Sabin Mike: Child Support Amendment Bill — In Committee 
Text is incorporated into the Bound Volume 
Sabin Mike: Child Support Amendment Bill — In Committee 
[Sitting date: 27 February 2013. Volume:687;Page:8294. Text is incorporated into the Bound Volume.] 
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.