Stanford EricaCHILD SUPPORT AMENDMENT BILLFirst ReadingDebate resumed from 19 March.SPEAKER: When we were last debating this the Hon James Shaw had the call and he had eight minutes remaining if he or a member of his party really wanted to continue. The question is that the—Erica Stanford: Mr Speaker.SPEAKER: Oh Erica Stanford—sorry. The member needs to be loud from the corner.ERICA STANFORD (National—East Coast Bays): I'm up the back I'm sorry. Thank you Mr Speaker. I'm pleased to make a contribution tonight on the first reading of the Child Support Amendment Bill. At present there are 185000 children who are supported through the child support scheme which has a relatively high level of compliance for payments. But it is important that we continue to make improvements to the legislation as we have done over the last couple of decades to make it more equitable more flexible more streamlined and not overly punitive.The previous National Government released a discussion document in 2017 which laid out a number of problems with the child support scheme that required legislative change. That discussion document however wasn't about changing fundamental policy settings of the Child Support Act. Instead it was about improving the administration of the scheme and it suggested improvements that were possible because of a new technology platform that the IRD were moving to and indeed have now moved to.A child support system that is seen as fair will be a system that has a much higher degree of compliance. This is of course important because the beneficiaries of this compliance are children. The more penalties that we load on the less flexible and less accommodating the system is the more the system is viewed as unfair and inequitable and the more ability that parents have to hide income to jimmy income around and to offset losses to lower their child support payments the more frustration is felt and ultimately the lower the level of compliance. This bill makes some very sensible administrative changes in line with that discussion document from the last Government that will increase compliance.One of those important changes in this bill is around the definition of income. As an electorate MP I have to say that I have seen a large number of child support cases in my time both as a staffer in the electorate office and also as an MP. One of the frustrations that people have when they come to me is that their partner has been not declaring all of their income or indeed hiding some of that income especially those who are self-employed—either paying themselves a minimal salary or offsetting losses and not declaring other income to reduce their child support liability. Currently it is possible for one parent's income to be lowered due to tax losses in a previous year which in turn reduces their child support liability.The Minister of Revenue made it really clear in his first contribution in this bill that that approach is not fair and this bill proposes that the system will no longer allow offsetting of losses to be able to offset income and lower child support payments. What this does in reality is stop those parents effectively gaming the system jimmying things around to avoid paying their fair share which is very important.In this bill the definition of income has been altered to include dividends and interest payments. Those weren't able to be previously accounted for because the amounts weren't available until the end of the financial year but now with this new technology platform that the IRD have they have better access to data and more up-to-date data allowing them to take into account income that is derived from interest and dividends. Part of this bill introduces the compulsory taking of the child support payments from parents who are newly enrolled in a child support scheme to be taken directly out of their salary which will increase compliance and get parents on the right track right from the very start which is a positive thing.Finally one of the important changes to the bill is around the time bar. Currently when we are reassessing a parent's income to calculate their rate of child support payment we look right back to the inception of the Child Support Act which is back to 1992 and clearly it's this huge waste of time and resources. It actually would be far better if we just took it back four years which is exactly what's being proposed in this bill.I did want to also talk about penalties. One of the things in the discussion document that the National Government released was that what they found was if you're overly punitive and inflexible when it comes to penalties it acts more as a deterrent to comply than an incentive to comply for many people. So with that in mind there are some changes to the application of late payment penalties. The first of those is currently if you miss a payment—if you're paying some child support and you miss a payment—there is a 2 percent penalty and then seven days later there's a further 8 percent. The recommendation in this bill is to push that second 8 percent penalty out to 28 days. What that allows IRD to do is to engage with parents to try and work out a solution to get them back on track and improve compliance and I think that is a good solution.The second part of the changes around penalties is around a 60-day grace period allowing a newly enrolled parent in the scheme 60 days grace without any penalties to start their payments. This is I believe a relatively good suggestion in that this is a really difficult time in many families' lives when they have gone through what is a very emotional time. It's difficult financially. It's very stressful. Giving them that 60-day grace period to come to terms with what they're dealing with and get payments under way is a good move in my opinion.This bill is the result of the good work of the previous National Government and is long overdue. There will be some things that we do need to iron out at select committee but for now I commend this bill to the House.Bill read a first time. Bill referred to the Social Services and Community Committee.