Child Support Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Child Support Amendment Bill — In Committee 
[Sitting date: 27 February 2013. Volume:687;Page:8287. Text is incorporated into the Bound Volume.] 
Child Support Amendment Bill 
In Committee 
Debate resumed. 
Part 1 Formula assessment of child support ( 
continued 
)  
The CHAIRPERSON (Eric Roy) 
: Members the House is in Committee for the consideration of the Child Support Amendment Bill. Before the dinner adjournment or before the Committee was suspended actually Dr Rajen Prasad had the call and it looks like he wishes to continue. He has 1½ minutes remaining. 
Dr RAJEN PRASAD (Labour) 
: 
 And a call to follow I hope. As I was saying—[ 
Interruption 
] The members opposite do not want to hear the arguments and particularly the two members moving around the Chamber have not actually provided any explanations in this debate about why they have taken the views they have taken. 
I was saying before the dinner break that no adequate explanation has been provided from Government members for not really taking the opportunity in the debate on this Child Support Amendment Bill to address the purpose of the bill. Particularly in Part 2 we do not see that addressed. The purpose of the bill is quite clear. It is to improve the fairness of the child support system and to promote the welfare of children. That is why it is called the Child Support Amendment Bill. But we do not actually see that. We do not see fairness really being improved and the welfare of children being promoted in the way that this Parliament has an opportunity to do. 
If the members opposite did internalise that if the Government did internalise that then they would write a requirement around the best interests of children the paramountcy clause if you like. That was the consistent advice from all of our major Crown entities in this field—all of them. Yet there is no response to that. [ 
Bell rung 
] Mr Chairman. 
The CHAIRPERSON (Eric Roy) 
: Dr Prasad. 
Dr RAJEN PRASAD 
: What a wonderful call. Thank you Mr Chairman. It was a shame that the members opposite did not take that call. When we really pushed—and I do not blame the officials for this because it is a Government responsibility—as to why was it so difficult to do the answer was that the Inland Revenue Department did not have the expertise. It could have bought that expertise quite easily. When it is prepared to spend well over $100 million on the provisions of this bill it is prepared to spend that on systems and yet it was not willing to make that expenditure in order to get that result. I think what the Government did say in the end was that “Well if we think it is a question we will ask the Children’s Commissioner to make some comments about that.” 
So the Government did not really consider it from that point of view. It would actually have been an incentive to parents to both parents to both sets of parents if indeed a requirement like the best interests of children was actually written in because parents even when they separate are interested in the welfare of their children. They are not interested in just paying the money over which is entirely what this bill is about—just paying the money over; how how much when what happens when you do not and how to work out how much you pay—but if the Government had written in that type of clause it would have changed the face of the child support system because there would have been a requirement for everybody involved to consider what was in the best interests of children. 
That I guarantee would have changed it because we know that parents do not mind paying over their responsible part when they know that that goes directly to the children. That is when they are happy to do that that is what all the evidence shows us and that is what people before the Social Services Committee told us as well. So why was that principle not adopted in Part 1 of this particular bill? It was not. It was just totally blind to what this bill was about. I just do not understand why members opposite did not take that particular opportunity. It was too easily dismissed and that begins to show us something about the attitude of Government members to the interests of children in every bill that comes before the House and in particular this one. If it did it would have given serious consideration to what was recommended by the Children’s Commissioner. This would enable parents to pay directly—enable what they pay to be transferred to their children if you like—or to promote the interests of the children. 
That is a very well-thought-out policy. There are countries that actually do that. The Inland Revenue Department did give us the costings of that as well and in the scheme of things the scheme of raising people out of poverty that was affordable in a country of this type. Yet there was no interest in doing that. Part 1 of the bill provides the opportunities to have it included but it was not. So it looks as if price was the only consideration for members opposite. 
I want to also turn to new section 14 in clause 9 of the bill. Here is a provision that relates to when the commissioner has to decide establish proportions of care and how the commissioner is to go about doing that. New section 15 is quite telling particularly when you go to subsection (5)—and paragraphs (a) (b) (c) (d) (e) and (f) have been excluded. Now it is to be done by the commissioner deciding the proportionality or the proportion of care that the parent gives: “on the basis of the amount of time that the carer is the person responsible for the daily care of the child.” That is the only principle. 
The ones that have been taken out are quite telling because they go as follows—and this is how the responsibility for the decisions about daily care were to be made how they were to be shared: who is responsible for taking the child to and from school for example and how decisions about the education of the child are made. There was a whole series of considerations to be taken in and that is in the Act that is being amended. What that anticipated if you like was that there was a requirement to think through a bit more than just the proportions of care. That is one of the failings. 
Hon DAVID PARKER (Labour) 
: 
 I want to take a call in respect of Part 1 of this Child Support Amendment Bill and refer to some of the particular concerns that the Labour Party has in respect of this part of the bill. You will have heard from prior speakers in the Labour Party that we thought there were some general concerns relating to missing an opportunity to put in the issue of child well-being as being a core object of the Child Support Act which was raised by various submitters. I am not going to deal with that particular issue. I am not going to repeat that. I am going to raise a new issue and that is the effects of the new 28 percent shared-care threshold in the legislation. 
This legislation introduces a new threshold for the relative financial contributions between normally a separated couple—normally a man and a woman—where the most common consequence is that the woman has day-to-day child-rearing obligations. At the moment the percentage of time that the child is with the other parent is higher than 28 percent before there is a diminution in the contribution from the non - main custodial parent. What this bill does is it introduces a new threshold of 28 percent. So effectively if a parent has 2 days’ care of a child per week then there will be a different allocation of resource within that couple who are no longer together. As a consequence the amount of money that the primary caregiver who has the child for 5 days a week will decrease compared with the status quo. 
Sue Moroney 
: Mainly women. 
Hon DAVID PARKER 
: That was the very point I was going to make. That is quite so. This is normally going to adversely affect women more often than it will adversely affect men. We in this Committee are trying to achieve fairness between people. We should also be trying to preserve the interests of the child or giving primacy to the interests of the proper maintenance of the child who is the primary responsibility of the two biological parents in most cases. I am not convinced that this change does that because what it will do is it will in respect of some quite low-income people result in a reduction in the income that is going to the primary caregiver. 
 The primary caregiver has a higher proportion of the bills and more often than not is going to have to pick up all of those incidental costs which are essential as far as the well-being of the child is concerned but probably not viewed as essential by the authorities who count the numbers—things like school trips that are optional or the occasional participation in a group event by the child like going to the movies with their friends. Those are the sorts of things that are effectively a cost more often for the parent who has most of the care because they are the parent who has the main responsibility for keeping a decent balance in the household and making sure that they do their child-rearing to the best of their ability and in the interests of the child. 
Some of the examples that were given by the Labour Party in our minority report in respect of this included the fact that it is more likely that the primary caregiver will have more responsibility for dental medical and other treatments—especially dental. Medical treatment admittedly probably arises on more of an as-needed basis and that could be at any time of the week although having said that most people try to avoid the doctor at the weekend because it is too expensive to go at the weekend. It is more often the mother who will face those costs particularly in the case of dental treatment. This is also true of clothing costs of school costs and of school clothing costs like uniforms. So Labour is not convinced that these changes are wise in that regard. I would like to hear the Minister in the chair the Minister for Building and Construction respond to that issue and explain how it is that this is going to be implemented in practice to ensure fairness between parents in respect of children who qualify for support. 
SUE MORONEY (Labour) 
: 
 It is a pleasure to rise—actually it is a pleasure to rise in opposition to Part 1 of the Child Support Amendment Bill because in standing in opposition to this the Labour Party is standing up for those families who are most vulnerable and those children who are most vulnerable. There is no coat of whitewash—like white papers on vulnerable children—on this side of the House but actually a really deep concern about a piece of legislation that is going to adversely affect children who live in poverty in this country. 
The mechanism for this is in Part 1 of this bill. It arises in two main ways in Part 1. The first is the absolute opposition from the Government to actually include the fundamental idea that the object of this bill should be to protect the interests of those children first and foremost—first and foremost. That was not just overlooked by the Government but it absolutely refused to do that. It was asked by a number of submitters to do that. 
Of course the Labour Party led the charge on this. It was back in 2011—no 2010 in fact—when Labour Party members said we were going to put children at the heart of all of our policy development. That has been backed up by the submissions on this bill by the Children’s Commissioner by the Auckland Coalition for the Safety of Women and Children by the Human Rights Commission by the Families Commission by the New Zealand Law Society—you name it they said it. They came in behind the Labour Party to say that children should be at the core of this. Children clearly are not because of the situation that David Parker just described where this part of the bill actually reinvents the idea of shared care. It lowers the threshold of what “shared care” actually means. It means that a parent who takes a child over the weekend now qualifies for a financial incentive to do so. My contention is that if we really had children at the heart of this we would want— 
Alfred Ngaro 
: What’s wrong with that? 
SUE MORONEY 
: Well the member Alfred Ngaro says: “What’s wrong with that?”. Here is what is wrong with that Mr Ngaro: I want to know that there is a commitment to shared care from that parent because they want to be a good parent not because they get a financial incentive to do so. That is what is so wrong with it. 
I know that the Government believes in the market model of parenting because that is exactly what it is exhibiting right now. It believes in the market model of parenting—that if you give them the financial incentive they will suddenly become good parents. Well on this side of the Chamber we do not believe in the market model of parenting. We believe in commitment to parenting—commitment because a parent cares. That is what is important and that is what should be pursued through legislation like this. 
It gets worse than that though because not only is the weekend parent the 2-day-a-week parent getting a financial incentive to be so but also the 5-day-a-week parent the primary carer the primary parent—I am not going to call them a carer; they are a parent—actually suffers a financial loss as a result. How is it in that vulnerable child’s best interest—or vulnerable children as there may be multiple children involved—that the person they rely mostly on for their care and their security is actually at a financial disadvantage? How is that in their interests? It cannot be. 
That is the main reason why the Labour Party is opposing this bill: it is all about Part 1 and the provisions contained in this part. We know that those women—and yes they are predominantly women—who are in that primary care role for those children are not living the sweet life. They are not living a wonderful existence where they have got money to come and go on. Most of those families are struggling to get by a on day-to-day basis and along comes this miserable Government and makes it even harder for them. It makes it even harder for them and it is not hearing the cries from our community up and down the country to fix child poverty. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is well worth the Committee’s time to take a considered view of Part 1 of this bill the Child Support Amendment Bill because it is really at the heart of the bill. It is a very major part that covers the mysterious formula that Sam Lotu-Iiga either never read or cannot remember and certainly did not want to table. I am very happy for Sam to elucidate to the Committee when he next takes a call as to how he believes this formula is actually going to work in practice. 
What the Labour Opposition knows is that there are two core failings with this part of the bill. The first is that it embodies the missed opportunity to put children first and nobody I think could have described that as well as Sue Moroney who reinforced to us that families in this situation are struggling anyway. This bill has managed to score two own goals. It is going to cost the taxpayer according to official advice $42 million a year more to implement than the current law. So it is going to cost $42 million more a year to run but it is going to put less money in the hands of vulnerable children. How can that be—more cost to the taxpayer and less money to vulnerable children? 
Alfred Ngaro 
: They’re worth it. 
Hon DAVID CUNLIFFE 
: Oh they are worth it. Yes they are worth it National Government. Would it not be good if you did something positive about it? 
It is not simply the matter of the complexity of the formula. In our last pre - dinner break discussion in this part of the Committee stage at some length we debated across the Committee the complexity of the formula; the difficulty couples would have in understanding where that left them; the reverse impact in that it would thereby be harder for them to form voluntary agreements about their separation plans; and that therefore perversely this highly complex and opaque formula would more often be needed precisely because it was hard to understand. Nobody is arguing that life is not complex or that it is going to be easy to write a law that satisfies the full diversity of family situations. What the Government has been saying is that therefore you should not be surprised if the formula is complex but that does not necessarily follow. What we want is a formula that delivers more benefit to children in need that does not lock liable parents out of the system if they get behind and that provides the strongest possible incentive for liable parents to meet their child support obligations. 
How does this bill measure up? It is not transparent. It has shied away from legislating for the primacy of the interests of the child. It has shied away from automatic pass-through so that liable parents know that every dollar that they contribute will go to their own children. It does not do that and my colleague Dr Rajen Prasad has very eloquently pointed out that all the international evidence is that collections are improved if that is the case but it does not do that. It does not put more money in the hands of the children. It does not simplify the system. It does not make it more transparent. It does not make it more directional. What it does do is waste an opportunity. 
I used to for my sins be the Associate Minister of Revenue responsible for child support before Sam Lotu-Iiga and his colleagues were members of this House. It was quite some time ago. I am— 
Dr Rajen Prasad 
: About 4 years. 
Hon DAVID CUNLIFFE 
: No no no it was probably longer than 4 years ago. But what I do remember is that the junior Opposition backbencher sent to bite me on the ankles at the time was one Judith Collins. She used to rail about the accumulation—I still remember the day that accumulated child support debt hit half a billion dollars. That was a terrible tragedy. And it was because we do not want any arrears. We want all that money paid so that kids can benefit and the taxpayer is not copping it. Half a billion dollars. What is Judith Collins saying today now that debt has reached $2.3 billion and has gone up a billion dollars on National’s watch in the last 3 years? 
Dr Rajen Prasad 
: Nothing saying nothing. 
Hon DAVID CUNLIFFE 
: Saying nothing. She is too busy working on her leadership campaign and getting around the backbench assuring them of all the awhi in the world. That is what Judith—and if you had any doubt about it just ask the bad boy just ask the bad boy Simon Lusk about it. No wonder she is not focused on child support—no wonder she is not focused on child support. She used to rail in this House that it was a travesty that the formula did not deliver for children. Seven years later the National Government has come up with— 
SCOTT SIMPSON (National—Coromandel) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 68 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 68 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Part 1 as amended agreed to. 
Part 2 Departures from formula assessment collection penalties and relief 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Part 2 of the Child Support Amendment Bill is around the nature of the formula and the departures from that formula. Part 1 sorry covered the formula in detail so we actually debated the merits of the more complex formula that has been introduced and the disadvantages of transparency and so forth around that and the way in which children are not put at the heart of the legislation. Part 2 focuses more nearly on exemptions on departures from the formula and how they should be treated. One of the things that particularly concerned me in the select committee process was around the automatic deduction provisions that were introduced quite late in the piece in the select committee process whereby employers could be asked by the Inland Revenue Department to deduct from wages money owed in child support payments. I should say from the outset that the Labour Party absolutely supports collecting the debts that are rightly owed. We believe that liable parents have a responsibility to care for the children whom they are responsible for. So we support in principle the strengthening of a regime for collection. 
However in this case what we see or what we saw at least in the Social Services Committee was that the department had not yet worked through quite how this would work. It had not thought through the natural justice processes in terms of notifying the person who was likely to have their salary deducted. Nor had it thought through perhaps some of the cultural implications where perhaps for whatever reason best known to those who had their child support debt those parents had chosen not to tell their employer that they had a debt probably for fear of discrimination of one kind or another or perhaps they had not even told their employer that they had children for whom they were responsible possibly for fear of discrimination of one kind or another. 
We felt that although the State has an obligation to collect that debt there ought to at least be a process of warning the person that that was going to be put in place that there should be a means for letting them know that the State was about to take this action and should they wish to cough up that they could at that point do it or make arrangements or contact the Commissioner of Inland Revenue and ask for some other kind of arrangement. I have every faith after some of the discussions with those officials that they will attempt to address these natural justice concerns. We were very fortunate I have to say to have some excellent officials briefing the committee who listened well and who came back with suggestions around our concerns and I believe that we were very well served as a committee. 
What I do not think is that the Government itself and the Minister in charge the Minister of Revenue had thought that matter through fully. So we felt on the Labour Party side that it was very important to keep a close eye on how this is implemented. We are very hopeful that the Minister will take this on board in terms of the practical arrangements for pursuing this debt. But it is one of the areas where one can end up if these things are not taken special care around with some unintended consequences. 
Another potential unintended consequence of this which it became clear that the Government had not considered was in terms of the additional compliance costs on business. This is something of a pattern we have seen with this Government whereby additional costs are heaped upon business which is not a big deal if you are a large-business owner and you have got automated systems but for many small-business owners there is additional compliance—we think back to the paper boy tax and the cleaners who now are required to report their earnings through the system and the extra overheads on schools and others who manage these people in part-time work and we see a pattern where the National Government does not consult business. It talks about business a lot; that is true. It talks about business a lot but it always seems to favour big business. There is nothing wrong with big business in my view but little business in the National Government is often ignored and trampled upon without concern about the additional overheads that a piece of legislation like this could have. 
 We know that when an employer collects this extra money off their employee they suddenly become responsible for some personal information which if a grievance suddenly takes place in the workplace they may be accused of having used improperly. We have a whole lot of complexities introduced to the workplace that were not there before. These things are things that businesses were not consulted on. So there are again some natural justice issues here on top of the additional overheads that have been put on business and the additional compliance costs for business that are introduced in this legislation. So these are some of the potential unintended consequences. I was surprised that measures could be introduced so late in the piece without having been through the proper consultation process that I would expect for a piece of legislation that had been proposed for several years. The bill seemed to be not a priority for the Government but suddenly it has become a priority for the Government. We see a somewhat unfluid—unfluid—production of the legislation. 
The other thing that I think is important to comment on at this stage of my second call—and if I get further calls I will have some more that I want to say—is around the penalties for late payment of debts. I think that the Government is taking a sensible step here in making the obligations more likely to be met. We have a trade-off here because in one sense what is going on is that liable fathers will now be liable for a whole lot less. So there is a question about personal responsibility. That National Government is effectively saying that those who have many children have now less liability and less personal responsibility for the children whom they have produced. That is an interesting position for the National Government to take yet in some ways I think it is right. If this provision leads to us collecting more of the debt and to the debt not spiralling out of control then surely that is a good thing. There is $2 billion—$2 billion—outstanding in child support payments. That is something that this Government has needed to address. For some reason it has not been a priority for the last 4 years that there is $2 billion worth of child support debt outstanding but it is good that it appears that will be addressed in some way in this legislation. Again it will be very interesting to keep a close eye on the way that is implemented and that is around the discretion of the Commissioner of Inland Revenue and so on. 
The other issue in this legislation that comes out of these additional compliance costs that National is putting on business and that comes out of the natural justice concerns is the additional cost of administering the formula and with it the exemptions. We know that this formula will cost more to administer. Inland Revenue Department officials have told us that the child support legislation is already the most expensive piece of legislation that they have to administer on a per case basis. So we know that this is a cost on Government. Because it relates to people in difficult circumstances of course we think it reasonable that there should be a cost but we are concerned about the additional costs introduced by a complex formula and coming out of it one can imagine some more additionally complex exemptions. The commissioner’s discretion will in some ways I am sure deal with some of those things but on a day-to-day basis there are going to be more staff involved in working out how the formula is applied and also when it is not applied. The staff time taken to implement the formula is expected to be more. That is what the officials said. It is reasonable to expect that working out when it does not apply and how you work around the new formula is also going to take more time. So there is more overhead involved for the Government and effectively that means increased bureaucracy. So there is increased bureaucracy that comes from having a more complex formula and also from the exemptions that fall from that formula. 
I will end my contribution to this particular part right at the moment because I am sure other members are very keen to speak. However I hope to take some more calls on this part of the legislation because there are a couple more separate areas that I wish to speak to. Thank you. 
MIKE SABIN (National—Northland) 
: 
 I am pleased to take a call on Part 2 of the Child Support Amendment Bill which deals largely with matters related to penalties. One of the challenges when talking about the complexity of the formula is that what it is trying to achieve is to better reflect modern-day society and that is really a case where I do not think people can have their cake and eat it too in that respect. The second part deals with rules related payments penalties and write-offs. A perverse incentive develops where people feel that their payments and their obligations get beyond them and they stop making them. One of the implications of that is spelt out in the over $2 billion worth of debt that we see 70 percent of which is penalties. The second part of this bill really is dealing with ways in which we can try to change the levers in order to encourage parents to make those payments and to meet their responsibilities. 
If we come back to the premise or the reason for child support in the very first place it is because sometimes parents cannot agree and do not have an amicable platform or relationship on which they can ensure that the needs of their children are being met at least in a financial sense. We hear from the other side of the Chamber that this bill is about vulnerable children in this context and that this is about child poverty. I am bemused by this. What we are dealing with here in this bill—is this dealing with child poverty? Is this a welfare bill? Is the Ministry of Social Development dealing with this? I believe that it is actually the Minister of Revenue. This is administration— 
Dr David Clark 
: I raise a point of order Mr Chairperson. I thought we were debating Part 2 of the bill. So far the member has discussed the formula and aspects that have been in the Part 1 debate in terms of vulnerable children and whether children are at the centre of the legislation. Or is it acceptable to have a wider debate? 
The CHAIRPERSON (Eric Roy) 
: No it is not acceptable. I have probably shown a little tolerance as I did in the debate on Part 1 when some members strayed. I hold myself responsible for allowing that leniency and I would ask the member to continue. 
MIKE SABIN 
: I was under the impression that this was a very important aspect of debate for the other side. Obviously those members have moved on. With regard to the penalties what we are talking with this legislation what we are talking about in this part of the bill is the ability to ensure that the payments are reaching their intended target and not being drowned out in administration in penalties and in disincentivising parents from ultimately making the payments which will then be spent on the children. The point I was trying to make is that this is very much at the heart of what this legislation is setting out to achieve. The complex formula the Opposition is talking about is a means of trying to ensure some efficiencies so that the administration of the moneys from the respective parents means that they find the end user being the children. 
I want to run through just a couple of specific points with regard to the penalties. This bill allows for compulsory deductions of child support from employment income payments to parents. In many cases this will take a load off a liability off and will ensure that payments are streamlined. That in itself will take care of some of the issues. The bill introduces a two-stage initial penalty with the current full 10 percent being charged only if the debt remains unpaid after 7 days. Again that is providing incentives to try to encourage payment. It reduces the incremental monthly penalty from 2 percent to 1 percent after a year of non-compliance complemented by intensive case management from the Inland Revenue Department. It goes on. It relaxes the circumstances in which penalties can be written off including when a paying parent enters into an instalment arrangement or something of that manner. 
The point is that there is over $2 billion worth of debt 70 percent of it as a result of penalties. Something is not working here and that something ultimately denies the children. In my submission this is nothing to do with vulnerable children. This is to do with parents who cannot agree and the administration process that is required to find agreement. This is not about a need for any implicit or explicit direction in legislation as to children being at the heart of it. This is about administration and penalties are such an important part of getting the levers under control so that the money that parents are paying into the scheme is ultimately being spent by those parents for the benefit of the children. Thank you. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Part 2 relates to a number of important provisions in this bill the Child Support Amendment Bill most notably the ability of the Commissioner of Inland Revenue to depart from formula assessment collection penalties and relief. It takes us through automatic deductions and it sets out the grounds for penalties. It does as our colleagues have just noted reduce the maximum rate of penalties after a period of time in an effort to prevent people becoming locked out of the system and it provides more discretionary relief from penalties. What I wish to do is to firstly take the Committee through some of those penalty provisions and to then turn to several of the more operational matters that follow from that and go to the heart of the Inland Revenue Department’s capacity to deliver on this bill such as it is. 
The bill does allow the commissioner the ability to write off penalties. That is important because during my last call I noted that the accumulation of child support debt has now grown to a colossal $2.3 billion. About $1.6 billion of that is accumulated penalties. The tragedy is that the penalty regime really really has needed an overhaul for some time. In practical terms what happens is that liable parents—usually dads who are estranged from the family—can get behind particularly if they are on a low income or unemployed. They then incur penalties which makes the problem worse. They get to the point where they cannot afford to catch up but there has been no provision in the law for the department to write those penalties off or down in order to bring parents back into the system. I know of constituency cases where those parents have fled the country because they have seen themselves and have been seen as outlaws because they have been unable to get square with the ledger of their child support arrears and the penalties have mounted up too fast. 
So although the Labour Opposition votes against this bill—we do not support the bill as it has got some fatal flaws it does not put the children first and it is a missed opportunity—we do agree with these provisions that provide more flexibility in the penalties such as clause 36 which allows the commissioner to write off incurred incremental penalties when a payment agreement has been completed. So there is a positive incentive to bring people together to reach a voluntary agreement on catch up and it gives the commissioner the ability to support that by a reduction of historic penalties. 
Secondly the penalties incurred by receiving carers or the charging of penalties due to overpayment of child support—i.e. irregular payments. You might pay too early or too late. Somebody might pay a double amount one month but then they incur a penalty because they are late the next month. This bill gives the commissioner the ability to smooth that through and avoid an unintended consequence. 
It also provides an ability to include the provision for the commissioner to write off some or all child support payable to the Crown where the receiving carer is a social security beneficiary or where recovery would place the liable parent or the children in serious hardship or would represent an inefficient use of the department’s resources. I will come back to that matter in a second. 
In general much as we do not agree with the bill as a whole we do agree that these penalty provisions make sense and will go some way to providing positive incentives for people to get together and act in the interests of the children. That has been the core theme of our opposition to the bill the whole way through. 
Now here are a couple of things buried within that part that we do not think are constructive. The first is the reversal of the onus of proof on automatic deductions. Currently somebody has to opt in to say that they want a direct deduction or an automatic payment of their child support liabilities. This bill changes that. It says that they have to opt out and that throws up some very serious privacy and natural justice issues. 
As my colleague Dr Clark has said just suppose somebody does not want their employer to know their family circumstances. Perhaps jobs are under threat and they do not want their employer to know that their family is split and that their partner has moved away because that might make their employment situation more vulnerable. Maybe it is more complicated than that. People lead complicated lives sometimes and they are entitled to make judgments about what is in the best interests of themselves their families and their children including whether they disclose those circumstances to their employer. To be fair there is an opt-out provision but we believe that the reversal of this burden of proof is flying in the face of natural justice processes and creates a whole swag of additional red tape. 
That then raises the next issue which is the cost of administration. The Inland Revenue Department reports I understand that it is expecting a 15 percent increase in the workload associated with administering what is already “Inland Revenue’s most expensive product to administer on a per person basis.” because necessarily it is bespoke. It is fairly customised. The complexity of the formula and the ability for more variation in the payment systems—which I have just said we think is a reasonable thing—will inevitably increase the cost burden on the department. 
And here is the kicker: it will put more burden on the adequacy of the department’s computer systems. For those who are perhaps like the Attorney-General who is getting a little bit of after-dinner shut-eye they may not have noticed—Minister—that the department’s computer system is creaking. It is good to see that the Attorney-General after a hard day watching the Supreme Court is now leaping to his feet in defence of the department because it may be that his department Crown Law will be called upon to adjudicate matters that arise— 
Hon Christopher Finlayson 
: We won. 
Hon DAVID CUNLIFFE 
: Oh “we” won did we Minister? “We” won? Well what about New Zealand winning? Because I am afraid Minister that if you flog off our energy system— 
The CHAIRPERSON (Eric Roy) 
: Order! 
Peseta Sam Lotu-Iiga 
: Point of order. 
The CHAIRPERSON (Eric Roy) 
: I think I can anticipate the point of order. [ 
Interruption 
] No I am on my feet. Let me just say that I know that the member responded to an interjection and we all need to be above that. Let us come back to the bill. 
Hon DAVID CUNLIFFE 
: Mr Chairperson you provide an excellent example and I shall earnestly try to follow it. 
The department recommends that it needs a rebuild of its computer system and that the price tag thereof would be about $1.2 billion—in fact as much as half the accumulated child support debt which is a lot of money. I do not know how any person or entity could actually spend $1.2 billion on a computer system because that sounds like an awful lot of money to a MP from west Auckland. But what I do know is that if you have a computer system that is—[ 
Interruption 
] I thought that would get the itinerant member for Mt Albert—she wishes. The casualty of “The Maestro” in Mt Albert—this is getting her excited. A price tag of $1.2 billion for a computer system makes one wonder how long the Inland Revenue Department’s mainframe is going to stand up at all and whether it can cope with the additional burden of more customised child support. 
So just wrapping that bit up let us first concur that the increased flexibility on penalty payments is a good thing. The additional customisation costs the additional work around automatic deductions the reversal of the onus of proof the increased costs of administration and the grave danger that it will not in any case be able to be implemented by the department’s creaking computer systems all adds weight to the Labour Opposition’s conclusion that we cannot support the passage of this bill in its current form. 
Concluding my remarks one must come back to the point that this really is a missed opportunity. It has been common ground across the House for a number of years now that the child support regime needed a fix. The Labour Opposition supported this bill’s referral to the Social Services Committee. We were ready for the debate and for the calling of submissions. We worked earnestly with the Government to try to find a way through this. We regret that we are unable to support the bill at this stage but the issues of transparency of accountability of cost of the burden of proof and of the lack of the primacy of the interests of the child have all driven us to that conclusion. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to follow that member from New Lynn— 
Scott Simpson 
: No Herne Bay. 
MELISSA LEE 
: Sorry Herne Bay. No Herne Bay is not in New Lynn. Oh but he lives in Herne Bay. It is a pleasure to rise to speak after that member. I do not ever remember actually seeing him on the Social Services Committee though. 
I rise to make a very short contribution on Part 2 of the Child Support Amendment Bill which deals with departures from formula assessment collection penalties and relief. In particular I want to focus on new section 135GA inserted by clause 34 which talks about discretionary relief for residual penalty-only debt. There are of course other provisions but this is specifically dealing with debt. I know that other members have actually talked previously about unpaid child support which is in excess of $2 billion in this country and more than 70 percent of it is from overdue penalty payments. I know that the member David Clark talked about the compulsory deductions earlier. I am actually very pleased to note that this bill allows for compulsory deduction of child support from employment incomes of paying parents. 
However during the select committee process we heard about some members of the public who might have issues in terms of their cultural needs and their privacy needs where knowledge of their child support payment could jeopardise their jobs and put their jobs at risk. It might even put a black mark on their names among their ethnic communities. It was a very very difficult position that they were in. I am very glad to have had great advice from our officials and now this bill makes it possible that the issue be dealt with. The Commissioner of Inland Revenue will have the discretion to allow alternative methods of payment so that people’s child support payment automatic deductions would not be known by their employers or the community which might actually put them in jeopardy. Some talked about physical harm as a result of it. 
Even in my own culture in the Korean culture if you are divorced and you are a child support payer you might actually—sorry not you Mr Speaker—be blacklisted among Korean society members and might not even be elected to Korean society officialdom if you happen to be in that situation. I personally know as a divorced woman that being a divorced woman has a certain stigma within certain ethnic communities—mine included. I think this element of this bill actually deals with that I guess social element very well. 
That will be my only contribution on this part because yesterday we dealt with it in the second reading of the bill where I actually also talked about other bits of the bill. This is a great bill. I commend it to the Committee. 
SUE MORONEY (Labour) 
: 
 At the outset of my contribution on Part 2 of the Child Support Amendment Bill can I just place on record the bizarre bureaucracy-speak that pervades throughout this bill including in Part 2 where strangely the person whom I would call the primary parent who actually is providing the main parenting role is described as a “carer” and the person who does the paying and not so much of the parenting gets the word “parent” attached to them—“liable parent”—as opposed to the primary carer. It is something that I would like to see in future actually resolved through this bill because it does seem to me that we attach the word “parent” in quite the wrong situation there. I would much prefer to see the word “parent” actually applied to the person who is providing the role of parenting not to the person who simply pays the money for the role of parenting. I think we have got that round the wrong way. Primarily Part 2 is actually about when it all goes pear-shaped. I guess in some ways you can say that it has probably all gone pear-shaped before families are even dealing with this bill but this is when after the relationship has broken down there is a problem with the liable parent—the payer—actually paying what they ought to pay. This is the part that actually attempts to deal with that. 
I was not on the Social Services Committee. I did attend briefly to hear a bit of the conversation that was going on around this bill but I am not a permanent member on the select committee. I was surprised to learn that the Government would not contemplate looking at one of the most effective ways of dealing with liable parent debt and contributions by considering the idea of a pass-on mechanism because there is international evidence that one of the best ways to actually improve liable parent payments is to ensure that they know that the money they are paying is not getting lost in some black hole of a huge administrative system but in fact is finding its way to their child or their children and supporting their upbringing. I am just surprised that the Government was not prepared to at least look at that particularly given that we have this huge debt of $2.3 billion outstanding. And as I think previous contributors to this part of the debate have pointed out that has revved up significantly under this Government’s watch. 
When this party in Government was in Opposition it cried crocodile tears over half a billion dollars’ worth of debt in this regard and now that it is at $2.3 billion well it is not even really concerned enough about it to look at one of the most effective ways that happens internationally of making sure that that debt does not continue to accumulate. However in fairness roughly $1.6 billion of that $2.3 billion of debt is actually incurred in penalty payments. Clearly the current system of penalty payments is not working. It is certainly not working because what obviously happens it would appear is that once the liable parent accumulates a debt and they start incurring penalties it becomes even more unaffordable for them and so they just continue to ignore it and ignore it and ignore it and hope that it goes away. In fact it does not go away; it just keeps going into an accounting exercise that blows out to be $2.3 billion. 
But in behind that $2.3 billion is actually a story that the Government does not want to talk about and that is the problem of child poverty. Yes even this part of the bill which is all about how we can try to get payments happening and a range of issues around penalties and relief and formula assessment and debt collection really does again underline the issue that is at the heart of this which is about how we get those resources to the children who need them. I am really disappointed to hear Government members opposite say that this bill has got nothing to do with children—that it is all about parents and it is all about administration and it is all about payments. What do they think this is all about? Where do they think this is all ending up? If it is not about the children if it is just about some bureaucratic exchange of money and it is an accounting exercise what on earth are we here debating child support legislation for? 
It is as if they are completely divorced from the real world. It is as if they are completely divorced from what really goes on in these families because if they do not understand the link between what this bill does the exchange of finances and the proportions in which it is moving that finance then they really need to get out there start talking to their community and hear what is really going on. I know that some of the members opposite think that because of their personal experiences they have got this nailed. They think they know all about it because they may have personally taken on a new family and personally been responsible for paying for them but this is about a whole range of families’ experiences; it is not about them. It is not about those members opposite and their personal situations; this is about a whole range of situations. 
I do want to ask some questions of the Minister in the chair Mr Woodhouse because we see in clause 26 of this bill that we are giving the courts some discretion to actually change the formula assessment in the situation where a re-establishment cost exists. I was very interested to understand what “re-establishment cost” actually refers to. What it refers to is two situations it would appear to me. I just want to check with the Minister that I have got this right. The first instance that it applies to is that the court may change the assessment criteria and formula if in the first 3 years after the relationship has split up the financial situation of the liable parent changes in a way where the contribution that they are required to make would be 30 percent or more of their income. That is what I understand that that part means and I would like some clarification that I have got that right. 
That does not bother me so much but the next bit I am not so sure about. I think it then goes on to say that this re-establishment cost could include the court being given the ability to change the formula assessment because the liable parent has got responsibilities for a new family now. I would really like some clarification on that because that is actually quite a departure I think from where we have been and I think that that has some real implications with it. Are we giving the court the right to change the formula assessment based on the liable parent who often seems to be the parent who has made the decision to leave the initial family unit setting up a new family within 3 years? That could actually often mean that they have left that family for another family because it is quite soon after the relationship splitting up. Does that mean that they get some sort of financial benefit for that? Because that is how it reads to me. I think that raises some real questions. It raises some real questions. 
Watching the members opposite who have been on the select committee either they do not know whether I am correct or not or they are feeling a bit embarrassed by what I am raising. I am not sure. They do not seem to be responding at all about the issue I am raising here. But I would like a response— 
Mike Sabin 
: Because you’re not making any sense. 
SUE MORONEY 
: Well the member Mike Sabin says it is not making any sense. If I am wrong I would like to know that but the way I am reading it Mr Sabin—and you might tell me whether I am right or wrong—is that correct me if I am wrong within 3 years if the liable parent has a whole new family that they are establishing and that they are financially responsible for the court has got discretion to change the formula assessment for their commitments to their original children—to the children whom this bill is trying to address. Am I correct in that? 
Mike Sabin 
: Oh you’ve confused me. 
SUE MORONEY 
: I am confused—so I have got it wrong? I would really like that member please to take the next call and explain it to me. Maybe I have got it wrong. I am putting my hand up and saying I could potentially have that quite wrong but that is the way I am reading this bill. I would like some clarification on that because it is quite—[ 
Interruption 
] 
Hon Annette King 
: I wouldn’t take notice of what he says. 
SUE MORONEY 
: Well I really am looking for direction on it because that is how it reads to me. And if I have got it wrong then I will feel quite relieved. But if I have got it right then I would be really quite concerned about what analysis we have had and what official advice the select committee has had that tells us what the impact would be on the original family and their children. That is quite a significant departure. 
JACINDA ARDERN (Labour) 
: 
 There were quite a lot of interjections from the other side of the Chamber during Sue Moroney’s contribution on this bill the Child Support Amendment Bill and I would really welcome Mr Sabin or perhaps the chair of the Social Services Committee standing up and taking a call. If you have got some evidence to refute what Ms Moroney was rightfully querying I think using the Committee stage which is what it is intended for then I would really welcome Mr Sabin doing that. But I have to say that my previous experience of Mr Sabin has been that his interventions are often slightly antagonistic—I am going to be honest. And I think it was probably quite fair of Sue Moroney to instead just say: “I am asking a legitimate question. If you have alternative evidence”— 
Peseta Sam Lotu-Iiga 
: You called me a scab. 
JACINDA ARDERN 
: I am happy to clarify our comments previously in the select committee; I do not think now is the place. Now is not the place Mr Lotu-Iiga to discuss scabs. This is the debating chamber. 
I want to talk about the discretion that is granted in the bill to the commissioner around the deduction of individual payments and I do think that discretion is important in a bill like this. In terms of the kind of discretion though that Sue Moroney has referred to—I think it is only fair that she seek clarification on that matter. I have to admit that I am dragging back into the recesses of my mind. I remember the debates that were had around new families. Where new families are formed by liable parents in particular what then is their responsibility on an ongoing basis to their new family versus their existing biological family no matter how many years of separation or importantly the amount of income that is brought into the home by a new parent where the non-liable parent is no longer in their place? 
I think what was an important principle discussed by the select committee though was that regardless of whether or not a custodial parent re-partners with someone with all the wealth in the world it is still ultimately the responsibility of a biological parent to contribute to the upbringing of their child. I think that is a principle we should stand absolutely firm on. That means that even if a mother re-partners with a very well-to-do individual or a father re-partners in that same kind of scenario—it does not matter which gender; it does not matter who the liable parent is or who the custodial parent is—the principle is that the responsibility follows the biological parents wherever they may be and the calculation applies to those parents. 
I think that is right and fair regardless of how many years they have been separated. That is certainly what I think this Committee would intend to be on the record—that when it comes to discretionary provisions our intent is that the responsibility lies with those parties. But when it comes to the deduction regime there is some importance to a certain degree of discretion particularly—and this is one of the things I remember discussing—when you are involving individuals who have limited income. They might be beneficiaries including the liable parent who might be a beneficiary. We do need to take into account the ability to factor in their income levels and whether automatic deductions would cause someone to dip below what would be considered a fair and reasonable ability to financially survive. 
One of the points we also wanted to make though concerns the change of the regime so that it is an opt-out system. Until now of course automatic deductions from employees’ wages have been permitted only on an opt-in basis and we are reversing that onus now. That is quite a significant change. That means that the Inland Revenue Department’s guidelines for notifying liable parents of intent to disclose personal information to an employer has not yet been developed—that is my understanding. But it is our view that if we apply natural justice to these situations liable parents should of course have the ability to object to the disclosure of information. 
We have had examples before the select committee which we heard and agreed with that said that under certain circumstances you would not necessarily want your employer being aware of a deduction for a child that they may not even know that you have. It is up to that individual’s own conscience as to how they manage that. So we wanted to take into account the ability of discretion there. But we have not really thought more broadly about whether or not this automatic deduction regime does allow discretion in other circumstances. 
Equally there are certainly going to be examples where there will be potentially unfortunate and unjust disclosures of personal information by the State because we have seen them in the past. Inappropriate disclosures by the State have unfortunately become quite a common occurrence. The State has proven itself—be it Work and Income be it ACC—to be a poor manager of people’s individual information. What protections will we have in place to ensure that this information the opt-out regime is dealt with with the due care that it needs? That is something I would put to the Minister in the chair. If he at some point were able to speak to some of these concerns then that would be worthwhile I think to the Committee. 
One of the other concerns we raised though is that when it comes to employers they will be bearing the brunt of the administrative cost over this now opt-out regime. This was something we wanted to flag particularly where small-business owners might be impacted by a deduction regime. There did not seem to be any regulatory impact assessment of what costs small businesses—or large businesses—would incur through deduction policies like this and I would have been really interested to see what impacts that would have. But I also want to point out that when it comes to things like deduction regimes debt reduction—which is another significant part of this bill—and the idea of trying to reduce down penalties for us the principle we were relying on is what we can do to ensure that on an ongoing basis we try to encourage more parents to ensure fulfilment of their responsibilities under this legislation? 
If we have evidence to suggest that the high burden of debt that an individual might be carrying might be reducing the likelihood of their coming back into the system and doing what is right and paying their way then we should look at how to reduce that. That is a reasonable thing to do and certainly we accept that. Judith Collins however did not seem to accept that and I think it is only fair to point out that in 2005 in her ongoing way of taking an approach that seems to be purely punitive without taking into account the evidence base or what impact it might have on a child she said: “Writing off debt sends the worst possible message to absent liable parents. The Government is telling them that if they dodge their responsibilities for long enough they will get a discount. That is the wrong message to send.” 
We know that the evidence actually says otherwise and that it is penalty payments that seem to be accruing in a lot of cases. If we can do something to ensure that we engage parents back into the regime then that is what we should be doing whilst of course making them responsible. But in 2007 Judith Collins went further than that. She wanted to ensure that action was being taken at the border against parents who default on their child support payments. And I have to say that if we are picking up traffic infringements at the border why are we not picking non-paid child support payments? 
In 2008 in fact Judith Collins supported making avoiding child support an arrestable offence. Where is it now? Where is it now? Where is that hard line that the Government wants to take on parents who are not paying their way? It was easy in Opposition was not it to make all of those statements. Well where are the provisions now? Only within the past 2 weeks I have had a case of an individual from Australia who has not been paying their way. They are in New Zealand we know where they are and what is the Inland Revenue Department doing? Unfortunately very little and that must be enormously frustrating for the individuals in this case who are not even biological parents but just want the parent of this child to do the right thing and pay their way. 
If the Inland Revenue Department had come to the Government and said: “We think we need these powers.” then I would hope that the Government would act. Now we are saying that there is a case for the Government to be looking into these powers. Judith Collins seemed to see it before. Why now has it suddenly escaped the Government’s view? The Government seems happy to be focusing on welfare fraud. Well we already invest $39 million chasing that each and every single year. What about investing a little bit more and chasing some of the debt that has been taken away from our kids as well? I would ask the Minister whether that was explored. I would be quite interested to hear the rationale for why it was not a part of this bill. 
TODD McCLAY (National—Rotorua) 
: 
 I move  
That the question be now put 
. 
Dr RAJEN PRASAD (Labour) 
: 
 There are just a few final points I want to make on this part of the Child Support Amendment Bill. There is one element of this Part 2 that does please me and I think it is a good set of provisions. In my observation over the years I have been involved in social provision it is easy to see how child support or the lack of payment of child support has received bad press and a bad name. That has happened quite consistently over the years where people have quoted the amount that is owing to the State. Many people outside do not realise that much of that is by way of penalties—not the base amount but penalties—and they grow very very quickly. This has given child support a bad name and this bill does address that quite well. 
It has a much more appropriate penalty regime: it is graded and there is an incentive if you like for people not to let it get out of hand. I want to commend the designers of this bill for those particular provisions. I think it is quite a good set of provisions. They are quite well graded and lots of checks and balances are built into there. So that is a good provision in this part and I think it will have an effect on the press if you like about child support. I think that is a positive aspect of it. 
The other aspect that I want to talk briefly about is the automatic deductions regime. I know that others have spoken about this and I note that Melissa Lee in her comments was singing the praises of this particular provision. It is a complete switch-round. Instead of being an opt-in provision it is now an opt-out one. It is really up to people to say that they want to opt out of this particular provision. I know that there are some additional provisions that we worked on in the Social Services Committee to say that for particular reasons—and cultural reasons have been mentioned but it is not just cultural reasons; it is for a whole bunch of reasons—you would not want your employer to have that information. That provision is still an opt-out provision. People have got to go and do something about it themselves not the other way round. We are worried about that and I think we will have to watch this because as the last speaker Jacinda Ardern said there is no history on the Government benches of respecting privacy of information in recent times. The burden then is on members opposite to actually ensure that provisions are built in in such a way that that kind of abuse that has taken place does not occur. I think that is quite an important provision in this particular bill which we will be watching and we are not certain that this is the best way to go. 
The next point I want to make actually links into that point. It is that in order to ensure that with this system which is now quite a complex system that has been designed there is a real possibility of the Inland Revenue Department actually delivering on it. We think the jury is out. It is already being pushed out another year. The computer program that others have talked about is now really struggling under the current demands and yet we have this new set of provisions that will demand much more of that system going forward. This should not be introduced unless it is guaranteed that the $1.5 billion—that is the figure to be spent on a computer system—will actually deliver on this. There are many more computer systems that the State has invested multimillion dollars in that have failed than have been successful. This is a major one. So here there is a risk for these provisions that have been added into the current system. We just wanted to signal that we have major concerns about that. We think that the system that is designed here is now quite complex. The formula is complex the system is complex and there are reviews being built in as well. In order for all of that to operate well that computer system has got to be bedded in not like some others that all of us could talk about that are producing all kinds of perverse effects. Unless that is done the risk will be realised. That also then addresses the question or the risk or the problem really of the huge expenditure. 
ALFRED NGARO (National) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: The question is that the question be now put. As many of that opinion will please say Aye to the contrary No. The Ayes have it? 
Chris Hipkins 
: A party vote is called for. 
The CHAIRPERSON (H V Ross Robertson) 
: A party vote is being called for. Will the Clerk please conduct a party vote for Mr Hipkins. 
Chris Hipkins 
: No for democracy. 
The CHAIRPERSON (H V Ross Robertson) 
: For democracy OK. Let us carry it out for democracy. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 59; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 56 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Maori Party 2; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question that Part 2 as amended be agreed to. 
The CHAIRPERSON (H V Ross Robertson) 
: Can I ask the honourable member Brendan Horan whether he wishes to vote. We have just called him to vote. 
Brendan Horan 
: Yes. One vote opposed. 
The CHAIRPERSON (H V Ross Robertson) 
: One vote opposed. [ 
Interruption 
] Order! Can I just remind members that during the course of a vote there is supposed to be silence. In fact any conversations across the Chamber can be seen as intimidation and could well lead to a breach of privilege. I call the honourable member Brendan Horan just to explain to him that what the vote was on was that Part 2 as amended stand part. 
Brendan Horan 
: Yes thank you. I was watching on television and was rushing to get here so I was aware despite the squawking of those— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! I can just tell the member that when that happens it is effectively a point of order and he should be terse and to the point. Thank you. 
A party vote was called for on the question  
That Part 2 as amended be agreed to.  
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Maori Party 2; Mana 1; Independent: Horan. 
Part 2 as amended agreed to. 
Schedule 1A 
The CHAIRPERSON (H V Ross Robertson) 
: The question now is that schedule 1A stand part but we have got some amendments from the Minister for that. The first amendments are set out on Supplementary Order Paper 181 and they are the Minister’s amendments to schedule 1A. All those in favour please say Aye to the contrary No. A party vote has been called for? The Clerk will please conduct a party vote. 
Chris Hipkins 
: You have to declare the vote first. 
The CHAIRPERSON (H V Ross Robertson) 
: I have done that. Part 2 as amended will stand part. That has been passed. We are now moving to schedule 1A. We have talked about the Minister’s amendments— 
CHRIS HIPKINS (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. On a voice vote you have to declare what you determine the outcome to be before a party vote can be— 
The CHAIRPERSON (H V Ross Robertson) 
: Sorry the Ayes have it? 
Chris Hipkins 
: The Noes have it. Party vote called for. 
The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to schedule 1A be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 1A as amended be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Schedule 1A as amended agreed to. 
Schedule 1 
The question was put that the amendment set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to schedule 1 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Amendment agreed to. 
A party vote was called for on the question  
That schedule 1 as amended be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Schedule 1 as amended agreed to. 
Schedule 2 
The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to schedule 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to.  
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 2 as amended be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Schedule 2 as amended agreed to. 
Clauses 1 to 3 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I am grateful for an opportunity to speak to these introductory clauses clauses 1 to 3. The title of the bill the Child Support Amendment Bill is something that I think could do with amendment. Certainly in the form that we have just passed it as a Committee it reflects poorly the actual nature of the bill. It suggests that it is a “Child Support Amendment Bill” which would be implying or could be taken to imply that it is aimed at supporting children. In fact as we have canvassed in the debate at some length and in some detail and as we have noted it is likely to be if anything less supportive of children than the existing formula and it has a number of other burdens as well. I have a number of competing titles to offer. I shall leave it to the end to tell you which is my preferred title. 
First I wish to talk about the “Missed Opportunity for Vulnerable Children Bill” because that in some ways quite accurately describes what we have in front of us. We had an opportunity in the Social Services Committee to amend the bill which Labour supported to the select committee so that it could be amended for the benefit of children—so that we could actually put children at the heart of this legislation so that their well-being and their development could be the thing that we were focused on in passing this legislation in line with the United Nations Convention on the Rights of the Child which we have signed up to in respect of looking out for the interests of vulnerable children. We saw in the select committee that that attempt to bring this into the core of the legislation and to bring it in in a way that did not encourage litigation but that was actually being very clear that the priority here was children was defeated in two separate votes. I suggest then that the “Missed Opportunity for Vulnerable Children Bill” would be a more apt description than the “Child Support Amendment Bill”. 
The Child Support Amendment Bill’s title I guess is technically aimed at telling you we are amending the current child support arrangements. That much is strictly true but it is a little misleading because of the words “support” and “children” being brought in there when in fact what we are doing is undermining the system that we have got. We are making it less transparent. That takes me to my next suggested title which would be the “Child Support (Transparency Removal) Bill”. This bill has got a new and more opaque formula. This is what we are introducing here in this bill: a new and more opaque formula that makes it more difficult for those with children liable parents and primary caregiving parents to calculate how their future arrangements will pan out. We know that the current formula is very simple. Families can work out what their future liabilities are going to be. They can plan towards them. Now we have a bill that is far more difficult to understand in terms of the formula calculation. 
We have been told by officials that they will need to upskill so that they can also brief parents on the likely obligations and responsibilities they will have. That will be an ongoing task certainly with the turnover in the Inland Revenue Department in recent times. That is a department under stress as we know running a 20-year-old computer system to collect our taxes with a dropping revenue base. We know that that department will continue to have high turnover. It will continue to need to train its own people to train the users of this formula and therefore it is a step back in terms of giving parents the transparency to plan for future liabilities. So that is why it should be a “Removal of Transparency Bill”. That is one thing that is very clear here with this new opaque formula that is being introduced. 
Another possible title for consideration is the “Child Support (Further Disadvantaging Women) Bill” because this bill very clearly puts more burden on to the primary caregivers the majority of whom we know are women. We have seen data for this in the select committee that makes it very clear that an increased burden will fall on women who are the primary caregivers who usually are the most vulnerable in these situations. I generalise a little but I think it is fair to say from those who come through the electorate door and those whom we see as constituency MPs that women are often particularly vulnerable in these situations and particularly where poverty and stress are involved. This further makes those women more vulnerable and so therefore we could have a title around the further disadvantage that this bill will generate for women. 
Another title that leaps out from this bill is the “Child Support (Increasing Bureaucracy Cost and Business Red Tape) Bill”—increasing bureaucracy cost and red tape for business because this bill does increase all of those things. We have learnt as we have had the debate as we did in the select committee that not all of these things had been consulted upon. This is typical. I think I made that point earlier in the debate with the paper boy tax and the various other tax grabs that this Government has done to try to fill the revenue hole that it created with the 2010 tax cuts which went to the wealthiest New Zealanders. I remind anyone who is watching at home that 44 percent of the value of the tax cuts in 2010 went to the wealthiest 10 percent of New Zealanders while just 2 percent of the value of those tax cuts in 2010 went to the 20 percent who are the poorest in New Zealand. Those were unjust tax cuts. The story we were told was that they would stimulate economic growth. Well we know now that we have got a Government here that has got the worst economic growth record of any Government in the last 50 years. That Government has not stimulated the economy with those tax cuts so it has got a revenue hole that it has been trying to fill with tax grabs. At the same time as it has been going about those tax grabs it has been increasing red tape—it has been increasing red tape. That red tape on business is just collateral damage as far as the National Government is concerned. As long as it talks business it is not really concerned what happens to small business. Talk to small-business owners around New Zealand and you will see that they are hurting right now. So I will come back to the title— 
The CHAIRPERSON (H V Ross Robertson) 
: Good. 
Dr DAVID CLARK 
: —because clearly this all lends itself to the title “Increasing Costs Increasing Bureaucracy and More Business Red Tape Bill” because that is precisely what is generated by this new more complex formula. You will see I was making a point quite relevant to the title debate. 
So if we weigh up all of those options whether it is the “Missed Opportunity for Vulnerable Children Bill” whether it is the “Women Further Disadvantaged Child Support Amendment Bill” whether it is the “New Less Transparent Formula Bill” whether it is the “Difficulty for Planning Bill” or whether it is the “Increased Cost Bureaucracy and Business Red Tape Bill” we think all of those things—I think all of those things—perhaps more accurately reflect the nature of the bill than “child support”. So I contest that those are better titles for the Committee’s consideration but overall I want to stress that in my opinion perhaps the best and most accurate title is the first of those I have suggested which is the “Missed Opportunity for Vulnerable Children Bill”. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 We are here to debate the title and commencement of the Child Support Amendment Bill. It is an opportunity for members to draw together the overall themes of the debate in the Committee stage. The title is often the focus for that tying together of ideas. I think the bill should be called the “Child Support Almost Amendment Bill” because it has been an almost process over the almost 5 years that this Government has been working on it. It almost created a meaningful reform but it did not quite and that is why we are voting against this bill. 
It is a huge lost opportunity. It is a lost opportunity to address the plight—and I got this wrong in earlier contributions—of 133000 children who are dependent upon child support. I thought there was a proportion of that total of dependants who were in sole parent families but I now know that that is the total number of children dependent upon child support: 133000 children. That is a staggering amount of vulnerable kids in our community and our country who are dependent upon what this Committee does tonight. The problem is that the Government is not doing enough. It is just not doing enough. It could have written the interests of those children into the law for good and always. It could have reflected the United Nations Convention on the Rights of the Child in this law but it did not. It almost did but it did not. 
It could have restated that the overriding goal in the event of a separation is to provide for the well-being of the children of the partnership because the adults are the ones making the decisions and the children have no choice. The adults have choices. The children are dependent. The adults created the problems. The children pay the price. So to the 133000 youngsters who are in that challenged situation Labour members say we are sorry. We worked hard in the Social Services Committee to bring the Government to the point where it could include their interests as a legislative priority but National members voted against even consulting their Minister on that international best practice. I find it so disappointing that they would be prepared to march in lock step with the executive rather than represent in this Parliament the interests of 133000 faultless vulnerable young New Zealanders. 
It could be called the “Inadequacy of Payments Bill” as that issue is another part of the “Child Support Almost Amendment Bill”. Submitters raised concerns about the adequacy of payments because of the formula in the legislation particularly given the fact that the baseline here is that so many of those children are living in poverty. What we do know about when families break up is that most often despite the fact that these laws exist the mother who is usually the custodial parent and the kids are the ones doing it tough. Most often the dads are able to recover financially and find it easier to move on with their lives because they do not have the primary burden of childcare. 
And worse than that the system that we have had—which is only partially only almost addressed by this bill which we cannot yet support—has locked out parents who may have had the best of intentions but were unable to keep up with their payments and have then been slammed with penalties that have locked them out of the system. Too many of them have left huge holes in the hearts of their kids and ruined their own lives by fleeing the country. It is a human tragedy on a vast scale. This Parliament could have almost fixed it but it did not— 
Hon John Banks 
: A late leadership bid. 
Hon DAVID CUNLIFFE 
: —“Mr Dotcom” it did not. It did not. 
There is no pass-on mechanism in this bill. It could almost have fixed the problem of pass-on but it did not. The select committee was confronted by extensive international evidence that liable parents—international best practice is very clear on the point that where parents know that the finance that they are providing goes straight to the children they are more likely to pay it. They are more likely to meet their obligations. That has also been set out very clearly in the Labour Party’s and Green Party’s minority views in the select committee report. We hope that the public and the courts will have regard to those minority views. The adequacy of the payments is not strong enough. 
National members say that—this has been their overriding rebuttal I suppose—this bill is not about child poverty. Well hello! For 133000 New Zealand children this bill represents their lifeline. Because if it was not for this bill they would be entirely dependent on the taxpayer whom this Government says it is thrifty and frugal to protect. It cannot have it both ways. This bill contains a $42 million extra price tag to the taxpayer and less money going to mothers and dependent children. It is a conjuring act of such stupidity that it is hard to credit that it took 4 years to get there. So no wonder we cannot support it. 
The implication for women of this “Child Support Almost Amendment Bill” is that as on average women earn less than men they are more likely to be the primary caregivers they are more likely to be vulnerable and they are more likely to struggle in a post-separation environment many women will be worse off as a result of these changes. 
It was almost a reform bill in the sense that the Government almost had the opportunity to come up with a formula that people could actually understand but it did not. This House has not. It has come up with a formula so opaque that I am told it took an extensive whiteboard session with multiple explanations by officials to the highly qualified members of the select committee who after a while could almost grasp it. If it took a bunch of tertiary qualified members of Parliament half a day to get their heads around an arithmetic formula—even investment bankers like the “Earl of Otahuhu” over there—then it is no wonder that parents would find it extremely difficult to see their way clear to voluntary arrangements that would protect their families when the counterfactual requires a crystal ball to stare into to be seen. 
Thirdly it is an opt-out system replacing an opt-in system. That matters because it was almost an amendment that could have protected natural justice but it was not. And it was not because this bill requires people to be proactive in telling their employers why they cannot have access to their personal financial details. It should be the other way round. Every working New Zealander knows it should be the other way round. Our personal information should be private until and unless we choose to make it not. Otherwise you get the Paula Bennett phenomenon where people’s personal Government-held information is put in the public domain for the purpose of suppressing dissent and that is a shame. That is almost as good—and I may be slightly tangential to the title of this bill—as the Prime Minister’s memory when he has meetings with casinos. But we will not go there in this debate. 
The adequacy of the Inland Revenue Department’s computer systems is the next issue with this almost amendment because if we could almost get the community’s head around the formula if we could almost see our way clear to the interests of the children and if we could almost protect the women of the country the Inland Revenue Department’s computer could not deliver because it needs $1.2 billion worth of upgrades. 
Finally this was almost consistent policy making. I say “almost” because my mind is drawn back to 2005 when Judith Collins said writing off debts sends the worst possible message to absent liable parents and 2007 when she demanded that action be taken against parents so that they are stopped at the border if they have an outstanding liability. Then she went further because she does not like being too subtle apparently. She supported making avoiding child support an arrestable offence and now the Government is writing down penalties. Almost consistent. 
MELISSA LEE (National) 
: 
 I move  
That the question be now put 
. 
JACINDA ARDERN (Labour) 
: 
 I want to speak to some elements of the commencement dates in the Child Support Amendment Bill at the beginning of what will be a short address. I do think that quite a bit of thought has gone into the transitional provisions and the commencement dates based on some of the factors that have already been pointed out by my colleagues around the additional burden on the Inland Revenue Department system that this new formula will provide. I think it is only right that we give the system time to creak under the weight of this new complex system. 
We as the Social Services Committee did recommend an amendment that would allow deferring the implementation of this child support formula from 1 April 2013 to 1 April 2014 and we suggested a movement of payment and penalty charges that saw it going out to April 2015. We very explicitly stated in the commentary on the bill that we consider this delay by 1 year necessary to accommodate the bill’s legislative time line because of course if we were implementing it in April 2014 that would not be a lot of time from the time that it will have its final reading. Also it was to allow the Inland Revenue Department sufficient time to prepare. I would say that was probably the weightier of the reasons. 
I am also interested based on these commencement dates in the amount of time the department needs to prepare. That will be computer systems but obviously in the bill we have also talked about the extra burden on staff—the 15 percent increase in the amount of time that staff will be spending on these new provisions. My question to the Minister of Revenue would be whether that will be coming out of baselines for the Inland Revenue Department or whether we will be seeing an extra investment into the department to enable it to deal with these changes because it is not like there is any capacity in many of our front-line services to take that extra strain. The Government has been very vigilant in its so-called value-for-money exercise. This basically means that the departments themselves are straining under the weight of continuing a full agenda of work be it policy development or just carrying out the requirements of day-to-day governance whilst also slashing back their ability to have any capacity to deal with extra things like this. 
So I would be really interested if the Minister could tell us given that we have needed to switch our commencement date by a year given that we know it will cost $91 million to implement and given that we know it will increase the strain on staff by 15 percent how we are dealing with that—and that $91 million. I have not yet asked a question on whether or not that has been budgeted for and in which budget we will be seeing those transitional provisions. 
I am also interested in speaking to the title of this bill. I am always aware that anyone listening to this part of a debate in the Committee will be somewhat confused by this tradition we have at the end of the debate on a bill of then suddenly talking about random separate names for titles for a bill. 
Mike Sabin 
: Suddenly waste time filibustering and belittling it. 
JACINDA ARDERN 
: There is a very good purpose for it that Mr Sabin does not seem willing to accept at this point in the debate. It does enable us to try to capture the essence of what a bill should be about. It gives us a chance to say whether or not a bill has achieved what might be the expectations of the public—the bill’s objective. 
Mr Sabin is now making gagging faces. I do not know whether or not the camera has captured some of the facial expressions we seem to be receiving on this side of the Chamber. 
Speaking to the bill’s title gives us an opportunity to see whether or not we have actually achieved the objectives we set out to achieve. There was a bit of debate at the beginning as to whether or not if this bill is truly about the welfare of the child we are achieving that through this Child Support Amendment Bill. Unfortunately it is Labour’s contention that we do not believe we have achieved that. The focus despite the bill being called the Child Support Amendment Bill is very much on setting a mediation process that is based on a calculation regime for parents who are unable to resolve outside of the Inland Revenue Department their own payment system. 
As I have already said there is a greater level of satisfaction with arrangements that are able to be set up outside the department’s system. We know that from survey work that has been done. So is this really solely about child support? If it were we have already contended that we would have probably seen a paramountcy principle in this bill. In a sense then could we almost rename it the “Child Liability Bill” because that is how it feels like we have treated kids in this bill? It is more like they are a liability—that we must make an assessment on whom the greater liability sits with—rather than the bill being about the support of the child and the welfare of the child. 
Dr CAM CALDER (National) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: No. I am going to call the honourable member Dr Rajen Prasad. He was on the Social Services Committee. 
Dr RAJEN PRASAD (Labour) 
: 
 Just a reflection first: there have been so many interjections from members opposite and most of them have been quite inane. I wish they had simply taken the time throughout the second reading of this bill the Child Support Amendment Bill to actually debate the issues. It would be much easier to have more respect for that point of view than when they simply chip away with inane comments and do not debate the issues. Throughout all of this many many questions have been posed to members opposite. Even the members of the Social Services Committee from that side of the Chamber have hardly taken any calls yet you would think that they would. 
In keeping with the theme from this side of the Chamber I note that this bill is another missed opportunity. The title of the bill is quite important. I started my second reading speech on this bill yesterday by asking whether this bill was for child support or not. Yesterday and today time after time speaker after speaker has said it is not about child support. It is not about what is in the title. The title is quite inappropriate. We can ask a number of questions as to what a title including the words “child support” would actually signal. Are children placed at the centre of this? Any child support system or method would do that. Does it? No. Children are hardly mentioned except as relating to some pathway to finances or money. 
Melissa Lee 
: It’s child support. 
Dr RAJEN PRASAD 
: Yes Melissa Lee it is child support and I do not know what that member understands by child support. What they have been arguing is that this is not about child support. Children are not being put at the centre and the member might have taken a call or two to actually defend it. 
Melissa Lee 
: It’s intrinsic in the bill. 
Dr RAJEN PRASAD 
: Well it is not because the basic principles of supporting children are just not there. The interests of children are not paramount. If Melissa Lee had been listening to all the submissions she would have argued that the title should be changed. Most of the credible witnesses that came to the select committee actually talked about children being at the centre etc. 
Melissa Lee 
: Who are the credible witnesses? 
Dr RAJEN PRASAD 
: The Children’s Commissioner the Families Commission the Human Rights Commission and many others. They came to ask why children were not being placed at the centre. They argued that the pass-on system would be a much better system to actually support children. That one change that one provision in this bill would have convinced me that this was a child support bill but no it did not happen—nowhere near it. 
Tim Macindoe 
: This is a horrible valedictory Raj. 
Dr RAJEN PRASAD 
: I did not hear that sorry. 
Tim Macindoe 
: I said this is a horrible valedictory. 
Dr RAJEN PRASAD 
: Mr Macindoe! I am surprised that that member would make that kind of statement. I suspect that the member is trying to be funny and if he is it was a failure. If he is trying to predict my future then I do not know where the member is coming from. I hope that member’s own family is listening because they would expect better of you Mr Macindoe. And if you take a call after this maybe the member might be able to respond to what I am saying because the member has not responded—and parents’ privacy would have been protected. 
So I agree with what this side of the Committee has been saying that this bill is a missed opportunity. It is the “Missed Opportunity for Vulnerable Children Bill”. So the title is absolutely wrong. The title should be changed to reflect both the arguments that can be made against the provisions that the Government has come up with in this particular bill and indeed how it has lacked any defence of the lines it has taken. 
The other side of this is that the system for supporting children has still not been developed and we have been saying that you know it is amazing that here we are pushing out the dates for the implementation of this particular bill because the systems that support it have not been put in place and in this clause of the bill those provisions also are being argued for. So those are the comments I want to make. I hope that Mr Macindoe will take a call or make a personal explanation of whatever kind tonight to kind of put the record right to see what he was talking about because I think that would be not just the charitable thing to do but the gentlemanly thing to do. Thank you. 
Dr JIAN YANG (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question that the question be now put. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! Order! Both of the members know and they have been here long enough that you cannot interject during a vote being taken. I will repeat that it amounts to intimidation and a member could find himself before the Privileges Committee. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 59; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Clause 1 agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to clause 2 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Amendment agreed to. 
A party vote was called for on the question  
That clause 2 as amended be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Clause 2 as amended agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 69 
New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan. 
Noes 51 
New Zealand Labour 34; Green Party 14; Maori Party 2; Mana 1. 
Clause 3 agreed to. 
The result corrected after originally being announced as Ayes 71 Noes 49. 
TIM MACINDOE (Junior Whip—National) 
: 
 I beg your pardon. I may have inadvertently cast the Maori Party votes in favour of clause 3. I apologise. Could I seek the leave of the Committee to correct that vote which should have been two opposed to clause 3. 
The CHAIRPERSON (H V Ross Robertson) 
: The member may seek leave of the Committee. Is there any objection to that course of action being taken? There is none. So they will change the vote. Honourable members as a result of the change the Ayes are 69 the Noes are 51. Clause 3 is agreed to. 
Bill to be reported with amendment presently. 
House resumed. 
The Chairperson reported the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill without amendment and the Child Support Amendment Bill with amendment. 
Report adopted.