Extract from a speech by Peter Dunne. The full speech can be read at:

www.taxpolicy.ird.govt.nz/index.php?view=706

This is our opportunity gentlemen. Tell them what we think. He expects a “Great many” submissions. Lets not dissappoint him.

Child support

Within a few weeks I hope to be able to release a discussion document setting out proposed changes to aspects of the government’s child support scheme.

About one in five of the letters I receive as Minister of Revenue are from people who are unhappy about some aspect of the scheme.

The question of when the discussion document is coming out is frequently asked by correspondents, many of whom seem eager to have their say on what they see as the shortcomings of the present scheme.

It should be pointed out, however, that by its very nature, an externally imposed child support scheme will be less flexible than good private arrangements between parents.

Fortunately for them and their children, many separated parents are able to make private, relatively amicable child support arrangements.

The state scheme is there as a back-up for those parents who are on a benefit or who are unable to make satisfactory private arrangements.

Although there is always room for improvement, a state-provided child support scheme cannot satisfy all participants all the time.

A lot has changed – in patterns of raising children, in workforce participation, and in family law – since the scheme was introduced, in 1992.

It is now timely, therefore, to look at updating it in some key areas.

The discussion document will seek people’s view on proposals to update the child support formula that determines how much child support a parent must pay.

The proposed changes will take into consideration levels of shared care, the costs of raising children today, and the income of both parents, leading to a revised formula that takes better account of modern parenting arrangements.

I expect to receive a great many submissions on the matters under discussion, and the Government will have to weigh up the pros and cons of any changes of this nature before deciding on the next steps.

People who do not wish to write a formal submission on the proposals set out in the discussion document will be able take part in an online consultation if they wish to do so.

If all goes well, it may be possible to legislate for resulting changes to the scheme sometime next year.

Income splitting

Income splitting, or allowing families with children to split their incomes for tax purposes, thereby reducing their overall tax liability, also remains an area of great interest to me.

Indeed, the post-election Confidence and Supply Agreement between my party, United Future, and National includes support to the first reading in Parliament for a bill giving effect to our income splitting policy.

The idea was first floated in a discussion document published in April last year, to which there was a good response.

That initial consultation is to be followed up by an officials’ issues paper, planned for release by the end of this year, seeking submissions on the detailed design of the proposal.