Woodhouse Michael: Urgent Debates Declined — Skycity Convention Centre—Inquiry into Expressions of Interest Process; Urgent Debates — Accident Compensation Corporation—Resignations 
Text is incorporated into the Bound Volume 
Woodhouse Michael: Urgent Debates Declined — Skycity Convention Centre—Inquiry into Expressions of Interest Process; Urgent Debates — Accident Compensation Corporation—Resignations 
[Sitting date: 13 June 2012. Volume:680;Page:2923. Text is incorporated into the Bound Volume.] 
MICHAEL WOODHOUSE (National) 
: 
 I will accept that this is not ACC’s finest hour and the disclosure of private information in any situation must be an extremely stressful experience for the 7000 people who were on that spreadsheet. But I will not accept criticism from that party over there under whose watch over 9 years ACC was led into financial and operational disarray. The member Mr Grant Robertson can talk about a manufactured crisis but I remind that member of the sorts of things that the Minister for ACC in December 2008 faced when the phone rang in Dr Smith’s office in December 2008 and on the other end of the line was the Chair of ACC Board Ross Wilson saying “I know we’ve just written this really good briefing to the incoming Minister but we forgot to mention the small matter of the fact that the non-earners account is basically insolvent and can we have a cheque please for $305654000?” which was just to sustain the non-earners account for the following 6 months. He wanted another $1.5 billion in cash to sustain it over the next 3 years. That led to the sacking of the chair and rightly so and it also led to an inquiry which found that the Minister of Finance Dr Michael Cullen deliberately excluded that information from the pre-election fiscal update in breach of the Public Finance Act. And do you know what he did? Do you know what Dr Cullen did? He blamed Treasury. He blamed the officials. He said it was not Labour’s fault—$305654000—and then said that he did not put it to Cabinet because it was not subject to sufficient detailed scrutiny. He had assessed it down to the last dollar and it still was not good enough for the Labour Government.  
Well I know what I think about that. I think there was a little bit of stuff being shoved under the carpet a little bit of “nothing to see here everything is fine at ACC”. But we know it was not. We know it was not because Maryan Street signed an agreement that presided over a $2.4 billion loss followed by a $4.8 billion loss. And do you know what Labour said? “Accounting sophistry”—accounting sophistry! We had Andrew Little—whatever he was in charge of the Service and Food Workers Union—saying it was a deliberate hatchet job. He accused the auditors the actuaries the Minister himself of generating a false crisis. I tell you what was not false—the levies. The levies went up by billions and here is why. There was a $7.2 billion deficit to recover and assets of $10 billion and liabilities of $24 billion. I am an accountant. I am a chartered accountant right so I kind of get this stuff. But it is really only simple maths. Listen up it is really important. Ten billion dollars $24 billion—what is the difference? It is called $14 billion and it is a serious crisis and it is real. The levy increases were real and the actions that Dr Smith took as the Minister for ACC— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. One of the traditions of this House is that when members leave especially when asked to by members of the Government the fact that they are leaving is not drawn to the attention of the House. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you. The member is absolutely right. I did not actually hear that someone was mentioning that the member was leaving but can I say to members on the Government side that everybody has to leave this Chamber at some time or another. It can be for any reason. I would urge members to abide by the Speakers’ rulings and Standing Orders that mention that no mention whatsoever must be made of members leaving the House.  
MICHAEL WOODHOUSE 
: What an excellent bit of interference I must say. Where was I? Fourteen billion dollars I think. It was the simple maths was it not? Ten billion dollars $24 billion—it is not that difficult. It might be an accounting number but it is pretty real. Let us just say this. If we were to shut down ACC tomorrow—and that will not happen—what would we need to do? The Government would need to write a cheque for $14 billion. The member should try going to his bank manager and saying “Look my business is in really good shape. I’ve got $10 in the bank but I owe $24 and everything is going to be fine.” You multiply that out by billions and it is a very serious problem.  
Here is why it occurred. It occurred because Labour had a come-one come-all approach to ACC. We warned Labour when it wanted to change medical misadventure to treatment injury and have all sorts of medical complications that that would be a Pandora’s box it should not open. It was costed by the Department of Labour at $8.7 million. I was the president of the Private Hospitals Association. I said that that number was a nonsense and so it proved to be because that change cost $87 million a new cost on the taxpayer. We warned Labour when it proposed to remove the co-payments from physiotherapy consultations that it would not cost anything like the $50 billion it was prepared to invest. It cost $250 billion. Let me tell you about elective surgery because an interesting thing was happening. Private medical insurers were making sure that claimants got a “no” letter from ACC before organisations like Southern Cross would approve private surgery. So I can tell you that applications to ACC were put in by surgeons that said “This is not an accident. Do not approve this claim. All we want is a letter.” and ACC would approve it. So let us just talk about a culture of disentitlement because what ACC is having to do under this administration is reverse the nonsense that took place over 9 years and that has cost the levy payers into that scheme and of this country billions and billions of dollars. It is not accounting sophistry. It is simply not. It was a real problem and I congratulate both Dr Smith and the current Minister Judith Collins on turning it round.  
I want to touch on the Rt Hon Winston Peters’ comments about it not being an insurance scheme. He is quite right on one level. The architect of the royal commission report Sir Owen Woodhouse was at pains to point out that this should not be an insurance scheme like other insurance schemes but he did acknowledge that when one creates an incident-based event where payment or rehabilitation follows an accident through no fault and that the levies are subject to the experience of how many claims and the claims’ duration that is by any measure an insurance scheme. What he did say in the report though and I think it is very important is that it should not be risk rated. In fact no party perhaps with the exception of the Greens now believes that the scheme should not be risk rated. What that means is that the forestry worker pays the same premium as the office worker in our out-of-Parliament offices. Simple nonsense. So the levy differentials are about 10 times. Sir Owen did not say that that was a good idea. There is no one in this House who would now agree with him. He made no reference—in fact he made passing reference—to women. He said that housewives should possibly get some cover after about 4 weeks of suffering an injury because the times did not have women at work. It certainly was not written for the very modern multicultural multi-gender work environment that we now have. This is very important because the royal commission report has been around for 42 years and the five principles that underpin the ACC scheme are still real and enduring and this Government subscribes to them. But the report itself is not a sacred cow. It must move with the times. We are in a very very different environment from the one in 1967 when that report was written. I think the changes that are being made are very sensible and necessary. Heaven help us if Labour and the Greens ever get back to the Treasury benches and soften and just leave the scheme to its own devices and bring back a come-one come-all scheme. The simple fact is that some things are caused by an accident some things are medical and some things can be both and there will always be people who are disappointed not to have their claims accepted.  
The last thing I want to say is directed at the staff of ACC. Mr Little has said in the media that this is the worst crisis in 38 years of ACC and some of the senior members of ACC would probably chuckle at that. It is not—it has actually been through the mill on two or three occasions. I was a member of the staff at ACC in 1997 during the last pretty big crisis and they got over it and they improved it and they made the scheme better than it ever was. So I say to the members of ACC the 2500-odd staff right around the country: “We back you. We back the things that you do for the 1.7 million claimants.” The vast majority of them get excellent service and are compensated and rehabilitated in a fair and timely manner even when sometimes a little bit of tough love is involved in getting people back to work on a part-time or graduated basis—things that I know some but not all of the unions would agree with. So I say to them: “Hang in there. You are doing a fantastic job and keep up the good work.” 
The debate having concluded the motion lapsed.