Cunliffe David: Child Support Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Cunliffe David: Child Support Amendment Bill — In Committee 
[Sitting date: 27 February 2013. Volume:687;Page:8273. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I rise to speak to Part 1 of the Child Support Amendment Bill and I wish to pick up the themes that my colleague the Rev. Dr David Clark has just espoused. The first of those is to note that Part 1 is the main operative part of this bill. It internalises the new funding formula and it contains the operative provisions that set the amounts of child support that are required in the event that a couple contemplating separation cannot reach a voluntary agreement. There are a number of issues that arise in this part. 
The first of them is the complexity of the funding formula. As Dr Clark has told the Committee the reality is that it took many hours of consideration for the members of the Social Services Committee—of which I was not a member at the time—to understand the mechanism embodied in this formula. It took officials a number of hours to be able to explain it to the members of the select committee. It has as Dr Clark has said required the Inland Revenue Department to contemplate retraining its staff. So what? The so what is that if it is that hard for professional officials and the average doctorate-holding member of Parliament to get their heads around this then it sure as heck is going to be difficult for the average Joe in the street or Jane in the street to be able to clearly understand their rights and obligations in the event that they cannot reach a voluntary agreement. So transparency—the lack of it—and complexity are two issues that are built into this reform. 
Why does that matter? It is because the incentives that the law really ought to be putting in place are that a couple can have every support to find a mutually supporting voluntary agreement to manage the transition from one family structure to another in the interests of the children. By not making the counterfactual transparently clear in a simple and easily understood form then it is much more difficult for couples who are already under extreme stress to be able to manage their way through that difficult period. 
That of course brings us to another point that we debated quite vigorously in the second reading speeches which is that the formula does not specifically prioritise the interests of the children; it is a fall-back. What it should have had and what Labour members argued for—but which National members I am told actually voted to block consideration of—was an accompanying provision for example in the purpose statement that would underline the best of our jurisprudence which is that the children come first. What I understand informally is that there was resistance to that from the Minister of Revenue and his office because they were worried about litigation risk against the Crown. I would have thought in these circumstances—vulnerable children; big powerful Crown—that actually the Crown ought to be able to wear that risk in the interests of legal clarity for the common law. That would have it is also true better reflected article 3 of the United Nations Convention on the Rights of the Child which is not specifically picked up in this bill. 
There is of course—turning to the substance of the formula—a real concern about the adequacy of the payments made. Submitters raised concern about that adequacy using the proposed formula particularly given that a significant proportion of New Zealand’s children are currently growing up in poverty. As we said in the second reading debate there are 270000 children growing up below the poverty line in New Zealand. That is an awful shame. It is a stain on our national character because those—over a quarter of a million—kids are going to have their lives their prospects and their children’s prospects impaired because they did not get the start that we would expect every child to get. Of that 270000 roughly a half we were advised—about 133000 children or more than the population of Dunedin or Hamilton—are growing up in single-parent families. Many of those no doubt most of those are dependent upon child support. 
It is essential firstly that the formula correctly upholds the interests of those children and secondly that the basic income adequacy is there for the liable parent to be able to meet those obligations. Two issues flow from that. The first is that we are embarked now on a debate about whether New Zealand should have expectations around a living wage. Well too damn right it should because the counterfactual is that we are paying wages that might be legally lawful but are acknowledged to be less than a family can possibly survive on and the implications of that are taken out of the well-being and the future potential and productivity of the children growing up in that household. 
Let us turn to the pass-on mechanism. Expert submitters recommended using a pass-on mechanism to increase the collection of support payments—that is if a liable parent knows that the money they are paying is actually going to go to their own children international evidence indicates they are more likely to pay. At the moment of course the money goes to the Crown and the Crown pays the child support to the custodial parent and the kids and because that chain is indirect sometimes the liable parents find it easier to not meet those obligations. Well they should meet them. There is no justification for not meeting them within the terms of either whatever agreement that couple has agreed to or the legal minimum that is required. Too many liable parents have not met them and have built up child support debt. The current Government loves to harangue the Opposition for the fact that when it was in Government it had less than $1 billion of child support debt. It is now $2.3 billion and climbing—$2.3 billion of child support debt has not been collected from liable parents. Anything that can get that down is probably worth considering including I think close scrutiny of the pass-on mechanism. Of course the risk to be addressed is that if the pass-on mechanism is not supplemented by some fall-back then of course families could be in extreme poverty if they are not so provided for. 
We note that the Children’s Commissioner in particular was critical of the understatement in the supplied regulatory impact statement which said that the pass-on mechanism may affect rates of payments. The international evidence is clear that it does so. 
Turning to the implications for women of the funding formula contained in Part 1 the legislation of course has very significant implications for women. On average as is well known women earn less than men and are more likely to be the primary caregiver. They are more likely to be in the vulnerable position here. The actual effect of this bill is to apportion a greater share of the cost of child rearing to the women—a greater share of the cost of the child rearing goes to the women. Now is that not extraordinary? We know we have got a child poverty problem we know the women bear the brunt we know they are disadvantaged but the great National Government has brought to the Committee legislation that makes those problems worse. 
We believe according to evidence that we have seen that the 28 percent shared threshold in the legislation is too low. Parents caring for a child 2 days a week are unlikely to share a proportionate responsibility for providing the basics of life. Although food bills might be able to be shared proportionately the primary caregiver is more likely to be responsible for things like school costs uniforms clothing medical dental and so on. As every parent knows this one included those costs can really mount up. 
Let us just sum up the points that have been made in this part of the Committee of the whole House debate. There is a real problem with transparency. There is thus a problem with accountability. Couples do not have a clear counterfactual upon which to base their decisions. There is no pass-through and women are worse off. Those are all serious issues with the funding formula contained in Part 1 of this bill. Thank you.