Walker Holly: Child Support Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Walker Holly: Child Support Amendment Bill — Second Reading 
[Sitting date: 26 February 2013. Volume:687;Page:8175. Text is incorporated into the Bound Volume.] 
HOLLY WALKER (Green) 
: 
 Tena koe Mr Speaker. The Green Party supports the objective of a fair transparent child support scheme to provide financial support to children whose parents or caregivers cannot mutually agree on what financial contributions they will make to support their children—and that is the starting point for considering this legislation. However we have had concerns about the fairness of this Child Support Amendment Bill and what it proposes since its introduction. We opposed it at the first reading for this reason will continue to oppose it and I am pleased to see that the Labour Party has now joined us in that opposition. 
Phil Twyford 
: We always follow the Greens. 
HOLLY WALKER 
: I know Mr Twyford. Nevertheless we did engage very constructively in the select committee process because we wanted to see whether we could improve the legislation and ensure that it did achieve that goal of a fair transparent system and ensure that it did maximise the best interests of children. Although we were ultimately disappointed that the Social Services Committee did not take the opportunity to use the bill to improve the scheme in the best interests of children I would none the less like to thank the chair and members of the committee and the advisers and staff for what was I think a very informative process. 
Unfortunately that process did not allay our concerns or improve the bill. Indeed many of the very well-prepared submissions that we heard at the select committee from the likes of the Children’s Commissioner the Families Commission the Human Rights Commission the New Zealand Law Society and the Child Poverty Action Group as well as many individuals and families submitting on their own circumstances raised significant new areas of concern or ways that the bill could be improved which have not been addressed by the select committee process. Chief amongst these as we have heard from the previous speaker David Clark was the missed opportunity to use this amendment bill to enshrine the principle of child well-being as a core objective of the Child Support Act. This could easily have been done by inserting a clause requiring that the best interests of the child be paramount in the administration of the child support scheme and that could have been easily inserted into the principal Act. It was ruled to be within the scope of the bill for the committee to consider this amendment yet Government members blocked a request to write to the Minister of Revenue to request that this amendment be advanced and they also blocked a request to seek further advice from officials on the point which I think was a real shame. It was a great shame because inserting a clause like this would have helped New Zealand to meet our international obligations under the United Nations Convention on the Rights of the Child. It is timely that we should be considering this because on 13 March New Zealand will mark 20 years since the ratification of the United Nations Convention on the Rights of the Child yet here we are 20 years later passing up an opportunity to demonstrate our commitment to that important international agreement by enshrining the rights of the child in our child support scheme—and if you cannot enshrine the rights of the child in the child support scheme I do wonder where we do enshrine them. 
A commitment in the purposes of the Act to maximise the best interests of the child would of course therefore flow through to a number of other improvements elsewhere in the bill which unfortunately have also been disregarded by Government members. At the committee we heard from a number of submitters including Child Poverty Action Group and the Children’s Commissioner that the child support scheme could play a much more significant role in reducing and eliminating child poverty in New Zealand which is obviously a huge problem facing the country. The child support scheme could help with that if it allowed for the pass-on of child support payments to parents who are reliant on benefits and if it allowed for advanced payments to guarantee child support to receiving parents even if the liable parents are late or behind in their payments. 
It may not be widely understood by those not directly affected by the scheme that at present if the receiving parent is a beneficiary any child support payments from the liable parent are retained by the Crown as a way of offsetting the cost of providing that benefit. This means that the money paid by the liable parent does not directly benefit their child in any way despite the fact that the liable parent is making payments to support their children. The receiving parent has to survive and provide for their children on no more than they are entitled to through the State benefit system which as we know is hardly adequate for the support of children. So this is a huge disincentive to liable parents to meet their child support obligations as they know that their money will not directly benefit their child in any way. 
In fact there is ample international evidence that allowing child support payments to be passed on to parents who receive a benefit definitely and substantially improves the level of compliance amongst liable parents to meet their obligations. Those parents who have liabilities under child support at the moment think: “What’s the point of meeting my obligations and making my child support payments if I know they’re not even going to reach my child?”. There is significant evidence to suggest that if they knew it would benefit their children directly they would be much more likely to comply with their obligations. Passing on child support payments to receiving parents who are reliant on benefits would also directly improve the lives of thousands of children and it would help to relieve child poverty because there is a significant correlation and crossover between the children of parents who are reliant on benefits and reliant on child support and those living in child poverty. Of course it would encourage liable parents to meet their obligations. So we are very disappointed that the Government chose not to take this opportunity to improve the scheme by including that provision. 
Similarly having the State guarantee or advance child support payments to receiving parents to ensure a stable regular income for those parents and their children would greatly improve the lives of those children and increase the financial stability of their family. After all it is not the fault of children if the liable parent is late or behind with their child support payments. They have the same physical and emotional and practical needs that need to be met and it is of considerable benefit to their receiving parent if they are able to budget accordingly and know that they have a guaranteed income from child support coming in at the same time every week. So again a State guarantee or advance of child support payments would have been a significant improvement on this bill which was passed up. 
So much for some of the missed opportunities to improve this bill at the select committee. I now want to move to some of the fundamental concerns with the bill as it was originally introduced that remain following the select committee process. The most fundamental of these is the complexity of the new child support formula that it introduces and this is really at the heart of the bill and the most substantial change that it makes. Officials acknowledged to the select committee that the new child support formula in the bill is much much more complicated than the formula it replaces which is already reasonably complex and difficult for parents to understand. But the new formula introduces a large number of new variables that would make it very difficult if not impossible for the average parent to calculate their entitlements or liabilities without the assistance of an accountant—and I challenge the Minister of Revenue the Hon Peter Dunne when he says that it would be something that parents would not require any special support in order to be able to calculate. In fact as we heard from the previous speaker it is an incredibly complicated formula and will be incredibly difficult for parents to negotiate themselves. This complex formula detracts from the simplicity the efficiency and the transparency of the child support system which was a point made by the Law Society in its submission. It is a fundamental tenet I think that parents should be able to easily understand their liabilities and entitlements so that they can have confidence in the fairness of the child support scheme and the new formula makes this incredibly difficult. 
Not only that but it is so complicated that it will put the Inland Revenue Department’s already creaking and groaning IT system under considerable strain. We heard from officials that it will require fundamental changes to the administrative systems of the Inland Revenue Department in order to be able to implement the changes in this bill. In fact so fundamental are those changes that we have had to delay by a year the introduction of this bill so that the department can get its systems up to scratch to introduce this complex new formula. These changes that are required at the Inland Revenue Department are so fundamental that the costs of administering the new system have been estimated at $91 million not including a $28 million contingency fund beyond that yet with no discernible benefit for the children who are supposedly at the heart of this scheme—or would be at least if such an amendment was included in it. So that is a massive cost—an extra $100 million and a $28 million liability—that cannot in our view be justified given the flaws in the new formula and its failure to maximise the fairness and promote the best interests of the child. 
 It is a complex formula and yet it is so flawed that it does not take into account the vital importance of the early years of a child’s life from age zero to 3 and accord appropriate weight to the costs of having young children. It is a complex formula and yet it would result in a disproportionate impact on women especially female sole parents. Figures provided to us at the committee suggest that almost 30000 mothers could experience a reduction in their monthly child support as a result of this bill. In one worked example provided by officials a sole parent with two children who spend 2 nights per week with the other parent would have their annual child support entitlement reduced by 36 percent or more than $3000. 
So we in the Green Party cannot support a child support scheme that is so complex that will pose a huge additional cost on the taxpayer with no additional benefit for children and that disproportionately hurts women and fails to alleviate child poverty. We will therefore continue to oppose this bill.