children to develop close bonds and to reduce parental and family stress. All of these things combined support children’s health and development and improve short- and long-term outcomes for the child and society.Encouraging mothers’ and caregivers’ ongoing attachment to the labour market has broad economic and social benefits and can support a stable family environment for children to grow up in. There are issues however with the way financial support is currently provided to families with newborns. These issues can contribute to poor outcomes for children and make it difficult for some working parents to stay connected to the workforce after taking time out to care for their children. The Government is introducing this bill as part of a suite and a range of measures to enhance the paid parental leave provisions and the parental tax credit to ensure families with a newborn are supported to give that child the best possible start in life.Before discussing the proposals in the bill I would like to take the opportunity to talk about the other measures this Government will be consulting on in the near future that are related. These measures are aimed at broadening the number of people who will be eligible for paid parental leave and making the system more flexible for families. It is important to ensure New Zealand’s parental leave framework better reflects modern working arrangements and today’s diverse family structures. The measures proposed will be consulted on with stakeholders later this year with the intention of being implemented on 1 April 2016. For example people with permanent guardianship arrangements that are not formal adoptions under the Adoption Act are ineligible for parental leave. Similarly seasonal or casual workers who also tend to be amongst the lowest-paid in our society are currently ineligible for paid parental leave despite often having had a long work history. We will be looking to amend the law so that it better reflects the arrangements in the modern workplace and the home. However I want to make sure we have all of the details of this right. We will be talking to people far and wide over the coming months to make sure that we have a fit-for-purpose piece of legislation to introduce to this House.The bill before the House today makes changes that we can put in place now to help parents with newborns. The bill increases the number of weeks of paid parental leave from the current 14 weeks to 16 weeks from 1 April 2015 and to 18 weeks from 1 April 2016. The new time frames will apply when the actual or expected date of delivery of the baby—or in the case of adoption the date on which care for the child is assumed—is on or after the date of the change. The bill also increases the maximum amount of parental tax credit payable on the birth of a newborn to $220 a week up from $150 a week currently for the first 10 weeks following birth—again up from 8 weeks. So from 1 April next year parents of newborns will be able to claim a total maximum payment of $2200 per newborn.The bill also changes the abatement formula for the parental tax credit so that it is abated against each dollar of family income earned over an entire year rather than for the period the parental tax credit is paid. This change means the parental tax credit amount will reduce faster as income increases. It brings the effective abatement rate for the parental tax credit in line with the abatement of the family tax credit and the in-work tax credit. This will better target parental tax credit payments to lower and middleincome families ensuring that they receive a greater slice of funding over time. The total fiscal cost of both the extension of paid parental leave and the changes to the parental tax credit is more than $183 million over 4 years. Additionally we will be spending a further $30 million to increase eligibility. These changes alongside other measures in Budget 2014 will help to improve the lives of families and children while also being fiscally responsible and recognising current economic conditions. I commend this bill to the House.