Dunne Peter: Child Support Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Dunne Peter: Child Support Amendment Bill — First Reading 
[Sitting date: 08 May 2012. Volume:679;Page:2018. Text is incorporated into the Bound Volume.] 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Child Support Amendment Bill be now read a first time. 
 I nominate the Social Services Committee to consider the Child Support Amendment Bill. This bill is a very significant one for a great many New Zealand families. When the child support scheme was introduced in 1992 to replace the previous systems of court-ordered maintenance in the liable-parent contribution scheme it was the Government’s intention that it would be a simple scheme relatively easy to understand and administer and using taxable income as a consistent basis on which to assess the capacity of a liable parent to provide support for their children. Since that time it has had a number of relatively minor fixes but fundamentally the scheme has not moved with the times. I can vouch for that based on the number of complaints I receive about it from the public. In fact about 40 percent of the correspondence that I receive as Minister of Revenue relates to the child support scheme.  
For these reasons I began in early 2008 the most major review of the child support scheme since its inception. That work led to a Government discussion paper released in 2010 and to this bill which was introduced shortly before Parliament was dissolved for last year’s election. I freely concede that some might argue that the pace of change has been too slow given the range of problems identified. For my part I have a considerable measure of frustration that progress has not been more rapid but it is important to remember that this is an important social reform with many difficult components and it was therefore vital to make sure that the new format addresses to the greatest extent possible the issues that have been identified while at the same time recognising that it is impossible given the variety of individual circumstances to legislate for every imaginable situation. Having said that it is my strong view that this bill strikes the appropriate balance.  
But it also raises an important issue that cannot be stated too strongly. The child support scheme is a backup arrangement where parents fail to reach agreement over the financial support of their children. Sadly in too many cases since 1992 it has become the default position which in my view has given rise to many of the problems. I cannot state too strongly that the overriding preference has to be that when relationships break up parents reach their own mutually acceptable financial arrangements for the care of their children rather than automatically defaulting to the child support option. Where that is impossible for whatever reason the child support scheme needs to be there to ensure the financial support of the children is secure but it must always be the backstop not the default. The primary onus has to be on separating parents coming to their own mutually acceptable arrangements for the support of their children.  
There is one other general point that I should make because it is often a point of contention. Child support and parental access do not go hand in hand nor does the level of child support payable have any influence on determining the level of access to one’s children. That is a separate process determined by the Family Court under separate legislation and has nothing to do with the child support system. The point is that parents have a fundamental responsibility to provide for the care of their children regardless of whatever access or custody arrangements have been concluded or whatever town or city or even country they might live in.  
So with the measures contained in this bill the Government is signalling its intention to confront the real problems with the current child support scheme to ensure that it is fit for purpose—and that purpose is financial support for approximately 210000 New Zealand children. The changes in this bill provide for a fairer and more transparent assessment calculation for child support payments that takes into account a wider range of individual circumstances and capacities to pay. The bill also includes changes to the rules relating to the payment of child support the imposition of penalties and the writing off of penalties. Broadly speaking the changes in the bill fall into three particular categories: a new child support calculation formula which is the bulk of the changes; secondary changes to update the child support scheme more generally; and amendments to the payment penalties and debt rules for child support.  
It is important to emphasise that over the scheme’s history the formula used to calculate child support has failed to keep up with societal changes and that ends up affecting the children whom the scheme is meant to be there to support financially. It is now more usual than it was in 1992 for both parents to share the care of their children more evenly. A liable parent may therefore significantly share the care and expenditure associated with raising their children but this is not recognised under the current child support formula because they do not have arrangements that qualify for shared care. It is now also quite usual for both parents to be working yet the incomes of both parents are not taken into account. A consequence of this is that the liable parent may not actually be the primary income earner even though that liable parent is paying all the child support.  
On a more basic level the formula that is applied in calculating the level of child support payable does not accurately reflect the true cost of raising children in New Zealand today. I think that child support payments should reflect a fair estimate of what it costs to raise a child in 21st century New Zealand and what a parent would normally be contributing towards meeting that cost if both those parents were living together. So the scheme needs to be changed in order to ensure that it is working to help provide financial support and is not becoming in itself an obstacle to parents meeting their responsibilities.  
A very real concern that caregivers have is about the non-payment of child support payments by the liable parent or the instability or irregularity of those payments. Child support debt levels in particular from penalties have reached record levels. Although penalties play an important part in encouraging parents to meet their child support obligations if they are excessive they can actually discourage payment and the bill therefore proposes a better way of targeting penalties. International studies tell us that child support systems that are perceived as being fairer generally result in higher compliance levels. Together with the changes to the payment penalties and write-off rules for child support a fairer scheme would also provide paying parents with more incentives to make those payments.  
The State child support scheme as I said should be seen as the backup only when parents are unable to make satisfactory private arrangements for the financial support of their children. For the sake of people in that situation it is up to us to ensure that the scheme we put in place is run as efficiently and as fairly as possible while recognising that because of the circumstances involved no country will ever be able to introduce a scheme that satisfies everyone concerned. As I said at the beginning 210000 people depend on the child support scheme to provide financial support—210000 New Zealand children. They did not choose their circumstances but they have to live with them. The changes that this bill is about introducing are to make the support that they get through the child support system more certain and more regular by making the scheme a fairer and a better one. I am very proud and happy to commend the Child Support Amendment Bill to the House.