Support for Children in Hardship Bill — In CommitteeText is incorporated into the Bound VolumeSupport for Children in Hardship Bill — In Committee[Sitting date: 01 December 2015. Volume:710;Page:8389. Text is incorporated into the Bound Volume.]Support for Children in Hardship BillIn CommitteeDebate resumed from 10 November.Part 1 Amendments to Social Security Act 1964 (continued)POTO WILLIAMS (Labour—Christchurch East): When we were last debating this bill I was speaking I believe on Part 1 clause 4 and in subclause (1) is the definition of “part-time work”. This bill seeks to change the definition from what is currently standard—around 15 hours a week—to that of 20 hours a week.I want to refer the Committee of the whole House to some submissions that were made regarding those particular changes particularly with regard to the Council of Trade Unions submission. It has some very clear views about the change from 15 to 20 hours and I just want to quote that submission: “Single mothers in particular face a range of economic penalties as well as social difficulties. They are more likely to find only unpredictable part-time work making it hard for them to access the childcare and other support they need in order for work to be feasible.” It makes a really valid point which other submitters spoke to and that is about the precarious nature of part-time work for some of these mothers who are forced to also look for work that will satisfy the 20-hour definition. That often means transport to and from—and I know that this bill does make some provisions around providing some support for that limited though it is.But that also requires mothers potentially to be working during standard working hours which would be during the day. That does not take into account that many part-time jobs might occur in the evening which would require childcare services which are not currently delivered as a norm in this country. It is not easy to access childcare outside the normal hours—after hours—in the evening or overnight where there may be jobs for example in the retail sector stacking shelves at supermarkets or working at services that operate overnight. That might be at gas stations or the like. We are talking generally about a group of workers who have limited skills and are not generally able to access work that would provide them with enough resources to attend to that childcare.I also want to talk about clause 4(2) and (3) which change the age at which your youngest child should be before you are then required to seek work from the age of 5 which we all know is the age where most children will be attending school to the age of 3. That does apply some pressure to parents to actually find that childcare.I also want to go back to the Council of Trade Unions submission and just talk about what it says about this. It states that “The Bill requires solo parents and partners of beneficiaries to be available for part time work once their youngest child turns three rather than five …”. The Council of Trade Unions did not support these provisions in the bill because they: “impose stronger work-testing which will heavily impact on sole parents. The stricter work testing obligations and sanctions regime will cause hardship and deprivation to already disadvantaged people and force sole parents into work when they and their children are not ready for it.”We could not find any evidence—there was no evidence that was brought to the select committee—that could really rationalise dropping the age from 5 to 3. Not even the Children’s Commissioner could provide sufficient evidence to that fact. In fact the Children’s Commissioner said that the basis on which the change should be made was really around the fact that on average when parents return to the workplace their youngest child is 3. We are talking on average about all parents. They will be parents who have got resources to support them to stay at home for longer or they may be in different types of jobs. But the Labour Party members on the committee felt that that was not sufficient justification to require parents to return to work when their youngest child is aged 3. It just did not give us sufficient comfort that there was good evidence that that should happen.In relation to that the National Council of Women also raised the point that childcare would need to be available for shift workers and weekend workers as well as being available during the standard working week. That is also required for these children who are aged from 3. When you are aged 5 I guess you are far more developmentally advanced. When you are aged 3 you are still in a particularly vulnerable age group. We were unconvinced by those aspects of the evidence that was given. As I said earlier we could find no justification—no evidence was provided to the committee that could make us feel comfortable that dropping the age was in the best interests of the children.Hon ANNE TOLLEY (Minister for Social Development): I thought I would take a call in this debate to answer a few of the issues that have been raised to date by the Opposition in particular. First of all quite early on in the debate a number of people talked about no evidence being used to support the changes that we were making around the social obligation but I refer those members to the very compelling evidence of the effects on families and particularly on children of long-term dependence on benefits. That evidence is very clear. It is accepted evidence both nationally and internationally. Right across the OECD countries are working in the best interests to make sure that they get the best life outcomes for children and getting their parents back into paid work is one of the best ways to ensure that children are able to live successful lives. The evidence is very clear and that has been the basis on which this Government has supported getting parents back into work as quickly as we possibly can for their benefit and for the benefit of their children.Secondly there were some issues raised around the requirements that Work and Income will have for mothers of children by reducing the age to 3 and there have been some outrageous claims made. I can say with absolute confidence having talked to people all over New Zealand in Work and Income which is working with these families that it does not have hard and fast rules. Each case is considered individually. The circumstances the job the work that is available the childcare arrangements—all of those are taken into account because the Work and Income staff are just as concerned to make sure that the children are safe. They really want to help those parents into sustainable work. Those two points I think are important.That brings us to this talk about reducing the age from 5 to 3. In fact the statistics support the direction that this Government is going in. By the time their youngest child reaches 3 half of all sole parents—half of all the existing sole parents—and two-thirds of partnered mothers are in paid employment in New Zealand. That is the reality that we have now. In fact over the last 20 years the largest gain in employment for all mothers has been in the group where their youngest child is aged 3 to 4.I was interested to hear the member Poto Williams who has just resumed her seat talk about the Children’s Commissioner during the select committee consideration. In fact his very words and I quote them were: “I can’t see a good reason for the age of return to the workforce being different to people”—I would have said “from people” but however—“who are currently working than parents who are going into work for the first time from a benefit. And so 3 is a reasonable choice and 20 hours of work will increase that connection to work. So I think that those are appropriate so along as obviously the work is child friendly and the Early Childhood Education and care is accessible and high quality.”So that was the Children’s Commissioner’s comments to the select committee.I asked for a bit more information because people are asking “Where’s the evidence? Where’s the evidence?” and actually when you look internationally work obligations for parents do vary. But it was quite interesting. The Opposition often talks about Norway and how they do things in Norway. It was interesting to see that France Germany Norway and Switzerland have a work expectation for people receiving a benefit when their youngest child is 3 years of age. A range of other countries have work expectations at an earlier age including Sweden Japan and Denmark which is another country that is often quoted to us as one that we should take notice of. In Belgium Denmark Finland Japan and Sweden all sole parents are subject to a work test regardless of the child’s age. So actually what we are doing here in New Zealand is consistent with international practice.Finally I refer to the Welfare Working Group from 2011 which recommended that sole parent beneficiaries should be required to seek part-time paid work of at least 20 hours per week once their youngest child is 3 years of age. Of course we did not implement that—we did not go as far as that. But having seen then the success and the number of sole parents with children younger than 5 going into part-time work we are very confident that the obligations we are placing in this bill will have a great long-term effect for those families—for both the mothers and for their children long term. So I think the evidence has been well presented. It is very clear. It is well supported.I refer the Opposition to the comments of Dr Lance O’Sullivan who was last year’s New Zealander of the Year who supported the proposals from the Government at the time they were announced. He stated—and again we have good evidence that shows it—that children from vulnerable families at risk which we know many of those children in sole parent benefit-dependent homes are will benefit the most from having access to early childhood education. So the 20 hours’ early childhood education will provide those children with learning opportunities and with socialisation and we think that that has good long-term benefits for those children.So I repeat that I think the evidence is very clear that the direction that this Government is taking with this bill is consistent with international practice and evidence. It will have good long-term outcomes for the children.JACINDA ARDERN (Labour): It is a real opportunity actually to take a call immediately after the Minister for Social Development to speak to some of the points that she has raised. She is right to point out that on this side of the Chamber we take our role as Opposition very seriously. We use evidence as the basis of our positions and as the basis of the arguments that we make in this Chamber. So of course it was to the evidence that we looked when we formulated our own plans around child hardship.So when it comes to Part 1 of the Support for Children in Hardship Bill—because of course we need to keep in mind that this is a bill whose purpose is packaged up as reducing hardship for children—when we look at the evidence base around that what does it tell us that we should be doing on behalf of those children? Well clause 4 in Part 1 as the Minister has rightly pointed out changes the definition of “part-time work” to 20 hours. The argument being made by the Minister of course is that by increasing the threshold of hours that are expected to be worked by families who are on benefits we increase income we increase engagement in the workforce and therefore we presumably reduce hardship in the home. That is not always going to be the case.Firstly we need to take into account of course the abatement regimes that apply to households that are benefit households. If the Government truly wanted to focus on increasing the income of these homes then it would also be looking at abatements and the impact of abatement on families who are in part-time work while also receiving a benefit. That would have been a useful combination of issues to look at because simply increasing the hours required in the threshold test does not necessarily have that wider impact. We as a party have looked at that. We have got a very clear view on the need to increase the number of hours that a benefit family can earn and keep before it starts seeing its benefit abate. So that would have been a useful thing for the Government to do—Carmel Sepuloni: They could have voted for the bill.JACINDA ARDERN: And in fact it could have voted for our bill which was before the House not too long ago. So that would have been a nice thing to add to clause 4 if it was going to increase those hours.The second claim that the Minister has made is that when you look at the evidence around benefit households and their transition back into work—obviously we are primarily talking about sole parent households—they tend to transition into work at the time that their child turns 3 or 4 already before a law change. Of course this piece of legislation in clauses 4 6 7 and 8 reduces the age of children at which the work requirement kicks in for their parents from age 5 to age 3 and the point that the Minister just made herself was that actually by and large parents are already doing that. Why? Because they want to work because they know that in the longer term—even if in that moment with abatement regimes being what they are they are not better off—they end up being better off if they are able to put themselves back into stable employment. Those who can do when the child is at that age—3 and 4.That is the point that we are trying to make on this side of the Chamber: those who can do but it is not a given that that is going to be the best thing for every single family. You may have a family with a child or children who has special needs. You may have a situation where a family is able to find 15 hours that work around early childhood education but it is unable to find 20 hours. It will tack on an extra bit of after-hours cleaning that does not quite work but it juggles it to try to reach the requirement set out by the Government and it then has a wider negative impact on that family’s make-up. Those who can do and those who cannot often have a very legitimate rationale and all that we are saying is that for those extra 2 years—those extra 2 years of making it mandated—what gains are we making if predominantly those families who can are already moving into work?What might be some of those barriers to clauses 4 6 7 and 8 being complied with? Well we have covered some of them off already—the availability of work at hours that are conducive or sit in alignment with early childhood education hours is one of them. Again another thing that the Government could have done in Part 1 if it wanted to ease the pain of trying to find work that worked around early childhood education is it could have increased the hours. It could have increased the hours—the free hours available to families—from 20 to 25.That would mean that even if the Government was then bumping up the hours of work required there might be a bit of buffer for travel time. That might have been a buffer. If it was going to mandate that you be required to work for 20 hours by giving 25 free hours for early childhood education that would have allowed even perhaps a little buffer time for parents to drop off their child and pick up their child around that part-time work. Again something that Labour has promoted is that increase in hours because there is nothing to suggest that increase will have a detrimental effect but it could ease some of the difficulties for those families. So again another missed opportunity.Abatement increasing the early childhood education hours—those would all make a difference for those families if truly it was hardship that this bill was genuinely focused on and not as I am afraid I have come to conclude simply that the Government is giving with one hand and wants to look like it is waving a stick with the other rather than looking at reality. When I say “looking at reality” again when Labour designed its package to try to ease poverty amongst children we did look at the evidence. We looked at where children in poverty can be found. The Child Poverty Monitor 2013 is a really good start for telling us where we need to target. We know now that there are 305000 children living in poverty. That is based on income measures so that is the number who are living on 60 percent or less of the median income. Those in severe poverty—those living on 50 percent or less those in the hardest end of poverty—were at the time that the Children’s Commissioner did this report roughly 10 percent. We know that those often tend to be families who are benefit-reliant and who have younger children and those are the ones who are living in persistent poverty as well. That exists from the age of zero to 4—roughly if we want to take an age range.So if the Government was trying to create a targeted package rather than make necessarily a generic payment of up to $25 per family across the board what it might have done was be more generous in the package but target those families with children under say the age of 3 or 4. That would make the fundamental difference to children living in poverty. How I know that would make a difference is that we did the exact same modelling the Government did when we came up with our own package. We worked out that if you genuinely wanted to make a difference to children living in poverty 25 bucks per family was not going to cut it. The gap between what these families are living on and where our average incomes are required to be to survive has grown so much that as Jonathan Boston has modelled you need payments that are as generous as an increase of roughly $60. So that is why our Best Start package was modelled around a $60 payment per child and I would love to hear the Minister’s view on why she went for a per-family payment rather than a per-child payment which was the recommendation that was set out by the Children’s Commissioner and the Expert Advisory Group on Solutions to Child Poverty.In fact I would be really interested in the Minister’s views on some of those recommendations generally which again suggested that those payments be heavily weighted towards children on the younger end of the spectrum rather than our current regime which tends to weight to older children and makes assumptions about the cost of feeding and clothing and so on and does not take into account that it is easier for caregivers to work part-time or full-time at that point in the child-rearing stage. So we should be weighting the payment towards younger children also not only because it is harder to be in work and care but also because those are the most critical child-rearing periods. The first year—or first 3 years of life in fact—is the most critical in terms of attachment brain development and so on. So that is where our support should be targeted.Those are some of the reasons why the evidence base in our view around clauses 4 6 7 and 8 is contradictory and in fact could have the counter-effect of doing more harm than good even though there is some good in this bill. The increased payment is good. We are pleased about that. Our concern is the generosity and if of course there was a limit to the amount the Government was going to spend it could have made a trade-off and really weighted it at one end of the spectrum.I want to use my final contribution to support Supplementary Order Papers 135 136 and 137 in Carmel Sepuloni’s name. One amendment makes part-time study an alternative to part-time work. That gives longer-term options for families. The other is to retain 5 as the age and the other is to make the work requirement for parents of under-fives dependent—dependent—on access to early childhood education. The Minister has mentioned that. If it is her view that that is what is needed to make the bill work why will she not legislate for it and give that discretion in the legislation to allow parents if they cannot find adequate early childhood education to not have that requirement mandated upon them in the absence of that?JAN LOGIE (Green): There are quite a few points to make on Part 1 of the bill around the children’s hardship package. I think the Committee does need to remember that this was the bill that the Government said was its ambitious response to child poverty in this country. The most recent data tells us that over 305000 children are living in relative poverty in this country. That is not too far off one in five children living with significant deprivation in this country. Research has told us that around a hundred children a year die in this country from low-income - related diseases—children who would not have died in other countries—because of our policy settings. I would like to just frame this whole discussion in the context of that being the problem that we should be addressing with this bill which I do not believe is being addressed by this bill.I would also like to challenge the Minister’s very strong assertion that it is very clear that there is harm from benefit dependency and the fact that the Government defines benefit dependency—this is my understanding—as 6 months when anyone who is managing a child with a disability would recognise that 6 months on a benefit is not something they may term as dependency. The other assertion from the Government is that it is always going to be better to be in work. Actually the research is contested around that point and I would reference a Ministry of Social Development report. It is from a few years ago now but I will quote it. It was looking at research from around the world: “Overall the literature would suggest that while there is a range of potential benefits from being in paid work for both individuals and households for many households a shift from being work poor”—not having enough work—“to becoming part of the working poor provides few gains in wellbeing.”This is a really key part and this is also backed up by the Marmot Review from the UK which was a very comprehensive look at income and health. When we do not have really strong employment settings that provide for stable hours good work conditions remuneration that reflects your work and flexibility for families in our workplaces actually pushing people into work against their own judgment about what is best for their family is not going to deliver the well-being outcomes. This bill is operating in a context of very very weak employment legislation. We have to actually look at the whole picture and that was a substantive message from a large number of submitters on this bill. They wanted more. They wanted a comprehensive response to child poverty which deserves a comprehensive response and this is not it.I would like to point out some of the specifics that are so deeply disappointing to me in this bill. One is that the increase in the base benefit rate will come into effect from April of next year. This was a Budget initiative for this year but it will come in next year while all the time we know that children are being hospitalised because of that lack of income. The Government because of its insistence on bringing its Budget back into surplus prioritises that political measure over delivering to our families now and to me that is not good enough. That is not us doing our job and providing leadership and looking after everyone in this country.The Government has been saying that it is increasing benefits by $25 a week to these families. Actually the average increase is $23.10 a week and Jonathan Boston’s research around what was needed to actually reduce child poverty showed that there was a really significant range. Some families may need an increase of well over $100 a week because they are in such a tough position right at the moment but the absolute minimum that was needed was $30 a week. That is only a few more dollars compared with this and this Government could not even bring itself to just make that the base to get just one small group of people over the line and out of relative poverty. That to me is embarrassing to be honest.The point has already been raised about the fact that this payment is per family. It is not per child. We do know that the families that are experiencing some of the toughest challenges of poverty are our larger families. You can imagine that being a parent juggling several kids and getting back into work is a tougher thing—it is harder to do the more kids you have got. Anyone can work that out. So by making this a per family increase we are actually entrenching inequality so the families that are struggling the most now are the ones whose children will get the least out of this measure and that was a policy choice of this Government. It made the decision to make this a per-family increase so that our children who are struggling the most right now will get the least and they are most likely to be Māori and Pasifika families and they are the families that protect us from an ageing population struggle in the future. They are the families that we would benefit most from protecting and yet this Government has chosen to leave them out or penalise them.I think we also need to look at some of the facts. Around 40 percent of children of sole parents who have part-time work—and this is still entrenching that though they will be off a benefit and be in part-time work—live in poverty. Is this the solution for our children? I do not believe it is. When we know that we can address housing and we can address employment laws and we know that a lot more is needed in terms of income this bill is not the answer.There were concerns raised by one of the submitters that in fact they believed that this breached the UN Convention on the Rights of the Child in terms of article 27 and the assurance for States parties’ Governments to ensure adequate standards of living. So this Government had a choice to bring legislation to the House that would have guaranteed our children the right to an adequate standard of living. What it has brought to us instead is a conscious choice to leave our children in poverty not to reduce the number of those children or to lift them out of relative poverty.The Minister for Social Development said about the work testing and the requirement to go to work when the youngest child reaches the age of 3 that “Well half of sole parents do that anyway so yeah it’s OK to do this.” which is basically taking the choice away from parents. And she is saying: “Well Work and Income officers care about the families. They will take a lot of discretion into account.” These are people who are being paid to work for Work and Income and have got extraordinary caseloads. They are being expected to make the decision on what is best for a family and take away a parent’s own ability to choose the needs of their child. That is bizarre to me—that we would take that choice away.We also really need to be reminded that a significant number of these children have disabilities. I think two out of five children who get the disability allowance have a parent on a benefit either sole parent support or superannuation so we know a lot of these parents have children with disabilities who will have significant needs. I have already mentioned that it is likely that about 70 percent of these families are leaving violent relationships and their children will have very significant attachment needs and we are expecting the Work and Income staff to be able to have the medical knowledge the social work knowledge or the family knowledge to make that decision. They are not living with those kids. They are not living in that family. How can we expect them to make the right decision? I think it is asking too much and I think it actually just becomes punitive and unconstructive.CARMEL SEPULONI (Labour—Kelston): I want to continue where the Green Party member Jan Logie left off. I just want to refer back to the main issue here which is that we have 305000 children in New Zealand living in poverty and I think that is something that all of us in this Committee should be ashamed of. The reality is though that we do not have the numbers to make legislative change like members on that side of the Chamber do. Of the 305000 children who are living in poverty 60 percent of them are in beneficiary households and 40 percent of them are in working households. Forty percent of them are earning so little money that they are also living in poverty and we need to make that connection. If we care about children living in poverty then we also have to care about the people who are looking after those children living in poverty.I have put forward a number of Supplementary Order Papers to amend this bill. We support any increase that will go to our poorest families. Of course as my colleague Jacinda Ardern pointed out we do not understand the science behind how the Government assessed $25 per family as being the right amount. We know that that will do very little to actually address the poverty issue but it does do a little bit and so we cannot deny our poorest families that. But we do have some concerns and those concerns are addressed by the Supplementary Order Papers I have put forward.One of the concerns is about the extension of the work obligation from 15 hours to 20 hours per week. We had the Minister for Social Development stand up before and tell us that there is evidence to support that. The Minister cited Norway and other European countries as examples of where there is a 20-hour work obligation for parents with a youngest child of 3. I just want to point out to the Minister that actually in countries like Norway work is readily available. That is not actually the case here. In fact we currently have 58000 people actively seeking part-time work. So to place the expectation on these sole parents when actually the work is not available is a little bit unrealistic.We had the Minister saying that people would not be pressured into taking up work that was inappropriate but I have had so many stories told to me by sole parents undertaking employment courses through Work and Income where they are getting pressure put on them to take up work that is inappropriate. In fact I spoke to two sole parents who were both doing the same course. They were both articulate educated women and each was a solo mother with one child. Both of them said that they felt for the other women undertaking the employment course because of the fact that if they were vaguely passive or passive in any way then despite the fact that the work that was being pushed on them was inappropriate they would often end up saying: “OK I’ll do it.”This topic actually raised a really interesting conversation in the Social Services Committee and that conversation was around the availability of early childhood education outside standard working hours. A concern that was raised at the select committee was whether we as a country are moving down the track where we would think that night care for children is actually acceptable. I think the general public would agree that early childhood education—and I do not think it can actually be deemed that if it is just a babysitting service at night time—is not appropriate at night time. I think most New Zealanders would be fearful of that becoming commonplace in this country.So we did put up amendments with one to say that actually the work obligation should not be moved to 20 hours and it should remain at 15 hours. The evidence that we found was that actually in countries like the UK and the US where work obligations like this were imposed unfortunately the reality for these sole parents was that they often ended up having to take up the lowest-paid work and they ended up worse off than they were when they were just accessing welfare full time. That is the risk that I think we are running here.The other risk is that we have seen so many media reports and so many reports out in general about the quality and availability of early childhood education. So the assumption is always “Oh you can put your child into an early childhood education centre and go out and work.” but actually sometimes there is no early childhood education available and sometimes there is no quality early childhood education available. Why should parents be put in the situation where they are forced to put their children into care when they are not confident that that level of care is appropriate for their children?One of the Supplementary Order Papers that I have put forward actually also adds study as an option alongside part-time work. I really want to talk a little bit about that because that Government the National Government has talked about being aspirational for New Zealanders on so many occasions but I really feel that where it is clear that it is not is when it comes to beneficiaries. Supplementary Order Paper 135 is aspirational. We do not want to just force sole parents into any old job. We want them to be better equipped to increase their earning capacity and to increase their chances of being able to get into long-term secure work rather than just push them into whatever minimum wage job is available. We think that the National Government should support this because it is aspirational.We had some conversations about this in the select committee as well and what came up was: “Well actually they can access the student allowance.” There are issues with that. The issue with that is that you have to be in full-time study to access a student allowance or be doing 32 hours a week. Any parent who might want to access say 20 or 15 hours of study will not be supported to do so with all of these measures in place. They will not be able to access a student allowance work obligations will kick in and therefore study will basically be denied to these parents.Why would we deny the opportunity for these parents to take up study? We know that all of the educational research out there supports them doing this. We know the impact that it can have on their children in terms of their children’s own academic attainment. So why would we not support this happening? I really urge all parties in the House to look carefully at that Supplementary Order Paper and to take seriously the option of study alongside part-time work. I—likea number of other MPs in this House I know—as a sole parent actually studied and was able to access support so why would we deny that to others given that there are so many in this House who were accessing support from the State whilst raising children by themselves in order to take up study and better their own lives and the lives of their children?I just want to go back to my other Supplementary Order Paper Supplementary Order Paper 136 which deletes clauses 4 6 7 and 8. One of those clauses is to do with changing the age for when work obligations kicking in from the current age of 5 to what is being proposed by the National Government—that being 3. We did have a discussion at the select committee. This came through in many of the submissions. Many parents do go back to work when their youngest turns 3. That is OK. That is OK if that is the choice but different parents have different circumstances that need to be taken into account.One of the topics of conversation in select committee was: “Hey you know that might be OK for the parent who has one or two children but what do you do with the parent who has four or five children? Perhaps it is a little bit harder for that parent to go back to work when their youngest turns 3.” I just want to point out that all too often when we are talking about those parents who have four or five children we get this kind of attitude and stigma that comes with that as if they did something wrong by giving birth to all these children. Well actually I just want to say that for members on this side of the Chamber there is no stigma or judgment attached to it. All we care about is the well-being of those children and if it is in the best interests of those children for that parent to stay home with them for a little bit longer then why would we not support that?Many of those making submissions on this bill supported the additional $25 per week despite the fact they felt it needed to be more. Many of the submitters pointed out the fact that parenting actually needs to be valued as well and the fact is that we are stigmatising these parents to the point where we are assuming that they do not want to go out and work when actually the evidence suggests otherwise—many of them do. But if they need to we should be responsible and actually support them to be the stay-home parent that they need to be in instances where it would be better for their family.I have had a lot to do with the team from the Growing Up in New Zealand study in respect of teasing out some of the research that it has done that is relevant to this bill. I just want to clarify for the Committee that all of that research shows that actually these sole parents—sole mothers predominantly—do want to work. In fact this research shows that they have got more of a desire to work than the parent who is in a relationship.ALFRED NGARO (National): I just want to make some remarks in regard to the Support for Children in Hardship Bill and the comments from the previous speaker Carmel Sepuloni: she talked about the 305000 children in poverty. We know that the indicators for that—approximately 20 indicators—have a broad sort of reach inside that. Inside those indicators there is a continuum of those who are captured under what we would call children in hardship.That is recognised because just last week there was in fact a cross-party hosting of Unicef. It was called Make My Future Fair. While we were there it talked about the factors. It has got a new website and what it has done is it has captured the 100000 kids that it believes are captured under what it would call hardship. So when the member opposite talks about the 305000 we have got Unicef which has defined the true number of those in true hardship in that continuum as being 100000. The Opposition can talk all it likes but go on to the website and have a look for yourself. You will see it there indicated: 100000 kids. We think that is further evidence right across the sector that these are the kids that we need to focus on. So that is a little bit of evidence just to put out there for the member as well.There were some comments around social obligations. I would like to ask the member also if she does a bit of research to see that in 1998 the Hon Roger Sowry who was the Minister for social development included inside that an amendment to the Social Security Act 1964. Under that amendment was the talk about work obligations. I can tell you this: Steve Maharey was in the Opposition Annette King was in the Opposition as well and they also contested this issue but since that time when it was introduced there has been no change under the Social Security Act. Even in the 9 years of a Labour Government—if it thought it was the beast of burden and if it thought it was the issue of contention why did it not change it? I will tell you the reason why: even Labour knows that work obligations are important. In fact if it looked at the primary section under the Social Security Act 1964—yes Michael Joseph Savage was the founder and the father of this Act—what does it say? The primary clause talks about the fact that work is the best opportunity for those to further themselves out of that vulnerable circumstance. Work obligations are not an evil; this is a necessity. However what is important is the way in which we ensure that we wrap around support for those who are much in need in that sort of situation.There were also comments about the question of where is the evidence. The Minister has talked about international evidence and the Opposition said there was a lack of evidence. We have heard from the Children’s Commissioner Dr Russell Wills. I actually saw him in Copperfields this afternoon and had a chat with him there. But even in his comments he did not go against the issue. In fact he said it is actually a common trend—it is happening. In fact if the member had actually read the regulatory impact statement on page 29 this is what it says: “The children of beneficiaries face a greater risk of educational underachievement and are more likely to benefit from quality ECE from an [early age].”From a career perspective women are probably best advised to go back to work around 6 months after childbirth—so it talks about this. The international evidence that it comes from is the OECD report. You can download that and you can read from the report. The OECD report adds further evidence to the fact that the growing trend around fertility rates and around workforce placement for women internationally is that more of them are heading back to work when their children are between the ages of 3 and 5. We believe that not only is this piece of legislation in line with international evidence but it is supported very much there.We can talk about international evidence but let us talk about our own evidence. If we talk about the census Statistics New Zealand talks about this: “This reflects significant changes in employment patterns over the past two decades. As Figure 6”—on page 29—“shows below over the last 20 years the largest gain in employment rate for all mothers has been in the group where the youngest child is aged 3-4 years.” This is evidence not only from our own census and statistics not only from international evidence and not only from organisations like Unicef that has said that we are talking about those who are most in hardship being at around about the figure of 100000. We believe that is the evidence that supports even in Part 1 of this bill the Support for Children in Hardship Bill. Thank you.DARROCH BALL (NZ First): It is my pleasure to rise on behalf of New Zealand First to speak in support of this bill the Support for Children in Hardship Bill. But the problem and I have spoken about this before is that this is not actually focused on the children at all. It is actually—and we have heard it from different members of the House today—focused on the main benefit holder.I would just like to pick up on something that Alfred Ngaro said. Just looking at the introduction to the commentary on the bill it says: “This bill is intended to implement several initiatives for helping children who are living in severe material hardship.” Alfred Ngaro was talking about the spectrum that this bill was supposed to be targeting. But if we are talking about children who are living in severe material hardship and this bill is purporting to target sole parent beneficiaries and beneficiaries in general because they are down at the most severe end of poverty there are far more than just the 100000 children in that cohort targeted. Like I said at the start the problem is that this bill is not actually targeting those children; it is targeting the main beneficiary holders. So it is quite contradictory in the title in itself and I have spoken about that previously.Actually there are a couple of points I want to make. The first one is that one of the effects of this bill and this legislation is that it actually creates inequality with larger families. Because it is not concentrated on specific individual children like Jacinda Ardern pointed out earlier on the families with more children will become more unequal than those with just a single child. So it is actually creating inequality.I would like to look at a submission that was made by Susan St John who is an associate professor in the department of economics at the University of Auckland. It is quite a good report but I would just like to highlight one thing that she said. She talked about the new approach to welfare and she said that “This sees an intensification of the relentless focus on paid work as the solution to poverty including child poverty. Investment in this approach since 2012 has been about not more money for families but more money for the infrastructure of management of beneficiaries into work.” That is true with this bill and that is the problem that New Zealand First has with this bill.In fact the consequence of that approach is that there is an increase in the sanctions that are applied. So the administrative costs when applying new legislation like this can get quite high. In fact there were over 80000 sanctions applied between 2013 and 2014. So like I said if you are looking at the intent of the bill it is not achieving that. In stages it is actually creating inequality for the larger families and it is not actually focused on child poverty at all.One of the focuses as I stated was the sole parent benefits and it states in the general policy statement that there are a couple of points why children live in poverty. One of them is that the household income is too low even with good budgeting and discipline and another one says that the special demands on its budget are too high. But if we are looking at the sole parent benefit itself—and we are looking at it from 1990 I think it was—the sole parent benefit was around 75 percent of the average wage. And as we know what happened in 1991? It got cut quite dramatically by about 25 to 30 percent and ever since then down to 2015 it has consistently dropped from around 75 percent in 1990 to around only 50 percent of the average wage today.That is the kind of issue that this Government is trying to remedy by throwing not $25 per child and not even $25 per family but $23 on average per family. That is not going to create a solution for the massive gap that has been created over the last 30 years. That is why New Zealand First is concerned about this bill because the bill has the opportunity to do some good and focus on the children but—it is a step in the right direction. New Zealand First will support anything that is increasing the financial benefits that look after children but—POTO WILLIAMS (Labour—Christchurch East): Let us look first at the primary legislation that this bill seeks to amend and that is the Social Security Act 1964—1964. It is a long time since the primary legislation was enacted. There have been many and significant changes to it over that time and one would argue that in terms of its ability to continue to deliver the intent it may be time to be looking at it much more widely.I want to refer to some of the comments that the member Alfred Ngaro made about the number of children in hardship or the number of children in deprivation. However you slice it or dice it you cannot get past the fact that there are 305000 children living in poverty and Unicef—which Mr Ngaro did quote from to the Committee—on the very front page of its website quotes that figure. So whether you are talking about hardship or poverty or deprivation or whatever you are talking about you cannot get past the fact that we are talking about 305000 children living in poverty. Are there children who are more deserving than those living in poverty?This bill obviously is going some way to address some of those families but we are talking about a small percentage of children who live with poverty every single day. That includes not being able to have their nutritional needs met not being able to have their housing needs adequately met and probably not even being able to have their educational needs met. That is a significant proportion of our future that is dealing and struggling with these issues every single day so although Mr Ngaro might have a point about slicing and dicing the numbers it does not go past the fact that we have hundreds of thousands of children who are living in poverty.When we look at this bill clause 10 gives us the enabling provision for the $25 a week per family. It has already been said across this Committee that in actuality that probably amounts to about $23 in the hand. We are talking about $25 per family. The size of your family does not determine how much money you get so if you are from a family of three or four or five children you are looking at a couple of dollars for each child per week extra which is really what? A loaf of bread but probably not even a bottle of milk. So we are not talking about a huge amount.Do not get me wrong. I am very very happy that there are families that are going to get a little bit extra but if we are actually going to deal with the issue of children in hardship we should be making significant resource available to those families and it should not just be about money. We all know that the level a mother’s education reaches has a significant impact on how well her children do. However there is no provision within this bill to actually support parents mothers to upskill and to utilise the time on a benefit to do further training to provide themselves with better skills which actually at the end of the day would probably have more impact on the well-being of those children and those families.But I want to get back to the point of paying $25 or $23 in actuality to that family. When we are talking about some families we are talking about beneficiary families tending not to be one-child families but families with two three or four children. So if we are looking at supporting those families in hardship better why have we not looked at the recommendations from other experts in the field who ask us to consider amounts of around $60 to $80 to around $100 per week for families as opposed to $25? What would that do? That would make a significant difference particularly if you were then requiring those beneficiary families to get out and get to work. It would make a significant difference—JONO NAYLOR (National): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): Annette King—and I will warn Poto Williams that she has had her four calls.Hon ANNETTE KING (Deputy Leader—Labour): This is my first speech on this bill. First of all can I say that I welcome any improvement that can be afforded to families living in hardship. So I say to the Government thank you for recognising that there is a problem but then I will go on to say that it is only partial recognition of that problem.I think it is beholden on a Government to listen to the very best advice that it can receive when making policy and there has been some extremely good advice proffered to this Government on the state of families and children living in hardship in this country. I would reference the Children’s Commissioner. The Children’s Commissioner is a very highly regarded man. He was chosen by this Government to be the Children’s Commissioner. He has decades of experience as a paediatrician. He was chosen because of his experience and we supported the appointment of Dr Russell Wills as the Children’s Commissioner. He is independent—probably more independent than many Children’s Commissioners we have had in the past. He has been advising the Government on a number of issues and he has certainly made it clear to this Government that the changes it is making in this bill mean there will be small average gains for a family. He says that it will not incentivise parents to leave a benefit given that the high cost of quality childcare is a barrier for many families entering employment.So I wonder why the Government has not listened to some of those who live and work in the community every day with children who live in hardship. The fundamental issue here is the problem that the Government is having grappling with the meaning of hardship. It has danced on the head of a pin on the meaning of poverty and hardship for years now. “Poverty” is a word that is not allowed to be said. You can use any other word but do not use “poverty”; so the word that is used is “hardship” and these families are living in hardship. From the Minister’s own figures we are told that the number of children living in poverty—in other words in hardship—has increased to 305000 children. But the Minister’s bill assists only 18000 families with children a smidgen of the 305000 children living in poverty. I wonder why the Government does not want to have a comprehensive approach to lift all children out of poverty/hardship. Why has it decided to choose such a small number? Do those other children not count when it comes to this bill?When I look at what the increase is going to be how much these 18000 families get it is around $23.10 per family per week. Not per parent and not per child but per family; so it could be a family with six kids or it could be a family with one. I know that the Minister for Social Development is a very practical woman. She does her own shopping she prepares her own meals and she must know that a block of cheese in New Zealand costs $10 a dozen eggs are $4.86 2 litres of milk is close to $5 and 2 litres of petrol is close to $4. So when I add that up that is what a family can look forward to from the increase that is being provided to a family. The Minister will know that is not going to make a huge difference to a family depending on its size. Maybe it would make a difference if you were a single person but if you are a family with children and particularly if you have got some growing teenagers and they happen to be boys then you know that they would probably eat the block of cheese in a couple of days. Those of us who have had teenagers know that a loaf of bread would be lucky to last for 1 dayafter school.I have watched and listened as Government members in speech after speech have crowed about how it is the first Government in 40 years to increase benefits.Jono Naylor: Because it’s true.Hon ANNETTE KING: But I say that they have got—yes it is true but they have got very selective memories I say to the member Jono Naylor and maybe I could remind you.Jono Naylor: Please do.Hon ANNETTE KING: The first Government I remind the member in 40 years to cut the benefit was a National Government. Some of us can remember the benefit being cut and this increase in the benefit does not even restore it to what it was. So when the crowing is finished just take a hard look at the fact that benefits were cut by the very same Government.We set about to help restore some of that through Working for Families something that National called “communism by stealth” but has not got rid of. We went about supporting families with income-related rents and a number of other issues to help lift those families out of poverty and those members crow about how they lifted the benefits—the very benefits that they cut. So I say to the members opposite: get that in the head. Remember that because that is the truth.I have to say that I support the Supplementary Order Paper put up by my colleague Carmel Sepuloni. This is Supplementary Order Paper 136 where she is saying that she would like to ensure by deleting clauses 4 6 7 and 8 that “parents of children under 5 are able to care for them full time if appropriate and affordable early childhood education is not available to them.” Many members opposite live in provincial and rural New Zealand and full-time affordable and appropriate early childhood education is not always available. Why would we not choose to have parents—whether it is a sole father or a sole mother—looking after their children in those first 5 years? Is that not the gold standard that we would all like? How many of us had our mums at home for the first 5 years of our lives? Everybody in this room mostly I would think.Then there were others of us myself included who were sole parents. I went back to work when my daughter was 3 years old. I would have liked to have had 5 years at home. It was not possible but that to me is the gold standard—that you give children the best start in life by giving them as much care as possible by their parents whether it is one or two parents. So I wonder why the Minister would not accept what I think is a very good suggestion in this Supplementary Order Paper: ensuring if there is not affordable and appropriate early childhood education available that parents of children under 5 can stay at home and look after them and care for them. You see I have always thought of that as real work. It is not a “nice-to-have” or something that is just done; it is real work and valuable work. It is unpaid work—work that if we had to pay for we could not afford. So I say to the Minister why not consider this Supplementary Order Paper?I also think that the definition of “part-time work” should be 15 hours a week which is in Ms Sepuloni’s Supplementary Order Paper 135—not 20 hours a week; 15 hours a week—because who is going to be at home when children get home from school at 3 o’clock in the afternoon? If parents are not home there is criticism of them for not caring for their children and not taking enough account of their children’s needs. Why not 15 hours a week? It is a great start for them and as their children get older and they can move into more employment because they have got a foot in the door—well and good. So I say to the Minister why this 20 hours a week? If the Minister looks at reality out there and what really happens to families the Minister would know that 20 hours a week makes it incredibly difficult to be a parent particularly a parent on your own—a good parent doing the best job possible but—Dr SHANE RETI (National—Whangarei): I move That the question be now put.The CHAIRPERSON (Hon Trevor Mallard): I think we have been going for 2¼ hours. A number of members have had four calls. I think we are probably in a position where the Committee can decide whether it wants the question to be put or not.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 135 in the name of Carmel Sepuloni to clause 4 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendments set out on Supplementary Order Paper 136 in the name of Carmel Sepuloni to clauses 4 6 7 and 8 be agreed to.A party vote was called for on the question That the amendments be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendments not agreed to.The question was put that the amendment set out on Supplementary Order Paper 137 in the name of Carmel Sepuloni to insert new clause 9AA be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Noes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Amendment not agreed to.Part 1 agreed to.Part 2 Amendment to Education Act 1989CARMEL SEPULONI (Labour—Kelston): Speaking to Part 2 Part 2 amends the Education Act and I guess basically brings it into line with what is happening to the Social Security Act changes in relation to supporting children in hardship with the actual student allowances section of the Education Act which of course we do support. It is making sure that anything that they were able to get via these changes—so the $25 increase—will actually apply to those who are on the equivalent student allowance. So we do support that.I just want to say that we support in general the idea of parents not only being supported in a positive way to go back to work but also being supported to return to study. So we think there should be no difference in the amount of money that they are able to access for support if they are in study compared with say being on a benefit.I will though just reflect on the Supplementary Order Paper that the National Government voted against that went through during Part 1 which is relevant to this—Matt Doocey: Ha!CARMEL SEPULONI: —in many ways Mr Doocey because it is about support for sole parents to be able to go back and study. So let us keep in mind here that when we are looking at student allowances student allowances can be approved only if the person is studying for 32 hours or more a week. They have to be in full-time study to access a student allowance. The difference here I guess is that when we are talking about the work obligations the National Government is talking about 20 hours. What we were trying to say with the Supplementary Order Paper is that actually parents should be given the option of either studying for 20 hours or working part-time for 20 hours.The National members of the Social Services Committee in discussions on that said that actually they can access student allowances but they cannot access student allowances if they want to study part-time—say 20 to 31 hours. You can get limited full-time study approval at universities but having worked there for 5 years supporting students I know that actually this would not be a reason to get approval for limited full-time study. So there is going to be this small gap where unless you want to go full-time into study then you actually will not be able to access study at all once work obligations kick in because the expectation will be that work obligations take precedence over everything else.So that is a real concern for us despite the fact like I said that we do support the amendments to the Education Act for the purpose of this bill. They need to be done because we do not want our students who are sole parents to be disadvantaged in any way. There were a few submissions that came through to the select committee that touched on the importance of this. One of those submissions was from the National Council of Women. It talked about how clause 10 amends various schedules which is also reflected in an amendment to the Education Act 1989 to cover students with dependent children. The council’s concern was that students with dependent children would be covered. Caritas also pointed out the importance of ensuring that this allowance carried over to students who are supporting children.The Child Poverty Action Group also pointed this out. The group noted the intention to allow student parents on allowances to access the $25 increase in benefit. The Child Poverty Action Group said that given this intent it was actually concerned that if this was done in terms of the $25 increase there could be no justification for denying students the in-work tax credit for their children as well which I think was a really interesting argument. I wonder whether or not the Minister for Social Development took that into consideration when reading that submission from the Child Poverty Action Group.We had another submitter Graham Howell who talked about the importance of ensuring that this $25 was made available to sole parents on a student allowance. Law for Change which represents a whole lot of students—a large number of whom it says are concurrently not only studying but supporting children—was pushing for the fact that this needed to be reflected in student allowances. I think it is still an area that we do need to look at. I know that the Government has made changes with things like the accommodation supplement so that applies to students who are on student allowances and to sole parents. I have been told that there are still other areas—JACINDA ARDERN (Labour): Coming to Part 2 this amendsthe Education Act 1989 as my colleague Carmel Sepuloni mentioned and also ensures via a number of technical amendments that adjustments made as part of the legislation do not allow duplication in Consumers Price Index adjustments.I just want to come to that point. If I am reading Part 2 correctly via using the regulatory impact statement it talks about the way that generally within the bill benefit indexation and the annual Consumers Price Index adjustments will apply to this new $25 increase. I just want to reflect on the statements made in the regulatory impact statement. Paragraph 193 states: “Annual increases to benefit rates to reflect upward movement in the Consumer Price Index (CPI) were legislated for in 2010 and occurred prior to that by convention.” That is a point I think is important to make. So we legislated that Consumers Price Index adjustments would be made to benefit rates in 2010. It continues saying “[t]he Bill does not amend the legislative requirement that base benefit and student allowance rates”—which are talked about in Part 2—“must be adjusted by any upward percentage movement in the CPI.” so it does not change that legislation.There was some discussion as discussed in this summary—actually I think it is the departmental report I am referring to excuse me rather than the regulatory impact statement. It states: “[i]ndexation to wages or relative to rates of New Zealand Superannuation as proposed by some submitters is outside the scope of the Bill.” We accept that. It states: “The Bill does however include benefit and student allowance provisions that specify the Consumer Price Index treatment of the $25 on 1 April.” This is the bit where it gets interesting: “On 1 April 2016 the $25 increase is effectively added after the annual CPI increases to the base benefit and allowance rates are applied. This means that on 1 April 2016 the relevant benefit or student allowance base rate as at 31 March is increased to reflect the annual CPI increase. The additional $25 is then added to form a new base rate.”So for the next Consumers Price Index adjustment that we have on 1 April 2016 our base rate adjustments will occur and then the $25 is added to that base rate. So the $25 when it is first added will not have a Consumers Price Index adjustment made to it. Why is that? That seems like a bit of hair splitting to me. If the $25 is meant to be an increase to the base rate make it to the base rate straight off the bat and give the whole thing a Consumers Price Index adjustment. Because if the Consumers Price Index adjustment is meant to reflect increases in the cost of living then why would we exclude the increase in the base rate from that when already I think that it is fair to say the $25 increase should have happened at the time that it was announced rather than projecting it out to 1 April 2016? To then add insult to injury and not have that adjusted as part of the Consumers Price Index adjustment seems a little Scrooge-like from my perspective.I would be really interested to hear from the Minister for Social Development what difference that made to the overall cost of the package. I mean we already know that that $25 is affected by a range of other deductions. Surely—surely—the Government could have been generous enough to at least just allow that $25 to be included in that Consumers Price Index adjustment if it is indeed a part of a base benefit rate.And we certainly know that the Government has crowed about the fact that it calls this the first benefit increase in however many years. Putting aside the fact that that is actually incorrect—the first significant benefit increase was via the family tax credit as part of the Working for Families package. That was the last generous increase to the benefit rate. It might have had a different name but it had the same effect. So if it is truly a base increase then I would have thought that the Government would not need to be quite that Scrooge-like. I am interested in the Minister’s response to that.But as Part 2 obviously is talking again about the interaction between these different payments—Consumers Price Index adjustments and so on—I think that it is also worth pointing out some of the wider interaction between benefit provision particularly for sole parents and our student allowance regime. Credit where credit is due—the Government has made some tweaks to the interaction between the student allowance regime and sole parent benefits to remove some of the anomalies and I want to say to the Government that that was a good thing to do. Because we did have a situation for a while there where if you were one of the people affected by section 303 of the Education Act if you were a sole parent but you were in study so you were in receipt of a student allowance your access to accommodation support was less generous thus incentivising you to be on a sole parent payment. Then some of the requirements around the sole parent regime changed. That meant that you could not really study particularly and be on that regime so it then forced you back on to that less generous support. So it is good that some of the accommodation changes have been made in that area to remove those anomalies.But I would still like to point out that for the group of people who are affected by Part 2 who are in the category of being on a student allowance and might be in receipt of this base benefit increase—that is people who are in study and have children—we do still see a situation where for instance parents who are eligible for benefit support but are studying have work-testing requirements on them that are just unrealistic and do not take into account the longer-term benefit for taxpayers let alone for those families.Let me give you an example. I had a case brought to my attention not too long ago of someone who was in study. They were studying to be a nurse they had been in part-time work and on a benefit and they realised that at that rate they were going to be on a benefit for a very long time and that that was not of use to her her child or to the State. So she transitioned into study was able to still be in receipt of a benefit but Work and Income pulled her in one day and said: “Look we have found part-time work that you are obliged by virtue of the age of your child to be in regardless of your study and which we would like you to take up.” She pointed out that that part-time work which from memory was in hospitality clashed with her course work meaning she would be unable to continue with her studies. Based on the legislative requirements for that particular individual she was required to take up that part-time work obligation and withdraw from her study.We would advise taking a longer-term view for this bill in particular. For those individuals who are captured by student allowance payments or are in part-time study or what have you if we take the longer-term view that allows the discretion to say: “Regardless of any of the obligations set out in Part 1 if you are in study we take a broader view. If for instance we find some hours that the law actually would require you need to work say in dishwashing and that happens to clash with some study that you are doing that in 2 years’ time will mean you are not reliant on a benefit at all then we will take some leniency in those situations.”Because if the ultimate goal is to have someone independent some of these part-time service industry jobs will not necessarily lend themselves to that. At that point we are in a position where we are cutting off our nose to spite our face. If the longer-term goal is assisting those in hardship and children in hardship we know that well-paid decent stable work is the goal not just work at any cost. We know there are a number of jobs where there is a significant amount of cost subsidy going on by the State to sustain people at an income level that means that they are able to support their children and to support their family.So in summary Part 2—yes it is a fairly minor part of the bill. The number of people who are covered by it are an interesting cohort who deserve greater discretion but actually what they also deserve is a Consumers Price Index adjustment to their base benefit and their base benefit as argued by the Government is meant to now include that extra $25. So why do we not treat it like that from the beginning and not just at a designated year that is convenient for the Government to prescribe?TODD MULLER (National—Bay of Plenty): I rise to take a short call to talk about Part 2; in particular comments around the amendment of the Education Act. As already discussed this particular part facilitates a matching $25 increase achieved through regulations to the student allowance rates for students with dependent children. We have of course promoted this to ensure that we do not create an incentive to move from study to benefit rates to ensure that the support is provided for those who qualify whilst at study. There is also a consequential amendment—it was discussed in some part by the previous speaker—to provide that the student allowance Consumers Price Index adjustment is applied on 31 March 2016 and that that happens before the adjustment then occurs the $25 increase on the next day.I think that does make sense. It is going to take us a little while as the various official reports have suggested to be able to get this packageright—it is a large one; it is the largest as has been said for many many years—to get the systems in place to enable it. So that 1 April target date I think is the appropriate one. This as already discussed is a relatively small part of this very large and comprehensive support package of over $750 million. The regulatory impact statement itself talks about this particular part being an extra spend of $1.8 million in 2015-16 rising to $6 million in 2017-18. So obviously in the context of the overall package it is not huge but it is important to ensure that when you do something you do it right and make sure that all the appropriate consequential amendments occur. In terms of the overall complexity of the systems change that this particular part enables the regulatory impact statement again suggests that this is moderate—moderate changes to IT systems and processes to enable it.We had some conversation about this particular part in our select committee deliberations—some submissions. Some have been referenced already. I do want to draw the Committee’s attention to a couple of submitters. Law for Change submitted on this particular point and stated that by increasing support for students with children education would become a more feasible choice for parents and in their view greater assistance to enable parents to attain qualifications will help to reduce welfare dependence in the long term.We also had a specific submission on this particular part by the New Zealand Federation of Business and Professional Women which was also supportive of the increase quite explicitly so as it would enable parents with children to continue to participate in the education system. If I could quote specifically from Caritas Aotearoa - New Zealand again in respect of this particular part: “We also welcome the adjustments to be made to student allowances to ensure that children in those families have the same advantage.”Overall in terms of the submitters on this particular point they were all supportive of the increase in the student allowance for students with children and the fact that it was mirroring the increase in main benefit rates. Most of the submitters were of the view that increasing support for students with children will help improve the long-term prospects of that particular family.This is a small part of a comprehensive bill that I have huge pride in being able to stand in support of. It provides significant support for those who are most vulnerable. There is not crowing; this is a Government that focuses on those who are most vulnerable and does it in a comprehensive considered and reflective way. I am sure that it will be appreciated by those who receive it. Thank you.SUE MORONEY (Labour): It is a pleasure to rise and speak in support of Part 2 of the Support for Children in Hardship Bill. This is the part that amends the Education Act 1989. As the previous speaker Todd Muller said it is an attempt to make sure that the same payment exists for people whether they are in full-time study or whether they are in receipt of the unemployment benefit—or in fact whatever we call this thing these days; I think it is jobseeker support. It seems to have a whole range of different titles but it is what we know as the support that people get if they have children—in particular with this bill—and they have not got employment. It does attempt to actually get these two things lined up together so that there is not an incentive for people to give up the future that comes with being in full-time study and instead go on another payment.However I do have to agree with the contribution made by Jacinda Ardern previously that it does actually show a very miserly approach from the Government to this particular part. Let us remember that the people who are going to be in receipt of this payment which is described in Part 2 are people in the most dire hardship. These are families in the most dire hardship. The reality is that the $25 a week is not actually going to lift them out of poverty because they are so far below the poverty line that they are not going to be lifted to being even close to getting out of poverty. So let us just remember it in that context and then let us apply Part 2 to that because effectively what it is saying is that people will get a Consumers Price Index adjustment to their student allowance before the $25 is applied to it.I just want to quantify that a little. The Minister will have the actual figures so I would ask her to share those with the Committee but what is the impact of putting $25 on to the base rate first before the Consumers Price Index is adjusted? At the moment I believe the Consumers Price Index is running at something like about 0.4 percent; it is certainly below 1 percent. On 1 April next year it will be expected to be running a great deal higher—well we cannot look into that particular crystal ball and know but let us imagine that it does creep up to say around 1 percent Consumers Price Index. One percent of $25 is 25c. That is effectively what we are quibbling over here in Part 2. We are taking this debate up quibbling over the people in the most dire need perhaps getting 25c or less more than if Part 2 was not there at all.If Part 2 was not here the impact would be that the $25 would be applied to the student allowance first before the 1 April Consumers Price Index adjustment was made. I just want members opposite to reflect on that. We are quibbling about less than 25c and it does not seem to me that that would be an awful lot to ask. But instead—I would hate to think how much time we spent on the officials getting the wording right to avoid that additional 25c payment because it is going to happen once and once only and that is on 1 April next year.We have already addressed that in the previous part when it comes to the—what is it called? Is it called the supported living allowance? No—what is it called?Jacinda Ardern: The supported living payment.SUE MORONEY: The supported living payment thank you. We have already done exactly the same measure for that and now in Part 2 we are applying it to the Education Act with regard to the student allowance. But in both of those instances we are talking about a tiny amount of money and probably an awful lot of energy and time. It would be interesting to know the costings of how much time officials spent on coming up with this drafting to avoid that small amount of money.I am speaking in support of the bill generally. I do not see that Part 2 actually adds much value. In fact it takes away a small amount of value and takes an awful lot of words to do that. Maybe the Government thinks that it is somehow double-dipping but in fact the $25 should be applied to the base allowance and that should have the Consumers Price Index adjusted to it as well.Hon DAVID CUNLIFFE (Labour—New Lynn): It is a pleasure to take a call in this Committee stage of the Support for Children in Hardship Bill. I have got a couple of points to make on this small part Part 2. The first is one of construction and drafting and the second is a general point about Part 2’s interface with student support in tertiary education.Firstly it is a common feature of this debate that the Government’s moves here have been designed to give the impression of relief from poverty rather than necessarily being the best-designed actual impact. When we review the drafting of clause 12 in Part 2 we see partly how this smoke and mirrors is constructed. If I read from subclause (1) which inserts after section 303(3B) a new subsection (3BA)—and people at home may have an interesting time trying to follow this—this relates to beneficiaries who are on a student allowance. It is designed to transfer the $25-a-week increase to their allowances and to avoid double-counting which you might say is a reasonable aim. But the way this is drafted is just—arcane would be the nicest way to put it.It says: “Despite subsection (3B) if any rate of student allowance is increased on 1 April 2016 by regulations (regulations A) not being the regulations required to be made under subsection (3B) that come into force on 1 April 2016 [which of course are] (regulations B) then—(a) regulations A come into force immediately before regulations B; and (b) the adjustment to the rate of the allowance required to be made by regulations B is to the rate as at 31 March 2016; and (c) the amount by which the rate of allowance is increased by regulations A is added to the adjustment made by regulations B.” I am sure everyone at home has followed that—it is complete gobbledegook.It may be logically and semantically correct in that it does partition the time periods and applies the increase but my goodness me if this was a Government committed to plain English drafting and transparent policy it has got to fail that test unless everybody has got a PhD in legal semantics. But of course that belies the broader point which is that this is a bill that in the same spirit of obfuscation gives and takes away at the same time. It ostensibly gives $25 a week but as our colleague Jacinda Ardern has rightly said it would have been better to put that just straight into the base rate. As my colleague Sue Moroney has said the net impact on poverty reduction is actually minuscule and therefore this is a fairly expensive glossy public relations piece but does nothing much to achieve its aim.But I want to draw out the implication for tertiary education because of course this applies to solo parents struggling—as I think we would all commend them for—to get a qualification so that they can get a job and get off the benefit. The fact is that some 90 percent of children who are in severe hardship are in solo parent families—single income families and often beneficiaries. That is just the reality. We all know that costs for solo families are harder to afford. You have got only one income earner but most of the same costs such as the roof over your head the groceries—kids eat a lot—school fees uniforms project costs you name it. Now of course you really need a computer to take to school. So those costs seem to be going up and up and up and parents are finding it harder and harder and harder. So that is one thing.The second thing is that in terms of this application in Part 2 to part-time students there are going to be more people in that category because we all know in terms of the future of work as has been studied by Labour’s Future of Work Commission that jobs are changing. We are not going to see people with one career for the whole of their lives. We are going to see people with five 10 15 different jobs just because the nature of the job market is changing. This is not to mention the fact that solo parents are often casualised vulnerable in part-time employment with no protection from employment rights. The law changes under this Government have made that so much worse. Solo parents have become so much more vulnerable.What is the Government’s answer to that problem? Well it is right here—it is right here. You get the twenty-five bucks a week but the solo parent now has to go to work when the youngest child turns 3 not 5—3 not 5.Dr PARMJEET PARMAR (National): Thank you for the opportunity to take this call on the Support for Children in Hardship Bill in the Committee of the whole House. This bill is to support children in hardship and especially children in low-income families. This is for benefit-dependent families and families dependent on student allowances. We know that two-thirds of children in material hardship are in benefit-dependent families or in some kind of other benefit-dependent families. This is in the evidence that shows that we need to focus on those families who are on low incomes. This bill is to give an increment in the base benefit rate after tax of $25. In Part 2 it matches that increment with the student allowance. I am not going to list the things that people can buy with this $25 but I totally trust those families to make wise decisions for their children and their families.This bill is a very fair bill because we are giving an increment in the benefit rate. We are also matching it for the student allowance because we do not want people receiving the student allowance to feel that they are being disadvantaged because they are on a student allowance. This increment will be achieved through regulations. This bill amends the Education Act 1989 to ensure that the increase in the student allowance rate is not subject to the annual New Zealand Consumers Price Index adjustment which is on 1 April 2016. So this increase will be on top of that.We want parents to be in education we want parents to be in some kind of training and then we want them to get into jobs. That was recognised by submitters during the select committee process. Submitters recognised that the employment of caregivers was an important factor in reducing the poverty and hardship of children in low-income families. Submitters also recognised that currently in New Zealand the poverty rates are the highest in families where no adult is in paid employment. It is important that parents are in education and some kind of training so that later on they can get into some kind of employment. It is good for the family—for parents and for children as well in the long run.I have heard a lot about the part-time work obligation for sole parents. That is actually a step in the right direction. We have seen the numbers which show that when there is encouragement for sole parents they do get into work. It is about providing the environment that encourages them and assists them to get into work. I have also heard the argument that different families have different kinds of circumstances and sometimes children at the age of 3 are not ready to be at an early childhood education centre or a day-care centre. My opinion as a mother of two children is that children will never be ready if we do not train them. As a mother I remember when I used to drop my boys off at the day-care centre. It was not easy for the first 2 to 3 weeks. It was not just me; other parents were going through the same kind of phase. We used to hide and watch our children. Once we were convinced that they had calmed down we would go to work.When I used to drop my boys off at the day-care centre I would see some children there who were much younger than my boys. That gave me a sense of what those people felt about being financially independent. This bill is about helping people encouraging people to become financially independent. Childcare assistance—yes it is important if we want people to get into training or education.The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member. I will apologise because I think that at least one of the speakers before her went quite a long way off the point on this particular part of the bill. She is going further off it and I would like to bring her back to Part 2 of the bill. Thank you.Dr PARMJEET PARMAR: Thank you Mr Chair. Yes I was responding to the previous speaker. Yes Part 2 is about amending the Education Act 1989 and also matching the $25 increase through regulations.The other thing that is related to this part is that it is important that we are fair with people—those who are receiving a benefit and those who are receiving the student allowance. We do not want people—those who are receiving the student allowance—to give up their student allowance and go on to a benefit because of the $25 increment that people are getting because they are on a benefit. This bill overall is to encourage people to get into training and jobs and for that—STUART NASH (Labour—Napier): That was quite an interesting speech. I mean I have got four children and I would not say I ever trained my kids—Hon Member: Or chained.STUART NASH: —or chained—certainly before the age of 3. I think I understood what the member was saying but I am not too sure.I would like to speak to the amendment to the Education Act 1989 that is found in Part 2. One of the reasons I decided to jump up about this is that I am passionate about education. I actually think education provides opportunities for people where opportunities would not exist if they were not educated. I have a poster in my office. It is a quote from Malcolm X and it says: “Without education you’re not going anywhere in this world.” He said that in 1963 and I think that is truer today than it certainly was a generation or two ago when the Minister was just starting out in work.The other thing I would also like to say is that we know the cost to society of someone who is on the unemployment benefit versus the contribution that that person makes when they are working. But the cost and the contribution are not necessarily measured just in financial terms; they are also measured in societal terms. Let me give you an indication of this. There is a whole lot of research out there that indicates that when parents are working in meaningful jobs—or in any job I should say—the impact that has on the children is significant in terms of role models in terms of quality of life and in terms of all the things that children actually need in order to have the opportunity to be high-functioning adults as they mature.I would argue that not only should there not be any differentiation between the unemployment benefit versus the student allowance but I believe there should be a significant benefit for people who have children and who have decided to go back to study. It is a massive—The CHAIRPERSON (Hon Trevor Mallard): I am now going to interrupt this member and say that this is quite a narrow part of the bill. He is making a really interesting speech as have previous speakers that could almost be applied to the second reading but it might even be out of order at that point. So I ask the member to come back to this part of the bill.STUART NASH: Thank you Mr Chair. I suppose what I was trying to do was paint a picture.This part of the bill talks about Consumers Price Index increases and how the Education Act must be amended to put this bill into force to allow that to happen. If you look at section 303(3B) of the Education Act the amendment in clause 12 is inserted after section 303(3B) of the Education Act and new section 303(6) says: “Subsection (3BA) is repealed on 30 April 2016 and this subsection is repealed immediately after.” But I suppose what I was attempting to do was highlight the importance of education to society and just say that any changes made under any legislation whether it be the Support for Children in Hardship Bill or any other piece of legislation before the House should I believe take into account the overall benefits—not just the fiscal costs but the overall benefits—to society and to those children in hardship.We are talking about student allowances here. We are talking about Consumers Price Index adjustments and it is not a major amendment in this bill. It is not as if we are taking the Education Act 1989 which is in essence a very large piece of legislation that has been amended many times and overhauling it. What we are in effect doing is taking just a little subsection of this to make sure that we do address the issues of support for children in hardship.I do not think—and I think it is agreed by everyone—that there is a greater challenge in society today than supporting children who are in hardship. We had the Children’s Commissioner address some of the caucus members earlier on today. We all know that he is doing a fantastic job in terms of highlighting the issues of children in poverty and child poverty and doing what absolutely needs to be done to raise awareness and lift these children out of that. Education is a way to do that and certainly education of the parents is vital in creating work habits that will lead these children to you know create work habits themselves I suppose.So I would have liked to see greater amendments being made to the Education Act 1989 to be honest. I would have liked to see the Government go a lot further. I would have liked to see a much higher incentive between the unemployment benefit and the student allowance for parents with children. The reason for that—CARMEL SEPULONI (Labour—Kelston): That was a very good contribution from my colleague Stuart Nash. Thank you very much Stuart Nash. I just want to refer to the departmental disclosure statement for the Support for Children in Hardship Bill. That states clearly that: “The Bill also makes a number of consequential amendments that result from the increased benefit and tax credit financial assistance and extended work availability obligations. These changes”—as discussed by some of the people in the Chamber—“include: an amendment to the Education Act is required to provide that the Student Allowance CPI adjustment is applied to 31 March 2016 allowance rates before the Package increases to those rates are made on 1 April 2016.” As I have said earlier and as I have pointed out many of the submitters were supportive of this because they did not want sole parents who were studying to be disadvantaged in any way compared with those who may be on the benefit and not yet in work or in study.But there were a number of submitters who looked at this in relation to the in-work tax credits situation. Whenever this came up we had a number of submitters who also pointed out something needed to be done with tax credits. So we had the New Zealand Federation of Business and Professional Women Inc. which welcomed “the amendments to the Education Act that also allows an adult parent continuing their education who is also classified as low income to be eligible for this payment of $25.” but they “would also like to see this group of New Zealanders entitled to the same work tax credits as those not choosing to further their education.”So that is really interesting because it is not just the New Zealand Federation of Business and Professional Women Inc. that supported that but also the New Zealand Council of Christian Social Services. It thought that “In the context of this bill it would be reasonable to assume the targeted children living in smaller households are more likely to benefit from any additional income received through the proposed policy levers.”—so the benefit rates being lifted by $25; Working for Families $12.50; childcare subsidy a slight increase there; and student assistance—“when compared to the same targeted group living in a larger household”. But it did point out that: “In short the bigger the family/whanau the tighter the financial stretch across each family member.”So the Education Act will be amended to ensure that the $25 increase goes to those sole parents who are studying but the same issue is in place for those students—that is that the bigger the family the more children in that family and the tighter the financial stretch. In fact the New Zealand Council of Christian Social Services pointed out some research by Michael Fletcher who is a senior lecturer at Auckland University of Technology. He writes in his analysis of the full package that “a sole parent family with two children will still be around $77 per week below the lowest poverty threshold measured by the Ministry of Social Development” and that is something that I think we should all be concerned about.Although the New Zealand Council of Christian Social Services supported the proposed increase to the benefit rate it felt that it did have the potential to create more complexity in the system which could undermine the intent of the Bill so we need to take that into consideration. It also pointed out the fact that $22.456 million over 4 years is identified as the implementation cost of introducing the proposed changes—across the benefit system and across the allowance system. It highlighted that this came up in the regulatory impact statement and that this is really a substantive amount of public money that the New Zealand Council of Christian Social Services felt might have better gone directly to the children who are in need. So the New Zealand Council of Christian Social Services recommended that the number of children in a household be incorporated into—The CHAIRPERSON (Lindsay Tisch): Tie it back to Part 2.CARMEL SEPULONI: Yes sure—so that it was not just a $25 increase for students on a student allowance who were sole parents with children or for sole parent beneficiaries; it was not just $25 in the amendment that was given to them but that it would be $25 per child. Obviously that would have had an impact on Part 2—The CHAIRPERSON (Lindsay Tisch): We are discussing amendments to the Education Act. That is what Part 2 is about.CARMEL SEPULONI: That would have had an impact on the amendments to the Education Act because we would not be amending it—SARAH DOWIE (National—Invercargill): I move That the question be now put.Motion agreed to.Part 2 agreed to.Part 3 Amendments to Inland Revenue ActsJACINDA ARDERN (Labour): We come now in Part 3 of the bill to the amendments that relate to the inland revenue Acts. There has not been a significant amount of debate in this Committee on these elements of the bill but what we are debating does affect the current in-work tax credit the minimum family tax credit and some of the abatement rates and thresholds—so all of those obviously relate to the inland revenue Acts.I thought what may be most useful in my contribution on Part 3 is to reflect on some of the analysis that was carried out by submitters for this part of the legislation because obviously what I think we all need to concede in this Committee is that we do have a relatively complex range of tax credits in this space.What is clear when you are debating any kinds of changes to family support is that they are not particularly well-known or well understood. For instance the Working for Families tax credit package is often just known for the in-work tax credit but that is only one element of that package. There is also the family tax credit which obviously applies to beneficiaries and there is the overlay of a minimum family tax credit which exists to ensure that the minimum amount a family will receive in work is above the benefit rate. Overlying all of that of course is the abatement regimes that apply to all of those tax credits and so on. It is a reasonably complex environment that this new change has come in and added itself to. So it is good I think if we reflect upon the analysis provided by some of those submitters.So as I said in Part 3 we are looking at three elements: the in-work tax credit the minimum family tax credit and abatement. When it comes to the minimum family tax credit as I said this provides a guaranteed minimum level of after-tax income to low-income families in full-time work. There is this assumption that if you are in full-time work you always need to be earning above a benefit rate in order to create the incentive to be in work rather than on a benefit. That incentive is inherently built into our system. I think we should be really clear on that.In fact most of the analysis around the gaps between benefit rates and rates in work demonstrate that a significant gap has actually grown into our system—a significant gap—which is why it is so hard to adjust child poverty rates. In fact I would be really interested to hear the Minister’s view on the role of the minimum family tax credit now because the analysis by the Child Poverty Action Group suggests that we have about 4000 families receiving that tax credit of roughly $12 a week. So it is a minimal payment for a small number of people which I think demonstrates that inherently our system does make sure that there is a significant difference between what you receive in work and what you receive on a benefit and I would say that that has to be credited to some of those tax credit regimes already in place.Putting that aside let us come now to the in-work tax credit and the question of whether the Minister considered removing the minimum family tax credit and perhaps just bolstering for instance the family tax credit generally. I would be really interested to hear that.The in-work tax credit obviously has not been a credit that is without controversy but the Children’s Commissioner supported in his submission the increase in support for Working for Families. He was of the view that the increase to the per-family rate of the in-work tax credit would be unlikely to make a significant impact for children in larger families. This comes back to the point we were making earlier that in our view any change the Government was going to make—whether it was $25 a week to the base benefit rate—should have been per child. I think that is a position that is being endorsed here by the Children’s Commissioner. The Diocese of Christchurch Child Poverty Advocate submitted that the increase in Working for Families was in its view minimal and unlikely to make a significant impact.I guess our view again would be shared—we are in support of any increase in those base rates. The in-work tax credit we need to keep in mind though is obviously about creating that differentiation between benefit and work so it is benefiting those who are in work. The point we probably need to make there is that those in work are often still in poverty as well so we cannot I think make the simple assumption as the Minister and others have claimed that work is the sole answer. We know that it is not necessarily.I come to the minimum family tax credit. I have already spoken on that so let us actually dodge over that and come straight to the wider issue of abatement and threshold changes. Here obviously we are working in an environment where there have been a number of changes already made by that Government to abatement regimes and one of the points that was made by submitters is that for some this increase will not actually bring those families up to the level where they were prior to the Government’s tweaking with Working for Families and the changes to that regime.The Children’s Commissioner again talked about changes to the abatement rates and stated a concern that they would reduce support for low-income families with children. The Children’s Commissioner’s submission noted that the change in abatement rates would mean that families earning over $36350 would have their tax credits reduced at a higher rate. I think we would all agree that a family earning $36350 is not a family flush with cash when it potentially is raising multiple children in that situation and we can add to that high accommodation costs. That is a difficult situation.The submission also noted that the impact of the abatement rate will be greater than the increase in the in-work tax credit for families over $88000 per annum so overall the Children’s Commissioner is obviously of the view that the increase in the abatement rate will reduce support for families who are only moderately better off. Again abatement rates are always problematic. There is always a point at which you have to start putting in a decline unless you are looking at universality of course to some degree. But I think the point that has been made here is perhaps that the point at which it is being added is not the right place. The changes over years that have been made by the Government to Working for Families around abatement have had a cumulatively negative impact for families.I want to come to the family tax credit though because this is the element of the Working for Families package that has the broadest reach. My interest in all of this when this was first put before Parliament was about why the family tax credit was not used as the tool to lift incomes for families on low incomes. That would mean that you would help beneficiaries but you would also reach families in work who were in poverty. It is a perfect tool.I asked that question to Mr Perry at the select committee. Mr Perry is obviously at the heart of a lot of the analysis around income adequacy in New Zealand and really key to these pieces of research and debate. The response that I got around why the family tax credit was not used instead of just a base benefit increase was that the Government presented a pool of cash that was available and that the package was designed around that. So rather than coming with an issue and saying “Look we want to reduce the severity and persistence of poverty for children in New Zealand. What can we do?” we instead started with a different premise altogether. I think that very much demonstrates why we have the design that we have in Part 3.As has been summarised by the departmental report submitters did propose that the family tax credit could be increased instead of the in-work tax credit so that all children benefit but it is very clear in this part of the report. It states: “In first developing the Child Material Hardship Package officials considered the full range of instruments available to deliver increased support to children in poverty and hardship. This included a range of tax-credit and benefit change options. Officials were tasked with identifying the most effective and efficient means to provide increased financial support that could be delivered by 1 April 2016 and within a maximum budget allocation of $1 Billion over four years. Officials developed and refined various packages of measures to achieve the desired impact within the allocation and delivery parameters. Ministers selected the option that they considered best met the … intent”.Best met the intent? The intent was to do something by a certain date and do it within a certain pot of money. The intent that was never set out was to find which children are to be targeted and why. If that was the case we would not just have homed in on a change to benefit rates. We would have gone for the family tax credit because that hits poverty. That hits poverty regardless of the source of income and you would not then have had to fiddle around with in-work tax credits and deal separately with base benefit rates.That is the problem with Part 3. It does not use the most useful instrument.CARMEL SEPULONI (Labour—Kelston): I want to talk a little bit in relation to the submissions and their relevance to Part 3 of this bill. When we were talking about tax credits we actually had a number of submitters who pointed out issues with regard to tax credits. Some support was provided but also some concerns were raised so I want to touch on that. I think it is really important that these submitters have their concerns heard during the select committee process but I also think that when we have their support we should make that known.We had the Auckland Action Against Poverty group which said that the $20.11 average benefit increase per week per family was welcomed as was the $8 average in-work tax credit increase per week per family but it pointed out the fact that on their own those increases were insufficient to address hardship for New Zealand children. We had the Child Poverty Action Group discussing the increase to Working for Families tax credits. It stated that “The Bill increases the base rate of the in-work tax credit for low-income working families with children by $12.50 per week from 1 April 2016. CPAG says this reinforces the use of complex work-based measures to meet the needs of children. It would be much preferable to increase the rate of Family Tax Credit by $12.50 so all children benefit.” I wonder whether or not the Minister for Social Development took that into consideration because it was a point that was raised not just by the Child Poverty Action Group but I also think there were some concerns raised by the Children’s Commissioner as well along with individual submitters Graham Howell and Malcolm Croft.When I was looking through Part 3 I did notice the fact that in order to apply this it is the abatement rate that is being lifted slightly and I just wanted to point out that we are very supportive of lifting abatement rates. In fact we had a bill go through the House recently that we were hoping the Minister would support because it could have potentially meant almost $50 extra in the pockets of our poorest families rather than $25 which we accept is something but as we have said on a number of occasions it is not enough. So I would like to know whether or not the Minister took into consideration any of the concerns that were raised not just by the Child Poverty Action Group but also by Auckland Action Against Poverty and whether or not their preference which was to increase the rate of family tax credit by $12.50 so that all children benefit was ever taken into consideration by the Minister or by the National Government.Going to the Children’s Commissioner on this particular part of the bill the Children’s Commissioner pointed out that the gap between market and benefit incomes has steadily grown over the past three decades because benefit incomes are not indexed to the median wage. So I think someone in here pointed out that before benefits were slashed—so around 1991 I think—they were indexed to around 75 percent of the minimum wage but it is so far from that now. And I know that the National Government has touted this as some major offering—the fact that it is giving these families an additional $25 each week—and I know the National Government has tried to highlight the fact that this is the first time benefits have been raised but what the Government has not taken into consideration is that when Labour introduced Working for Families actually—The CHAIRPERSON (Lindsay Tisch): Come back to the bill. Come back to Part 3. Come back.CARMEL SEPULONI: With regard to how it affects these families when Labour did that it lifted something like 120000 children out of poverty. This measure does not lift that number of children out of poverty and I think that that has to be of concern to all of us. So yes I would like to know whether or not the Minister has taken into consideration the preferences raised by the Child Poverty Action Group and any of the concerns around in-work family tax credits and whether there has been any discussion on that.JONO NAYLOR (National): Part 2of this legislation obviously is dealing specifically with the changes to the inland revenue Acts and in particular—Carmel Sepuloni: We’re on Part 3 Jono.JONO NAYLOR: Part 3 there we go. Part 3 not Part 2. Part 3 is in fact the bit that does deal with the inland revenue Acts. Even if I got the part wrong at least I got the issues right.It has got to be fair to say that as well as the significant changes that this bill makes to the payments to families who are beneficiaries these changes also recognise that some families—even though they are in work in some way shape or form—are still experiencing some level of hardship. So this part of the bill is dealing with that part of the equation in particular obviously through the Working for Families part of the programme because we need to ensure that actually we are continuing to work with those families who are finding it hard whatever situation is leading towards that. So from 2016—next year in April—the low to middle income working families who are not on a benefit will get up to $12.50 a week more through Working for Families depending on their income.I have heard a number of comments from members across the other side of the Chamber this afternoon basically calling that amount insignificant—calling the $25 insignificant. They have talked about the price of cheese they have talked about the price of eggs and they have said that this is not necessarily going to simply lift people out of poverty. I do acknowledge that for some people $12.50 does not seem particularly significant but I can say that actually for some people $12.50 is significant and it does make some difference.No one has said—no one has said—that this bill is the silver bullet to solving child poverty in New Zealand. It is part of a suite of things that are being put forward. It is part of addressing the issue. It is part of a measured approach in changes to our benefit system and to our taxation system to ensure that we can provide some level of extra assistance.I can tell you that for the first 4 years that my wife and I were raising our children our primary source of income was the student allowance. That made things pretty difficult but actually after being dependent on the student allowance we were then dependent on a social worker’s starting-out salary and we were grateful for the extra assistance that we got when things were tight at that time through this Working for Families.That is a few moons ago—I know a bit of water has gone under the bridge since then—and it is appropriate now that we have been able to get things into a place where we can afford to lift those amounts particularly by increasing the in-work family tax credit by $12.50 and also through the minimum family tax credit to ensure that some of these families are going to get that little bit extra. In order for us to do that obviously we have got to put that in the context of everything else that this Government is doing.This is not a silver bullet and this is not a one-off thing that is happening. This is part of a suite of measures that this Government has been putting in place to actually address some of the issues that need to be addressed and this particular bill needs to be seen alongside those things as well.JAN LOGIE (Green): I rise to take a call on this bill on Part 3 and look at the changes to the family tax credit. In my contribution I would like to draw heavily from the submission from Susan St John and the Child Poverty Action Group which was supported by other submitters at least in part. She pointed out that this aspect of the bill was where the Government decided to increase the discriminatory aspects of Working for Families. We have already had a case that the Child Poverty Action Group took to the Court of Appeal that established that Working for Families has elements that are discriminatory—discriminatory against children whose parents are out of the paid workforce.This bill increases that discrimination because the aspects of Working for Families that are available to children whose parents are not in work have not been touched in this aspect of the bill. So what it does is it provides an extra $12.50 not to all poor children but only to those whose parents are in 20-plus hours of paid work a week. It will increase their income from $60 to $72.50 which is just an inflation adjustment in actual fact she told us. So although the Government is telling us that here it is targeting its support and helping these families out this is an inflation adjustment. This is the extent of this Government’s support for struggling working families and child poverty.So this minimum family tax credit will apply to only 3500 families which is hardly a significant number when we are looking at the scale of child poverty in this country. I really do think that it needs to be pointed out that Jonathan Boston did say that it may—and that is underlined “may”—have a positive impact on child-income poverty rates and deprivation rates but the impact is likely to be very marginal and again that is underlined. So that is a problem. This is doing nothing really to address the absolute real tragedy that is going on in our country at the moment.But there is a part of this that I think galls me even more and made it very difficult for me in terms of our vote. It is that the Government is taking from poor families to be able to deliver this inflation adjustment. The Child Poverty Action Group was saying that by its calculations a family earning the minimum wage and working 60 hours a week on $46000 a year is about to be $2225 a year worse off in real terms as a result of these provisions. So here we are giving $12.50 a week extra to children who have parents who are working entrenching inequality and discrimination and giving just a small amount of help and that money is being taken from families who are also struggling. To me that is actually just unconscionable. It does not make sense in terms of ensuring everyone in our society is able to participate.I think also if you look at the wider perspective in terms of New Zealand’s support for Working for Families which is supposedly a large part of this Government’s policy intent—to get people into work you need to recognise that there was a 2011 OECD report that found that New Zealand’s childcare subsidies are the most tightly targeted towards low-income families of all the 30 developed nations and that we have no tax-free threshold for low-income earners. And that 2012 OECD report found that a Kiwi couple with two kids aged 2 and 3 where one parent earned the average wage and the other earned two-thirds of the average wage would lose 97.9c out of every extra dollar from the second earner’s wage via a combination of childcare costs reduced tax credits—which are being changed in this bill—subsidies and higher taxes excluding petrol and other costs. Effectively taking in the other costs of work that person is working for less than nothing.This is a Government whose policies supposedly support paid employment. This is the worst outcome for any of the 34 countries listed and is compared with an OECD average of 57c in the dollar. Did you get that? It is 97.9c in the dollar compared with the OECD average of 57c in the dollar. That is this Government’s approach to supporting our families. Rather than the Government focusing on making that better supporting these families and rewarding work where it is appropriate and making sure that we have a strong safety net it has actually made things worse. The Working for Families tax credit used to be indexed to the Consumers Price Index but since the law change was made in 2011 families have had to wait until inflation reaches 5 percent before there is an increase to their Working for Families payment. This has already saved the Government it is estimated over $1.1 billion. My understanding is that that is significantly more than the cost of this entire child hardship package.So when the Government is telling us that it cares about child poverty and it cares about the fact that there are children in this country without shoes without three meals a day without a bed of their own and without the family being able to buy them presents on their birthday and that there are children who are worried and excluded at school and who cannot afford to go on school trips or attend any events—when the Government tells us that it cares about that actually we need to look at what it is prioritising. If this bill is its main initiative and it is spending less on it that it has saved in the changes to Working for Families then I have got to say that I am struggling to find that credible. I really am very clear that this is not delivering on what New Zealanders have told us they want for their children.The outpouring of grief as I think you could describe it from New Zealanders in response to the campaigns around child poverty and even feeding children school lunches—which would not have been very expensive either but which somehow this Government could not bring itself to support—has been clear. New Zealanders want a society where every single child has the opportunities to succeed in life. This bill is not delivering that. This bill—The CHAIRPERSON (Lindsay Tisch): Come back to Part 3—back to Part 3.JAN LOGIE: —is ensuring that those barriers are kept in front of our children. It is preventing many from succeeding and sadly it is entrenching inequality and discrimination which is not justified by any means from my perspective.IAIN LEES-GALLOWAY (Labour—Palmerston North): I raise a point of order Mr Chairperson. Sorry but we have had a couple of messages from people watching Parliament on television saying that there are some issues with the sound system. I was just wondering whether you could get the technicians to check that out.The CHAIRPERSON (Lindsay Tisch): Thank you. Through the microphones I take it? I will just ask the messengers. Thank you very much.POTO WILLIAMS (Labour—Christchurch East): I am going to take just a short call on this because as you would appreciate the amendments to the inland revenue Acts are not my strong point. However I do want to talk about clause 15 which amends the abatement rate and also clause 14 which is the base rate for the in-work tax credit. Some of the submitters spoke at length about the in-work tax credit and the inability of the in-work tax credit to do anything significant to address the issue of child poverty in New Zealand. One submitter actually stated that the use of the in-work tax credit has among other things raised human rights concerns that have necessitated complex adjustments to the tax system. They went on to state that consideration should be given to the Child Poverty Action Group’s recommendation to increase the rate of the family tax credit so that all children benefit.When I look at page 31 of the regulatory impact statement which sets out the table of the impact of the package on household budgets in relation to in-work tax credits family tax credits accommodation supplements childcare assistance and the like it is obvious that this bill is going to have a minimal effect on actually raising incomes for those families. This is because regardless of whether you are receiving an in-work tax credit—you know if you are working 40 hours of the week and have four children—you are on average going to receive an increase in your net household budget of $17.50. In fact across all of this table regardless of whether you are a jobseeker a couple working 40 hours between you or a sole parent on sole parent support the rate remains around the $17.50 mark per week except if you are a couple working about 60 hours between you which means you also get $30.50 for childcare assistance.But I want to qualify that with the statement that is made above this table. It states that this table has been presented based on the assumption that in all cases the wage rate is $15 an hour and the family is based in South Auckland and paying close to a median rent for suitably sized accommodation. Well I would have to argue that in relation to the cost of accommodation in South Auckland in particular and Auckland in general that $17.50 makes very little difference. In fact families will find themselves in a negative position in relation to the cost of accommodation.So although the Government members have said that this is part of a suite of measures to support children in hardship there has not been anything demonstrated to date that would actually address the significant impact of accommodation costs on families particularly if we are talking large numbers of families in South Auckland who are purported to be supported by this bill. That is my contribution. Thank you.The CHAIRPERSON (Lindsay Tisch): Sorry members there is a problem with the sound on Parliament TV and the web streaming. Technicians are working on that to resolve the issue so thank you for bringing it to my attention.STUART SMITH (National—Kaikōura): It is a pleasure to rise and speak to Part 3 in this Committee of the whole House stage which relates to the inland revenue Acts. I have listened with interest to some of the contributions coming from across the Committee this evening. I think it has been quite interesting. I note one of the speakers pointed out that submitters were grateful for the increases but did not feel that they had gone far enough. I think that that actually lines up with quite a few of the Opposition’s contributions this evening. I think that is quite ironic because that particular party had 9 years in Government and chose not to do anything about it. [Interruption] They may well yawn but really it must be a real source of embarrassment for them when we come to Part 3.Part 3 deals very much with how people receive their abatements and so on. We have also heard quite a number of contributions about what is the best way to deal with raising these particular benefits for those people and saying that it does not go far enough because it does not get up close to the wages of people working. But that is the point. Really benefits are there as a safety net and the benefit to families and children living in a family where their parent or parents or caregivers are working—that example that they see every day is worth lots and lots to those people which cannot be measured in dollar terms. I think that that has been completely forgotten by the other side.It is very easy to complain. One person alluded to a bill that would have added $50 a week to the abatement rate. That is all very well if you do not have to balance the books. And what about the people who are out there working and showing that great example to their families about what the benefit of a day’s work is? When you have earned the money yourself it is worth far more to you and you will spend it more carefully than something that is given to you which actually tends to have not much value at all.I really was quite interested in the arguments about the vehicle for increasing benefits because you can go backwards and forwards across it but Ministers considered this very carefully. The Minister herself has spent a lot of time on this bill. She has talked to officials who have done a lot of work on this and I was very impressed when we had them in to the Social Services Committee by the breadth and depth of their knowledge on this particular issue. When we had some thoughts from them rebutting some of the evidence given in the select committee it was pretty clear that the solution that was chosen was the one that is most appropriate and delivers the best solution given what is the aim of that—that is not to take it right up to the wages that people are earning because actually that is not the right incentive that we should be sending. I support that and I think that is brave and that is leadership but that is exactly what people elect Governments to do—to lead and make tough decisions. I commend the Minister for taking that stand and for going to such a wide net and then pulling it back into what is actually going to give an elegant solution to raising benefits. First time in 43 years—I think that deserves a round of applause almost but I am sure we will not get it from members on the other side of the Chamber.I also am quite interested that the Greens were quite adamant about how these things keep missing out and how they were not quite enough. All of these submitters who came in seeking more increases and greater solutions in that area—that is their job to do that to advocate for as much as they can get and to go past what is actually needed to try to get more. That is their job. I am very happy to commend this bill to the Committee. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North): I must respond to the previous contributor Stuart Smith who said something like Labour had 9 long years to do something about child poverty. Well Working for Families raised over 100000 children out of child poverty. The leader of the National Party John Key—I think he was the finance spokesperson at the time—called it “communism by stealth” and National voted against it. And of course Labour’s policy at the last election would have raised over 50000 more children out of poverty—far more significant than any aspect of this legislation.But let us look at Part 3 in particular because Part 3 deals with the family tax credit and the thresholds. By any measure the increases that are available to people under Part 3 just do not touch the sides—4000 families. Four thousand families so—what are we talking—8000 or maybe 10000 children at the most will be entitled to an extra $12 a week and that is at a cost to the Government of $1.8 million annually? This is a Government that is spending $26 million on a flag referendum and that gave $30 million to a foreign corporate—The CHAIRPERSON (Lindsay Tisch): Come back.IAIN LEES-GALLOWAY: —and its response in Part 3 of this legislation is to spend $1.8 million annually? So it will take at least 13 years for this measure to get on to a par with a flag referendum?The CHAIRPERSON (Lindsay Tisch): Come back to Part 3.IAIN LEES-GALLOWAY: That is not an adequate response to child poverty. It is rich for a member on the Government benches to get up and say that they are doing more than other parties have done when we have been in Government when that party in Opposition railed against measures that had a far more significant impact on child poverty and poverty in general than this legislation does.The increase of $12.50 that a handful of families is going to be entitled to under Part 3 is essentially an inflation adjustment. It is something that probably ought to be just built into the system anyway. It is not an increase in real terms. It is helping a handful of families to catch up with some of the increases in the cost of living. As I say it certainly will not touch the sides. The difference that this will make is utterly negligible. If I was one of the National members I would be ashamed to get up and speak in favour of these changes in the way that they have done because in real terms the difference that people are going to experience is utterly negligible. At best you could say it is assisting families to catch up with the cost of living over the last few years.Of course any change in the right direction is worth supporting but let us be honest about what this really is. The minimum family tax credit is highlighted with these changes and of course one of the big problems with the minimum family tax credit is that there are points where it has a nearly 100 percent effective marginal tax rate.I have said this before about other legislation relating to these issues: I would have thought that National would want to do more about marginal tax rates especially for people on the lowest incomes and especially for people who are trying to transition from benefit into work or who are trying to make work a larger proportion of the income that they receive.National rails against effective marginal tax rates for rich people but when it comes to these people the people who are trying to scrape by on the very least and in particular families—people who are trying to raise children on the very least—this Government shows again utter inaction.The CHAIRPERSON (Lindsay Tisch): Members I would just like to mention that the sound issue seems to be resolved now.MATT DOOCEY (National—Waimakariri): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 75New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 46New Zealand Labour 32; Green Party 14.Motion agreed to.Part 3 agreed to.ScheduleThe question was put that the amendments set out on Supplementary Order Paper 132 in the name of the Hon Anne Tolley to the schedule be agreed to.Amendments agreed to.Schedule as amended agreed to.Clauses 1 and 2JACINDA ARDERN (Labour): I want to make a short contribution on this part of the Support for Children in Hardship Bill because clauses 1 and 2 have been controversial particularly clause 2 which is obviously the commencement date for this bill. For those who may only just be tuning in to this debate we are actually debating a policy that was announced at the last Budget—so some months ago now—and we are debating a commencement date for this piece of legislation that means that this benefit increase will not kick in for those who are in the most significant hardship until April 2016. Obviously the point of contention for members on this side of the Chamber has been that yes we support an increase in benefit rates for those in hardship—absolutely. Our argument has been around the adequacy and perhaps the way that that increase has been designed. But what was not in question for us was that the need was immediate—the need was immediate. In fact it has been in place for some time now.Again—I have to come back to this because it has been raised continually in this House—it has been lauded as the first benefit increase in 40 years but that is not correct. Working for Families increased benefit rates when it was introduced under the last Labour Government—Jono Naylor: Your deputy leader agreed with us.JACINDA ARDERN: —via the family tax credit. What was that Jono Naylor?Jono Naylor: Your deputy leader agreed with us in her speech on Part 2.JACINDA ARDERN: But am I getting a concession from the Government yet that benefit rates were increased? Because the one thing that I will add as a caveat to that is that we always said—and this was said first by Annette King when she was the spokesperson in this area—that we had unfinished business. No one on this side of the Chamber is claiming that Working for Families was the beginning and the end of everything that we had to say on poverty and inequality issues in this country. It was not but it was a damn good start and it was a necessary start and a concession that it was a necessary start is the fact that the Government has not repealed it. In fact it continues to play with elements of it in this bill.Our contention has been when it comes to clause 2 that we needed it right away. We needed it absolutely right away. In fact as we have always argued in debating this bill if you were really genuinely looking at hardship then you would look at some of the real catalysts for that hardship. Since Working for Families was implemented one of the massive contributing factors to that growth in hardship—if you look at the income measures around median income and the before and after-housing costs it tells you exactly what some of the problem is. Some of that problem is the after housing costs because of course in our most populated city in the country and in the South Island in Christchurch we have had a significant increase in housing costs. That has taken a disproportionate amount of income out of those low-income families trying to put a roof over their heads which has exacerbated the issue of income inadequacy. So that is a contributing factor.The reason I raise that is that Working for Families obviously was dealing with income inadequacy across the board but that has been exacerbated by an increase in housing costs and that is now a new challenge that we need to continue to address. So these things are never static; they are dynamic and we need to keep addressing them. What is not dynamic is simply the fact that the need exists and we need to do something about it with immediate attention. That is why we have a problem with this commencement date. It should not have been delayed. As has been raised in the debate as well the idea that the Consumers Price Index adjustment will kick in first then the base increase and the base increase of $25 will not be Consumers Price Index - adjusted—well that seems unfair. We are waiting a year for it to be introduced. Why not Consumers Price Index adjust it at the same time?Speaking briefly then to the title clause this is the Support for Children in Hardship Bill. What undermines the notion of support for children is that actually income is one thing; parental support is another. Fundamental to a child’s well-being and their success in life is the support from and the attachment they have to their caregivers. We are increasingly becoming aware of the impact and the importance of that relationship between a child and their caregiver. It is known as attachment; it is also known as attachment disorder when it is a poor relationship. The flow-on effects of a poor relationship in that regard are costly to us as taxpayers. It may seem like it is just a relational issue but actually when it comes to things like conduct disorder and behavioural issues which we as taxpayers end up putting money into from a remedial perspective we all end up paying for a poor bond between a child and a caregiver. I use the word “caregiver” loosely because we do know that it is not specific as to who that individual needs to be. It just needs to be a trusting relationship and a consistent relationship between a child at a very young age and an adult. In fact I think it was David Fergusson who estimated that the costs of a poor attachment and potentially later on conduct disorder generally can be up to a million dollars per child so it pays to invest early.That idea of support is not just monetary; it is about that physical connection with and presence of a caregiver. What this bill does is it gives with the one hand on the income side and it takes away with the other in the sense that we are now putting in a requirement for that potentially single caregiver to be in work when that child is at a younger age. What we do not seem to factor in is the detriment and the undoing of any positive effect we might have with that income boost caused by the negative impact of that change in threshold.The use of the word “support” does need to be taken more broadly. As a Labour Party we have always talked about income inadequacy as one issue when it comes to the deprivation that children in poverty experience across the board. But it is not just about money—it never has been—it is about the wider support network that sits around that family and that child. Again we would have liked there to be more analysis of the evidence that tells us where that support is most needed because we also know as I mentioned in one of my contributions around where that persistence in severe poverty exists that it is predominantly in sole parent households. So if you are looking for support for children in hardship as a bill actually the support also needs to go specifically to those single-parent households. We know in those cases that obviously care arrangements are difficult. They are more restricted. You cannot simply just take in those extra 20 hours of work without thinking about your care arrangements. Again this is supporting with one hand with the increase of the 25 bucks but taking away on the other by increasing those hours of work and potentially again restricting what that caregiver is able to manage in terms of their relationship with that child.So I think the title is disingenuous. It is singular in the sense that it is simply about income and not about that broader support network.We would also highlight again I think—because as I have said it is not just about income from our perspective when we are talking about those families in most need. We make an assumption in our society that a family particularly maybe a sole parent who is raising a child has a support network. That is not a given. It is no longer the case in New Zealand that you have that village that community or even necessarily that whānau around you but this bill is based on that premise. It assumes someone else can pick up caregiver roles when that individual is unable to do it because of work obligations.All of the policies we have always looked at around income inadequacy and poverty and deprivation have also included what we can do to improve that support mechanism—what role Well Child / Tāmariki Ora can play what role Plunket can play and what role can those networks play universally by being in the home providing that contact with the family to other support agencies to bring in the village that used to exist in raising children but has ebbed away. That is what true support looks like and if we were genuinely considering a bill that was true to the name true to the title of “Support for Children in Hardship” there would be elements of support that went beyond a single child and that would look to the network that exists around that child’s family as well.STUART NASH (Labour—Napier): Thank you—Hon Member: Is that it?STUART NASH: No no. The interesting thing about this bill and a number that are before the House—and there will be a bill before the Committee after this one on tax—is that it seems to me that a lot of tax legislation i.e. giving the ability to the Government to usually take money off Kiwis is retrospective.Sitting suspended from 6 p.m. to 7.30 p.m.The CHAIRPERSON (Hon Chester Borrows): Kia ora mai tātou. Tēnā tātou katoa. Members we are debating the Support for Children in Hardship Bill. When we adjourned for the dinner break Stuart Nash had 4 minutes and 45 seconds remaining. He was obviously cut short prior to dinner. He is welcome to resume his call.STUART NASH: I think I will resume that call. I was sort of cut off in mid-flow 15 seconds into my speech. What I was talking about is that the commencement date of the bill called the Support for Children in Hardship Bill is April 2016 and after this bill we are about to go to a tax bill as we have done quite recently in this House and there are a number of clauses in that tax legislation that are retrospective. It seems a little odd that when we have bills that take money off people or change tax laws which are quite fundamental to our economy often they are retrospective but when we are giving money back to people and often the most disadvantaged for some reason there is a big lag before this comes in.What this bill does is actually give $25 a week to some families come April 2016. That is not to be sneezed at—$25. It will make a big difference to some families but the interesting thing about this is that it is not indexed to how many children a family has. So if a family has one child they will get $25 a week. If a family has six children that family will also get $25 a week. That does not seem very equitable to me. I am unsure whether that is an unintended consequence. I am unsure whether it is a cruel joke or what the intent behind that is because if it is an unintended consequence I expect us to be back in this House with another remedial bill within 6 months remedying that—well I hope we are.We are talking about children in hardship. Let us put some context to this. There are 305000 children living in poverty at the moment. I think we can transpose the word “poverty” for “hardship” because it is pretty much the same. But the interesting thing about this is 60 percent of these are beneficiary families but 40 percent of these children come from families whose parents work. This is a new category called the working poor.We had a very interesting meal last Friday when we gathered a whole lot of old or former not old—[Interruption]—yes some of them were Labour MPs to celebrate the 80th anniversary of the election of the first Labour Government. It was interesting because on the placemats we had a Speech from the Throne from Michael Joseph Savage. What he said was that the Labour Government believes that every man—he did say “man” but I am sure he meant “man and woman”—earns enough money to support a family. That principle is universal and yet here we are literally 80 years later still fighting for the right for people to earn enough money to support a family.The fact that we have not progressed in 80 years to me is a real shame. In fact you could argue that by the end of that Labour Government men and women were earning enough money to support a family. I think that was one of the major legacies of that first Labour Government. But now here we are back in the House arguing for the fact that people need to be able to earn enough money to ensure that their children have every opportunity to reach their full potential. Every now and again what we hear from people is: “Oh these people they earn too much money. They get too much money back from the Government.” The interesting thing about that is that very very rarely is that criticism heard from someone who has to live on these tax credits.Parliament has deemed that people have to receive a certain amount of money to be able to live with dignity if they have children. It was passed and it is accepted but we would argue that at this point in time it is simply not enough money. An increase of $25 a week really does not go far at all especially if you have more than one child. In fact if you have a lot of children it does not go anywhere to be honest. But the interesting thing for me is—and we heard this from some people on the Government benches—sure this should be enough to support a family but what it has also got to be is enough to ensure that families can escape that poverty trap.People in New Zealand need enough money to ensure that their children have every opportunity to be as good as they possibly can be. The travesty of what is happening at the moment is that a lot of our children are not actually afforded that opportunity. The thing that I would argue is that we need to do more to change to get society back to the conditions and to the principles espoused by that Savage Labour Government in that first Speech from the Throne. It was a fantastic speech.CARMEL SEPULONI (Labour—Kelston):I just want to discuss the commencement date of this bill and point out that actually the decision to fund this package was made on 21 May 2015—Budget day. That is when the announcement was made. I guess our concern is that the commencement of this bill will not actually be until 1 April 2016. What we are all aware of in the House is that with 305000 children living in poverty there was a very real immediate need to address that poverty. With 60 percent of the 305000 children living in poverty being from beneficiary homes the Government had a very real opportunity to move this through quickly and to make a very small difference but none the less a difference in the lives of those children.We are disappointed with the commencement date. We are particularly disappointed with the commencement date given that through urgency just a couple of weeks ago we had the Government pushing through the Social Security (Commencement of Benefits) Amendment Bill which saw a number of people deprived of the opportunity to make claims after they were underpaid because of some technical error over the last 17 years. It is disappointing that the Government uses urgency in those situations but here we have a very real need—we have 305000 children living in poverty with 181000 of them living in beneficiary homes—and yet the Government did not see it as necessary to try to push this through any faster.So now we wait until 1 April 2016 and it is an unnecessary delay because you would not have any opposition from any party in this House if you decided to move the commencement date of this bill forward. That is a concern that I wanted to express. In fact I want to know from the Minister whether the Minister would consider actually amending the commencement date to bring it forward earlier so that these families may have a little bit more money in their pockets particularly around the Christmas period and in January and February when the kids go back to school. Would the Minister consider shifting the commencement date of this bill?The title of this bill is the Support for Children in Hardship Bill. I am just going to put it out there right now and say that given that it does very little to address the needs of the 305000 children living in poverty perhaps a better title for this bill would have been the “Supporting a Few Children in Hardship Bill”. I say that because the Government decided that it wanted to spend $250 million per year on a package that would make it appear as if it was addressing the issue of child poverty but it picked a measurement of material hardship that really suited its half-baked approach. We see that the Government’s selected measure which would give it a figure of between 60000 and 100000 families—not the household income measure that has been frequently reported in the past the latest of which shows the number of children in poverty has increased to 305000—meant that it was choosing the lowest possible figure in terms of estimates around children in poverty which has also meant that it will be assisting at the very most only 18000 families with children. That is a smidgen of the 305000 that we know of.I want to say that it was really disappointing actually to hear National MPs like the chair of the Social Services Committee Alfred Ngaro use that 100000 figure when he was referring to children living in poverty because I am sure that member like so many other members in the House knows that that is a major understatement and he is doing a disservice to those children and those families who are living in poverty.How much extra do those 18000 families get? Well actually they get $23.10 per family a week. I want to just refer back to what my colleague Stuart Nash was saying—and this is why I think it should be the “Support For a Few Children in Hardship Bill” which was that actually that amount of money is per family. It is not per child in those families so it does disadvantage those families with more children. It does mean that that small amount of money is going to have to be stretched across these families and it makes it much more difficult for them to get any benefit out of it.I want to refer back to the title—the “Support For a Few Children in Hardship Bill”—and I also want to maybe relabel this bill and what else can I call it? Actually no I am going to call it the “Lack of Support For the Parents of These Children in Hardship Bill” because there are measures that this Government has put through that we do not support in this bill. We are forced to support this bill because these families are so hard up that the $25 even though it is only a little bit is going to be something that will go into their pockets.But what we are concerned about in terms of the “Lack of Support For the Parents of These Children in Hardship Bill” is that we see a Government that is pushing through legislation that has no evidence base. We have the age where work obligations kick in going from 5 years to 3 years despite the fact that there is no evidence to support that doing that will see these families better off. In fact when I put parliamentary questions through to the Ministry of Social Development to ask it what evidence it had collected to support the measures in this bill it has said over the last 2 years nothing—no evidence whatsoever. And when we started to look for evidence to see what happens when you impose these types of work obligations on families what we found is that families can actually be worse off. Families can actually be worse off because what you end up doing is pushing parents out into the lowest-paid jobs and they can be worse off working than they actually were on a benefit. That is in no way supporting the children in hardship whom this Government says it is supporting.We have major reservations about extending the work obligations from 15 hours to 20 hours. And our reason for that is currently we know that the parents of these children have access to 20 hours of free early childhood education but there is also travel time that needs to be taken into consideration. The Government would have us believe that parents could access a childcare subsidy on top of that that would help with the additional hours that would be travel time in terms of the picking up and dropping off of their children but we have seen evidence this year that shows that once they are off benefit parents are less likely to access the child subsidy that they may be entitled to access. In fact I have seen letters to parents where they have been told: “No you’re not eligible for childcare subsidy because you’re able to access 20 hours free.” It makes absolutely no sense but I have seen it in black and white. So we have got concerns for the parents of these children living in hardship because they are actually going to be stretched more and it may impact on their ability to be able to look after their children.As I said before in renaming it the “Lack of Support For the Parents and Caregivers of These Children Living in Hardship Bill” I just want to point out that the National Government voted against a Supplementary Order Paper that I put up that would have put study alongside work obligations so that these parents would be supported to go into part-time study or to take up part-time work. And the reason that makes sense to us—and I am sure it makes sense to the general public as well—is that actually we do not just want to be pushing out the parents or caregivers of these children living in hardship into minimum wage jobs. Where we can we want to be providing them with the opportunity to upskill train potentially increase their earning capacity and potentially increase their options in terms of getting into more secure work when they go out into the workforce. But unfortunately National—so short-sighted—has not supported that Supplementary Order Paper.In fact in the Social Services Committee we had National members of the select committee saying: “Well they can get a student allowance.” They can only get a student allowance if they are studying full time and that is 32 hours or more. So there is no opportunity here now for these parents to be able to access part-time study—let us say 20 hours to 31 hours. In some instances that is all that would be practical perhaps because of the needs of their children or perhaps because of the number of their children. But it would have made sense for the National Government to support that provision and as I said it just goes to show that in many ways this bill should be named the “Lack of Support For the Parents and Caregivers of These Children Living in Hardship Bill”.We are supporting this bill because of the $25 increase but we have major reservations that might cause us to rename this bill.CHRIS HIPKINS (Labour—Rimutaka): I am very happy to take a brief call on the Support for Children in Hardship Bill when we are talking about the title and commencement clauses of this legislation. I have to say that I am a big fan of the non-political naming of bills in New Zealand. It has been a tradition in the New Zealand Parliament that the way we name bills is that we use factual descriptions for bills in Parliament not political sloganeering. I think one of the best examples of where you see political sloganeering in the way bills are created is obviously the United States Congress where you get bills like the No Child Left Behind Bill which became the No Child Left Behind Act which does not actually tell you very much about what the bill does.The point that I want to make is that the Support for Children in Hardship Bill basically creates an expectation around what the legislation is actually going to do that does not necessarily match up with what the legislation actually does. That is one of the reasons why I think the bill is misnamed. In fact we should just go back to the Kiwi tradition the New Zealand parliamentary tradition of naming bills after what they actually do. So in this case it is primarily a bill to amend the Social Security Act. Previously this would have been called the “Social Security Act 1964 Amendment Bill”. That would be what Parliament would have called it. The naming of it as something else actually politicises the title of the bill and therefore creates expectations around it. So it is a marketing ploy rather than a good legislative ploy.Therefore the House then brings itself to the question of: well does the substance of the bill match up to the marketing that we are getting within the title? If we look at it and we say “OK the bill talks about support for children in hardship.” one would think that applies to all children in hardship. The estimates suggest that this might apply to 18000 families with children and yet there could be up to 305000 children living in hardship in New Zealand depending on whose measure you are willing to accept. Therefore the bill fails at its first hurdle in the sense that I do not believe that it is appropriately named.But I actually have a technical issue that I want to get some clarity from the Minister on and that is to do with the commencement. If we look at clause 2(1) of the bill where we are talking about when Part 1 comes into effect it comes into effect on 1 April 2016 if an Order in Council is made under section 61HA(2) of the Social Security Act. Incidentally section 61HA(2) of the Social Security Act is actually being inserted by this very bill and that is the point that I am about to come to. If an Order in Council is made under that section then the Act comes into force on the same date but Part 1 comes into force immediately before that order.The reason that is interesting is that it suggests that the Government can make an Order in Council to come into force before this bill has actually come into force as a piece of law. That to me seems to be quite an interesting legislative instrument. I suspect that the reason that the Government is doing this is so it can determine what it wants the Order in Council to be on 1 April when the legislation comes into force and it is just trying to avoid any sort of legal irregularities around the fact that the Order in Council was made immediately prior to the Act—as it will then be—actually coming into force.It seems to me to be a slightly interesting legislative instrument. It is the first time that I have seen something like that which basically gives the Government the ability to make an Order in Council under an Act that has not yet come into force. I just wanted to check with the Minister in the chair Nathan Guy that in fact the intention in doing this is to ensure that basically the Order in Council can be prepared prior to the Act coming into force. But it is just to avoid the technicality I guess of the Act and the Order in Council coming into force at the same time and there potentially being some sort of circular legal argument that somehow invalidates the situation.The rest of the commencement clause basically is relatively straightforward. It comes into force either on the day after on which it receives the Royal assent—i.e. when it is signed by the Governor-General—or on 1 April 2016 which is not unusual when it comes to Social Security Act amendments because they tend to be for the full year. Having said that I think that some very legitimate arguments have been raised for why we always treat the expenditure side of the equation as coming into force some way down the track but often when it comes to the other end of the equation and the revenue generation side of things the Government seems to be a lot harsher. We dealt with some issues just recently in fact where there was legislation that was backdated and I think that is generally a bad principle.Overall I think the bill is worth supporting because the clauses we are supporting—support for children in hardship is something that the Parliament should take seriously. I am disappointed in the sense that I do not believe that the bill lives up to the promise in the title. I do not believe it supports enough of the children in hardship. I think it overlooks many of the impacts. Again let us come back to the title—“Children in Hardship Bill”. Actually why do children live in hardship? It is not because the children do not earn enough money. It is actually because the parents do not earn enough money to support them which is another reason why I think—and in fact the bill deals largely with parental income issues and I do not know that the title of the bill adequately reflects what this bill actually does.If we want to get really serious about dealing with children in hardship we do have to look very seriously at the fact that 305000 New Zealand children—if you accept the most commonly accepted definition of poverty—are living below the poverty line in New Zealand. That is a major major embarrassment to a country like New Zealand and we should certainly be doing a lot more about that. We need to look at early childhood education and the barriers to participation in early childhood education and the link between workforce participation and early childhood education. I do not think that those are sufficiently understood yet and I think we need to look much more closely at those. The bill is worth supporting. It has a lot of gaps in it. It is a start but it is certainly by no means a big step.POTO WILLIAMS (Labour—Christchurch East): Tēnā koe Mr Chair. I will start with the title of the Support for Children in Hardship Bill. Like other colleagues I want to refer to the word “hardship” within the bill because over the course of the debate that has become interchanged with “poverty” “deprivation” and other words that indicate that our children are actually suffering. However what has failed to occur in all of the debate is actually some measure of that or some definition around what hardship might actually look like.It would appear that hardship occurs to only the 18000 or so children who are going to be impacted on by this particular bill. That of course is not the case when we consider the 300000-odd children who are living in poverty which no one in any part of the Chamberis disputing. Calling the bill “Support for Children in Hardship” does cause us to consider whether we should define hardship. Should it become a measure that we then make some advance to ensure that we can reduce those targets because when you are talking about hardship or poverty or deprivation you cannot ignore the other things that surround the difficult lives that these children have.Perhaps in the title we should be looking at developing words that encourage a suite of responses to these children such as adequate warm dry affordable housing and such as access to decent education with all the resources that level out the playing field for all of our children so that they have equal opportunity—so I do have a problem with the word “Hardship” within the title of the bill.I also have a problem with the word “Children” because as we know the bill is really more around the household income as opposed to supporting individual children. We know that the bill will support a family—increasing benefit rates up to $25 a week—but not necessarily the individual children within that family. Your family might have four or five children but be able to access only the $25 a week. The fact that the children are part of the title I have an issue with.I also have a problem with the fact that we have been led to believe that these families will get an extra $25 a week when we know that it could be anywhere in the region of $17 or $12 or $23 depending on the situation that your family finds itself in. The Government has been trumpeting the fact that it is providing more money to the family which is great and we support that. However the view that has been widely trumpeted that it will be $25 a week for all families is clearly not the case.I have a real problem with the commencement date. If we are desperate to ensure that our families are well resourced should the commencement date not be the day after which this bill will receive Royal assent and not 1 April 2016? It would bring to a whole lot more families some support when they need it not having to wait for a further 4 or 5 months for that to happen.We could call this bill the “Complex Tax Changes (When They Should Have Just Passed Labour’s Bill to Increase Abatement Rates)Bill” because there are some complicated changes to the inland revenue Acts that will change abatement rates when if the Government was really serious about supporting children in hardship it would have supported Labour’s bill which might have put an extra $50 into the pockets of our families.This bill should also be called the “Changes to the Definition of Part-time Work (And All That That Might Entail)Bill”. Of course we know that the definition is moving from 15 hours a week to 20 hours a week. We are talking about families probably mostly women who will be required to go back to work who will be work tested. They are likely to go into roles that are at minimum wage or just above and are probably quite precarious in terms of being under the 90-day legislation. It will be probably fairly casualised employment.I have an issue with us wanting to have long-term sustainable support for children in hardship when we have not really done the groundwork to ensure that the workplaces the types of work and the payment for that work are going to be sustainable for those families in the longterm because they will be in a position of less power being potentially new back to the workforce low skilled and going into low-paid jobs.I also have concerns about what happens to the children. All those families when they are required to be work tested and get back into the workforce when we are in situations where adequate good quality and affordable day care is not available to some of those families—it could be that we are talking about families in rural settings.I also have a major concern when we are talking about the types of roles that might require shift work or working outside the normal hours when decent and affordable childcare might be available.So really in summary there are some major concerns about the naming of this particular bill. Does it really support children in hardship? How do we define hardship? Is it about the children or is it about the income that comes into the family? Is it more about the definition of “part-time work” and what the nature of that work might be or is it really about providing opportunities for families and parents and children to better themselves? I think not but thank you for the opportunity to make this contribution.SUE MORONEY (Labour): It is great to have an opportunity to rise and speak about the title and commencement clauses of the Support for Children in Hardship Bill. I do intend to talk mostly about the title. I hope to get an opportunity to also talk about the commencement date but we will see how we go because I have got quite a bit to say about the title.I want to say what I really do not like about the title of this bill the Support for Children in Hardship Bill. It is far too accepting in my view that in a country like New Zealand we will have children who live in hardship and that all we really need to do is just support them. I do not like that concept at all and neither does the Labour Party because the Labour Party has zero tolerance for child poverty—and that is the sort of ambition that you would want from a Government. You would want a Government to say it is not acceptable that children live in hardship or in poverty rather than to actually give a bill a title that is very accepting of the very idea that in Aotearoa New Zealand the sort of country where we produce food where the living standards were once very good right across the board—today the Government has to name a specific piece of legislation the Support for Children in Hardship Bill.This bill will become the Support for Children in Hardship Act. It will be on our books for a very long time in terms of our legislature. I feel offended by that as a New Zealander. If that Government still had the ambition it once said it had for New Zealand it would never think of giving a bill this sort of title—a bill that accepts that in this country children will live in hardship and that the Government’s only real role in that is to fling them a bit of support.What is that bit of support the Government is flinging them under this bill? It turns out to be about $17 or maybe $23.10 at the outmost per family. We have already heard a number of speakers talk about how the Government has kind of gone into poverty denial on this. Even though we know there are now 305000 children in this food-producing nation of ours who are living in poverty the Government lacks ambition so much in this area that it has decided that it will try to address only 18000 of the most worst-off families.The reason I raise this is that if the Government really understands poverty and knows the depth of this poverty it surely knows that adding $17 a week or maybe $23.10 per week for each of these families at the most is not going to fundamentally change the problem for those children. In fact statistically not one of those children will be lifted out of poverty with this addition—not one of those children. These families living in—as the Government calls it in the title of this bill—hardship are living at the most extreme end of hardship in this country. It is completely unacceptable and it should not be recognised in the name of a bill.If this Government was truly ambitious for New Zealand and wanted to address this issue then it would be addressing the fundamental causes of poverty. It would be addressing the lack of wealth distribution we have in this country now under this Government. It would be addressing the fact that two out of five of these children live in homes where their parents are in paid employment—paid employment—and that that paid employment has such appalling conditions and wages going alongside it that those children live in poverty even though their parents are out earning wages.These are the families on the zero-hour contracts that the Government wants to codify in law. These are the families that have been forced to choose—well not choose. They have been told they cannot get the benefit after their child turns a certain age 3 years of age and that they must take whatever work is offered to them. That is putting these children in hardship as this bill names it. If the Government was ambitious it would have had a better title for this bill.At the outset I indicated that I wanted to address the commencement clause but I did warn that I had rather a lot to say about the title. I will now move on and briefly address the commencement clause of this bill. Again it shows a Government that lacks ambition. It shows a Government that lacks urgency over this issue. It announced in its Budget this year—in May this year many months ago—that it was going to bring this measure in. That measure should have been taken urgently. There should not be a wait until 1 April 2016 before any family can get any benefit from it. If the Government truly understood the depth of the urgency of the need of these families it would have acted an awful lot earlier.We are about to move into the most expensive period of the year for families. We are moving into the Christmas festive season. For many families this is the most expensive time of year. Yet here we are on 1 December and this Government could have moved much more urgently to address this issue and given these families a little bit to come and go on over the so-called festive season—it will not be terribly festive for these families I can tell you. If the Government was truly committed to the urgency of this then we would be talking about 1 December—today’s date—for introducing this additional payment.We have got Christmas coming up. We have got the holiday season coming up. We have got the school year about to start next year with the cost of uniforms the cost of school fees and the cost of stationery. All of those things impact upon families and make it extremely difficult for these so-called children in hardship to participate fully in their education.I am going to wrap up my contribution there. I think it is extremely disappointing that the Government lacks so much ambition for New Zealand that it accepts that there will be children in hardship in Aotearoa and accepts that doing anything about it is not terribly urgent.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.JAN LOGIE (Green): I am pleased to take a short call on the title and the commencement of this bill the Support for Children in Hardship Bill. I would like to reinforce initially before going on to make other points the point made by the Labour Party’s Sue Moroney about how sad it is to see the concept and the acceptance of so many of our children living in hardship being put on to the statute book.That is not the Green Party’s vision for New Zealand. Our vision is for a country where all of our children are able to thrive and that does not include living in hardship. We know that when a child is living in hardship and is living in poverty their lifetime opportunities are being taken away from them. Childhood poverty impacts on your ability to learn on your health and on your ability to succeed in life for the rest of your life. To accept that and to put it on to our statute book is a sad thing and it is a sad day to be doing that.I would like to also focus on the fact that this bill is suggesting that there is support for children. Just coming back to some of the submissions that were made on this bill I note Unicef’s contribution. Unicef noted that it felt that we have been so focused on work that we have lost sight of children. To me that speaks a truth that is quite reflected in this bill. The bill might be better named the “Support for Parents Into Further Work Bill” because that does seem to be the main thrust of this bill. It is again removing parents’ choice in the way to parent and is putting more people into the job market even though we have still very entrenched and I think unacceptably high levels of unemployment. Over 100000 people who are in part-time employment are still looking for more hours. This is just flooding the market with another group of people when we know we do not have enough jobs to go around. So the bill would seem even to be better named the “Stick of Ideology Bill”.I note also in the Unicef submission where it talked about the fact that children say that they want their parents around and that they want them to stop being angry and that children in this country are really affected by the stress that their parents are experiencing—and these are parents in work and parents out of work. If we were focused on children and supporting children then actually we would be looking right across the policy levers to improve that situation.I was at the launch of the living wage in Porirua recently when there was a young man who got up and spoke. He talked about running away from home at the age of 6 to go down to the local shops to ask for a job because he was so upset and feeling so bad for his parents who were working so hard and were struggling so much and were so stressed that he just wanted to be able to help them out. That is unnecessary and unacceptable. To quote the words of the great Russel Norman Governments cannot mend a broken heart but they can put food in a kid’s belly and they should.If we were looking at supporting our children in this country that is what we would be focusing on. We would be focusing on making sure that all of our children had enough food and that they all had a stable roof over their head—something that is increasingly unlikely for so many of these children. We would make sure that they were able to attend sports activities and cultural groups that they could get to different places to visit different people and experience different things that they would have warm enough clothing in winter that when it is raining they would have shoes on their feet and raincoats—things that when I grew up in Invercargill in a family with lots of friends who were working-class families were just completely taken for granted.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.Clause 1 agreed to.The question was put that the amendment set out on Supplementary Order Paper 132 in the name of the Hon Anne Tolley to clause 2 be agreed to.Amendment agreed to.Clause 2 as amended agreed to.The Committee divided the bill into the Social Security Amendment Bill the Education Amendment Bill and the Taxation (Support for Children in Hardship) Bill pursuant to Supplementary Order Paper134.Bill to be reported with amendment presently.