Child-support dodgers foiled

By John Armstrong

political editor

The loophole enabling liable parents to dodge child-support payments by crossing the Tasman will be closed as part of a deal between Australia and New Zealand on welfare and closer economic relations.

Under the same agreement, New Zealand will pay Australia an extra $24 million this year to meet the cost of providing social security and dole payments to New Zealanders living there.

That brings the total reimbursement to about $154 million this year. It will rise by $18 million next year.

Unofficial estimates have put Australia's annual social-security bill for New Zealand-born residents as high as $700 million.

From next July, Australian authorities will collect child-support payments owed by New Zealanders living there.

Officials were unable to give exact figures yesterday, but estimated that "thousands" of parents were avoiding child-support obligations and that Inland Revenue was losing about $10 million a year.

The agreement is part of efforts to expand CER and will be reciprocal, with authorities here tracking and billing Australians who owe child support at home.

The fairness of reciprocal welfare payments has been a sore point in Canberra-Wellington relations for years because many more New Zealanders live in Australia than vice versa.

Prime Minister Jenny Shipley yesterday described the figures as a "satisfactory settlement," particularly given that Australia had the extreme option of cancelling reciprocal social-security arrangements.

"They were keen to get a good deal more than that."

The new regime flows from the work of a trantasman prime ministerial taskforce established after talks between Mrs Shipley and Australian leader John Howard in February to explore how CER might be advanced.

Apart from social-security issues, the joint communique issued in Wellington and Canberra yesterday also agreed to:

* Consider expanding CER to include free-trade arrangements with other "significant economies" or regional groups - providing they are willing to cut trade barriers faster than forums such as the World Trade Organisation.

Mrs Shipley said CER was now robust enough to expand, and some initial discussions with other countries were underway.

She refused to give details, but she and other ministers have previously mentioned the United States, Latin American countries and possibly Singapore.

* Liberalise transtasman investment rules and make it easier for New Zealanders to invest in Australian real estate.

* Cooperate in delineating continental shelves and exclusive economic zones to protect respective marine resources.

The possibility of monetary union was not discussed by the taskforce, with Mrs Shipley saying neither country was considering such a move "at this stage."