Child Poverty Action Group Incorporated v Attorney-General Hc Wn

• Jurisdiction: New Zealand
• Judge: Dobson J,J Grant,S Ineson
• Judgment Date: 25 October 2011
• Neutral Citation: [2011] NZHC 1228
• Docket Number: CIV-2009-404-273
• Court: High Court
• Date: 25 October 2011

[2011] NZHC 1228

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Court:

Dobson J

Ms J Grant MNZM (Lay Member)

Ms S Ineson QSM (Lay Member)

RESERVED JUDGMENT OF Dobson J, MS J GRANT AND MS S INESON

Contents

CIV-2009-404-273

BETWEEN

Child Poverty Action Group Incorporated

Appellant

and

Attorney-General

Respondent

Counsel:

F M Joychild and J M Ryan for appellant

C R Gwyn, J Foster and C I J Fleming for respondent

Introduction	[1]
The 31 March 2004 Cabinet Paper	[14]
2005 amendments	[26]
Terms of the legislative provisions under challenge	[33]
Relevant human rights provisions.	[43]
International treaties/covenant obligations.	[47]
The Tribunal's decision	[54]
What is required to constitute discrimination?	[56]
How to identify the comparator group	[85]
Does the different treatment constitute discrimination?	[104]
Section 5 – The issues on justification	[130]
Deference	[133]
What the limitation on the right is measured against	[147]
CPAG's criticisms of the IWTC and WFF package	[167]
Objectives sufficiently important to justify curtailment of the right?	[184]
Is there a rational connection between exclusion of beneficiaries and the identified objectives?	[194]
Is the exclusion of beneficiaries more than is reasonably necessary?	[201]
Proportionality	[212]
Conclusion	[225]

Introduction

1 This appeal relates to a claim pursued originally before the Human Rights Review Tribunal (the Tribunal), to the effect that a component of the Working for Families (WFF) package of tax credits discriminates against those who are on State benefits, and in particular against the children of those families. One objective of the WFF package was to alleviate child poverty and the claim is that the exclusion of those on Statebenefits from the caregivers who qualify for a component of the WFF package discriminates against the children of those in receipt of State benefits, to their material disadvantage.

2 Child poverty is recognised as a social ill with significant long-term adverse social and economic consequences. Fora so-called developed economy and in a society that aspires to be “caring” (which in the formal sense is manifested in our accession to various international covenants on human rights 1), New Zealand has a poor record on child poverty. One source of government statistics on child poverty, pleaded in the Second Amended Statement of Claim in December 2006, referred to a Ministry of Social Development report of that year. That report identified that, as at 2004, 38 per cent of dependent children's living standards had been characterised by low living standards which included some in severe or significant hardship categories. That report also included the statistic that families enduring low living standards included 51 per cent of families whose main source of income was an income-tested benefit, compared with 17 per cent of families whose main source of income was market income. 2 More recent data cited in evidence before the Tribunal suggests that the position has not significantly improved.

3 Accordingly, a claim that steps being taken on this important front involve prohibited discrimination is to be takenseriously. Indeed, this challenge has been pursued with the commitment of significant resources. The Tribunal heard 14 witnesses and argument in a hearinglasting 19 days. The record of the

proceedings before the Tribunal extended to 32 volumes in hard copy form. The Tribunal's decision contains 289 paragraphs in 105 pages.

4 The appellant, Child Poverty Action Group Incorporated (CPAG), is an incorporated society that was formed in 1994 toadvocate for better informed social policy to support New Zealand children, in particular those living in poverty. CPAG conducts research, publishes information and lobbies for changes to government policy. It works with other child-focused organisations and has, among its management committee, Dr Susan St John, an Associate Professor in the Economics Department of Auckland University and Professor Innes Asher, Head of Paediatrics at Auckland University School of Medicine. Both of them gave evidence before the Tribunal.

5 Since 2002, CPAG has pursued complaints that forms of State assistance to families with children that are not available to families where the parents are in receipt of benefits constitute prohibited discrimination. The present complaint was pursued in respect of measures introduced in the Income Tax Act 2004 and CPAG was granted legal representation by the Office of Human Rights Proceedings to pursue the case before the Tribunal. Those representation arrangements have continued for the appeal.

6 The Crown challenged the Tribunal decision that CPAG had standing as a “complainant” but its status asa complainant was upheld. 3 This Court subsequently found that the Crown had waived the time prescribed for bringing the appealwhen it was inadvertently filed eight days late. 4

7 As to the nature of the present appeal, the parties are agreed that the appellate approach settled by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar should apply. 5 This approach requires the Court to form its own view on the relevant issues, whilst having appropriate regard to the conclusions reached by the Tribunal. Although the Tribunal heard extensive evidence, itdoes not appear that

any material issues of credibility arose, and certainly statistical and opinion evidence is well able to be assessed by us without the benefit of seeing and hearing the witnesses.

8 As to the scope of the appeal, CPAG's pleaded challenge focused on the provisions in the Income Tax Act 2004 by which the WFF package was initially implemented. Before any of those measures came into effect, a relatively significant amendment to the package was introduced in 2005. At the hearing before the Tribunal, the parties joined issue on the effect of the package as introduced, including the 2005 amendments. However, the Tribunal decided that it was constrained by the terms of the pleading, and also by the lack of complete submissions on the WFF package in its amended form, from ruling on the WFF package in its amended form. 6

9 Three of CPAG's grounds of appeal challenged the decision of the Tribunal not to deal with the scheme as it had comeinto force. It is accepted for the Crown that the appeal ought to deal with the scheme as introduced, which includes consideration of the 2005 amendments to it.

10 In those circumstances, it is not necessary for us to decide whether it was in error for the Tribunal not to deal with the form of package including the 2005 amendments. It seems that nothing turns on whether CPAG can make out an error by the Tribunal in this regard for costs purposes, and nor is it likely to be applicable as any form of precedent for subsequent proceedings. It is sufficient that the appeal deal with the challenge to the scheme as it exists, given that the Court was certainly adequately informed on the existing scheme, and that there would be an artificiality in dealing with the arguments as they related to the WFF package in a form other than as it is operating.

11 CPAG's challenge before the Tribunal extended to a parallel provision that was ss KD to AAA(8)(a) of the Income Tax Act 2004, excluding from those eligible for a component of the WFF package, persons in receipt of compensation payable

under the Injury Prevention, Rehabilitation and Compensation Act 2001. That aspect of the challenge was not pursued on appeal.

12 The formal relief sought before the Tribunal was a declaration pursuant to s 92J of the Human Rights Act 1993 ( HRA) that the relevant provisions in the Income Tax Act 2004 “are inconsistent with the right to freedom from discrimination affirmed by s 19 of the New Zealand Bill of Rights Act 1990”.

13 We will first review the genesis of the WFF package, and relate that to the statutory provisions that provided for it. We will then briefly describe the outcome of the Tribunal's decision, before listing the sequence of legal considerations in respect of which we have to settle on the tests to be applied. That leads to an application of those tests to the factual circumstances as we find them to be.

The 31 March 2004 Cabinet Paper

14 The WFF package was introduced as a 2004 budget initiative. The major rationale for it was recorded in a 47 page Cabinet Paper dated 31 March 2004. It recorded that initiatives had begun in December 2002 7 when Cabinet had invited the Minister of Finance and Revenue and the Minister of Social Development and Employment to report on major reform of family income assistance (including child care assistance) and simplification of the benefit system. This work had expanded to include analysis of the accommodation supplement, third tier hardship provisions and the invalid benefit.

15 In its summary, the Cabinet Paper described the key objectives of the WFF package as follows: 8

• • make work pay by supporting families with dependent children, so that they are rewarded for their work effort. This involves better alignment of benefits and in-work support (including Family Income Assistance, Childcare Assistance and Accommodation Supplement) so that people are better off as a result of the work they do

• • ensure income adequacy, with a focus on low and middle income families with dependent children, to significantlyaddress issuesof poverty, especially child poverty. The package also addresses housing affordability problems by responding to the increased cost of private housing for low income people, and

• • achieve a social assistance system that supports people into work, by making sure that people get the assistancethey are entitled to, when they should, and with delivery that supports people into employment. This involves steps to...