Injury Prevention Rehabilitation and Compensation Amendment Bill — Third Reading 
Injury Prevention Rehabilitation and Compensation Amendment Bill — Third Reading 
[Volume:637;Page:7780] 
Injury Prevention Rehabilitation and Compensation Amendment Bill 
Third Reading 
Hon RUTH DYSON (Minister for ACC) 
: 
 I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill be now read a third time 
. This bill merges the Accident Compensation Corporation’s (ACC) self-employed work account and the employers’ account into a single work account so that levies better reflect industry risk and are more stable. The bill also renames the medical misadventure account as the treatment injury account. 
Under the current ACC account structure the use of self-employment as a rating factor results in the different treatment of small businesses that carry out similar activities that entail similar risks. For example self-employed plumbers currently pay a different levy rate from that paid by sole-trading plumbers who have set themselves up in a company structure even though they face exactly the same risk of workplace injury. The basis for this unfairness lies in the failed privatisation attempt made by the previous National Government. The insurance industry did not want to insure all self-employed people because they knew that they would not be able to make enough money from them due to administration costs. So an arbitrary distinction was made based solely on business structure and the self-employed work account was thus created. 
With coverage for personal injury being renationalised the self-employed work account is no longer needed. The account merger will allow levies paid by businesses to be paid on the industry risk associated with their industry grouping rather than on their business structure. In its time the self-employed work account has been very unsuccessful. It has high volatility due to its small earnings combined with a high turnover of levy payers from year to year. Small businesses in the self-employed work account particularly have cited levy instability as having created problems for their business cost planning. 
Merging this account with the employers’ account will ensure that the levies are more stable for both the self-employed and employers. The merger will also improve the focus on reducing the risk of injury by encouraging industries to better coordinate health and safety across their workplaces regardless of their business structure. 
This merger is not intended to redistribute the excess reserves currently in the employers’ account to the self-employed. The bill therefore provides for a 3-year transition period for self-employed and employer levy rates in each industry or risk class and the relative funding positions of the employers’ account and the self-employed work account to be equalised. This provision enables the Government to ring-fence the difference in the funding contributions between the self-employed and employers—approximately $100 million of the excess reserves in the employers’ account—and reimburse these funds to employers through rebates during the transition period. 
I know that the Opposition will again try to pick out the businesses that may have a levy rate next year that has increased on this year and blame it on the bill. The fact is that the indicative average levy rate under the new merged work account has been calculated at 89c per $100 of liable earnings for employers and the self-employed. This rate is based on the same funding target that is currently set down for the separate accounts and is considered to be sustainable over 3 years. After the transition period is complete employers and self-employed people in the same industry or risk class will pay the same levy rate. 
The Government intends that the remaining overfunding in the merged account be returned to levy payers during the 2007-08 levy year and out-years. If as some have requested the entire excess reserve in the employers’ account were to be refunded to levy payers in one levy year employers would experience a significant increase in levy rates in years to come. That is because the ACC would not have any excess to fund the future cost of claims. What many—including the Opposition spokesperson—do not understand is that levies are collected each year in order to fund not only the cost of claims for that year but also what the claims would cost across the lifetime of the injury. If the excess in the account was fully refunded to employers next year levies would need to be dramatically increased in future years in order to pay for the ongoing cost of the claims that were made. 
Using the bill to destabilise levies from year to year would be totally inconsistent with the objective of levy stability which is a fundamental principle of both this bill and the Injury Prevention Rehabilitation and Compensation Act which it is amending. If the amount levied from employers was lowered significantly more than is planned ACC Partnership Programme employers would be more likely to exit the programme to take advantage of the rebate of the excess funding. That would obviously jeopardise the functioning of the programme and it would also give financial advantage to partnership programme employers who had not financially contributed to the account from which they were benefiting. 
This merger is also likely to have a positive impact on injury prevention in workplaces. By bringing self-employed people and employers together at the risk-class level the experiences of the respective groups would come to bear on the levy rates. This will incentivise a greater level of cooperation on injury reduction between employers and the self-employed within the industry groupings of the new work account. 
 As both of the accounts are projected to be adequately funded for 2007-08 merging the accounts to take effect from 1 April 2007 will make the transition to a single work account easier by reducing the impact of the merger on levy payers. During the 2007-08 levy round ACC provided levy payers with information on the proposed policy package including indicative levy rates for the merged work account to assist those seeking to understand the impact of the merger proposal. 
Following the levy consultation ACC published updated indicative levy rates on its website. The Department of Labour also wrote to each of the organisations that provided a submission on the bill and to those who had made submissions on the proposal during the levy consultation with further information on how the merger of accounts would be implemented. 
I note that the two amendments in the name of Dr Paul Hutchison the former National spokesperson on ACC were defeated in the Committee of the whole House. What Dr Hutchison was asking for in his amendments will be provided under my assurance to the House—and I repeat this in my third reading speech—on the ACC website. In my view the proposal was sensible but it does not need to be in the legislation. However it is something that I would be happy to reconsider in the future. 
As mentioned the bill also renames the medical misadventure account as the treatment injury account. This renaming of the account is appropriate as the terminology in the Act was changed from “medical misadventure” to “treatment injury” some time ago. The reason for leaving the name of the account at the time was to allow health professionals and health professional organisations to become familiar with the treatment injury regime. Now that a sufficient period has passed for these groups to come to terms with the new terminology the time is right to rename the account. 
This bill builds on the framework provided in the existing legislation by ensuring that our accident compensation scheme is funded in a fair and sustainable manner. I conclude by thanking all members of the Transport and Industrial Relations Committee for their careful consideration of the bill in a short time frame. I also thank the officials from both ACC and the Department of Labour for their fine work on the bill. I commend this bill to the House. 
PANSY WONG (National) 
: 
 That was an appalling contribution from the Minister for ACC Ruth Dyson who is no more than an apologist for the State-owned monopoly agency the Accident Compensation Corporation (ACC). This bill does nothing more than legalise stealing from both the employers’ account and the self-employed work account and I will seek to explain that point further. 
First of all today Treasury released the 6-month account to December of the Government account. Once again that account recorded an operating surplus that was $1 billion up on the forecasts. But Treasury went on to say that most of the extra money could not be spent because the surplus was mainly due to increases in investment return from the New Zealand Superannuation Fund the Government Superannuation Fund and ACC. Actually that additional contribution from ACC amounted to $254 million. How appropriate it is for Treasury to go on to say in its press statement that those entities will hold on to any gains that are made. 
Let us now come back to ACC. Apart from holding on to that $254 million it is holding on to a $688 million surplus in the employers’ account which represents a 63 percent margin. It is also holding on to the $60 million surplus that is in the self-employed work account before it is merged which is a 20 percent margin. Even the Minister herself said that ACC wanted eventually to operate to an 11 percent margin on the account. But before the merger it insists that the surplus margin needs to stay at 53 percent so that in future it can make rebates to those people. But why in future? Which other entity in New Zealand has the luxury of taxing people holding on to the surplus and not paying interest? Even the Inland Revenue Department would pay interest on the use of taxpayers’ overpayment of tax—it would rebate that. 
This illogical ridiculous stance of ACC and the Minister seeks to penalise those hard-working self-employed people because for the next 2 years they will be asked to front up with the additional $100 million so that their account which sits at a 20 percent margin will go up to a 53 percent margin. How logical is that? Well let me give the public and those poor self-employed people in the meat industry a taste of what is to come for them in the next 2 years. Self-employed people in the meat industry if there were to be no merger would have to pay a levy of only $6.57 per $100. I ask members to guess how much they pay—[ 
Interruption 
] Well I am glad that Mr Peter Brown is at last speaking up on behalf of those self-employed people! He supported that—he thought that the rate of $6.57 was too expensive. But I ask members to guess what he did. He supported this bill so that that rate could go up to $8.83 per $100. I am looking forward to those poor self-employed people in the meat industry knocking on the doors of New Zealand First members’ electorate offices and asking them who put them into Parliament so that they could penalise those hard-working self-employed people. 
How illogical this bill is which the Minister insists is helping the self-employed! The Meat Industry Association wants an answer from the Minister which is still to come. It pointed out that under this bill members of the Meat Industry Association would have to pay an additional $360000 for the next 2 years though past history has shown that claims are only $25000. So I am really looking forward to Mr Peter Brown of New Zealand First who has no sympathy and no empathy for hard-working self-employed people taking a call to justify his party’s position. 
It is outrageous for this Government and the parties that support the passage of this bill to impose on the one hand a surcharge of $100 million on the self-employed and on the other hand to hold back the $688 million surplus from the employers’ account contributors. I proposed a sensible amendment during the Committee stage. ACC says it wants to achieve a margin of only 11 percent. I was being conservative; as a National member I feel apologetic towards my colleagues for saying that ACC might get it wrong so we should give it a 9 percent additional margin. 
 So my amendment is to bring down the employers’ account to a 20 percent margin and still allow ACC a 9 percent leeway which means that employers should be entitled to a $500 million rebate—which is their money. At the same time that sensible amendment would have meant that self-employed people would not be penalised for the additional $100 million. 
I want to acknowledge Mr Gordon Copeland and the whole United Future party. They at least came to this Parliament to stand up for their supporters hard-working self-employed people. They support that sensible amendment. 
The other sensible amendment that I have moved is to defer the passage of this bill until April 2009 for a very good reason. New Zealand would then have a National Government which would have a Minister like myself who would not make apologies for ACC and who would make that State monopoly agency work for the people—not like the Minister says hold on to confiscate and steal those surpluses so that ACC can feel comfortable in case it gets the calculation wrong. That is why my diligent and intelligent colleague Dr Paul Hutchison also asked why ACC cannot subject itself to an independent team to look at the way it arrives at those levies. After all the corporation has a history of building up those reserves. The difference between National and Labour is that we are on the side of hard-working New Zealanders and we oppose the passage of this bill. 
SUE BRADFORD (Green) 
: 
 I will take just a short call this afternoon to confirm that the Green Party welcomes the return of this bill to the House for its third reading and that we continue to offer our support to this and all other Government efforts to work towards a fair and sustainable accident compensation system for this country. There is still much that needs to be done but every constructive step along the way helps. 
The most important part of the bill we are dealing with today is the merger of the accident compensation employers’ account with the self-employed work account. The Green Party believes it is only sensible and equitable that people should not be discriminated against on the basis of their business structure when their injury risks are the same. These kinds of historical inequities arose from the National Party’s unfortunate privatisation project in the late 1990s and it is just a pity that we have had to wait 7 years to see this particular discrepancy put right. 
I would now like to take a couple of moments to explain briefly why the Green Party did not support Pansy Wong’s amendment yesterday in relation to the merger of the accounts. The issues that the National member was trying to address are covered already in clause 8 through a new section that permits the Government to make regulations to cover a transitional period until the 2009 tax year. That change allows the Accident Compensation Corporation (ACC) to deal with the problems that Ms Wong rightfully raised and the Government has indicated that $100 million will be set aside for that purpose. This money will in effect act as a rebate for employers but will be assessed with reference to their business activity risk and to maintaining the stability of levies. Pansy Wong wanted to leave this new clause intact but also to rebate in with no defined mechanism in 2007-08 an additional 20 percent across the board to employers. The cost of this would have been a further $100 million. 
Essentially she was recommending an arbitrary one-off gift of $100 million to be made by ACC to employers making it a final total extra cost to the corporation of $200 million given that she was seeking to leave the Government’s proposed transitional mechanism intact. The Green Party therefore voted against the National Party amendment as we believe that although we acknowledge that historical anomalies exist it is better to start with a clean slate by simply merging the two accounts as encapsulated in the bill. 
Merging the employers’ account and the self-employed work account into a single account will be a big help in equalising and lowering the cost burden for the self-employed who will also still have the option of taking out the CoverPlus Extra insurance if they want to. The Green Party welcomes the third reading of this bill and looks forward to further improvements to our accident compensation system—perhaps of a more substantial nature next time round. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 The Injury Prevention Rehabilitation and Compensation Amendment Bill is a very unfortunate bill in that it cements in the dull monopoly of the State’s Accident Compensation Corporation (ACC) which unfortunately is becoming less and less efficient as we go on. We have heard the Minister speak about the changes in 1998 that galvanised the ACC monopoly into action. Privatisation was associated with a rapid number of changes which included early rehabilitation much better safety procedures and efforts within the workforce a lowering of the levies and more important than anything else a lowering of accidents in the workplace. The changes galvanised the ACC and it has benefited from them over the last 5 to 6 years. It is only now that we are starting to see the slowing down of ACC and the typical monopoly reactions and this bill absolutely epitomises them. 
In the title debate I suggested that the bill be called “The Labour Government (Defy Commonsense) Bill” which is what it does by rewarding those at high risk and penalising those at low risk. It could also include a grab of over $400 million from employers who paid that money in good faith believing that their account was fully funded and I say that money should be given back. The merging of the accounts is directly the opposite of the basic insurance principle of matching premiums with risks. In this bill the employers’ account which is associated with lower risks lower claims and lower accident rates will be merged with the self-employed work account which is associated with higher accident rates and higher claims. The Labour Government intent on its socialisation of the insurance system is merging those two accounts to the detriment of the efficiency of ACC and to the detriment of the direct signals and incentives to improve behaviour. 
The Labour Government is in complete denial over the value of experience-rating. We heard that the other night when the Hon Mark Gosche was talking about insurance. He just wants it all to be pooled—all with the same sorts of premiums. That is sheer madness in terms of human behaviour and the behaviour that we know— 
Dr Jonathan Coleman 
: Actuarial madness. 
Dr PAUL HUTCHISON 
: It is actuarial madness as my colleague Dr Jonathan Coleman calls it; he is absolutely right. One of the particularly concerning things about the last 6 to 7 years under the Labour Government is that moderate and severe accident rates have gone up in this country. There have been hundreds of thousands of accidents and the Labour Government through this bill is sending the wrong signals. It should be doing the direct opposite of what it is doing and making sure that those who are at higher risk do pay higher premiums. That is the particular madness about this bill. 
The other thing that has occurred with the merging of the accounts is that the Labour Government has totally broken faith with employers. They have been paying their levies in good faith thinking that their account would be fully funded and they have accumulated a surplus in the order of $570 million or something like that where the risk margin has risen to 163 percent. I say good on Gordon Copeland from United Future for pointing out how silly the Labour Government has been. ACC itself recommends a risk margin of 111 percent. My colleague Pansy Wong suggested the very sensible amendment that the risk margin should go to 120 percent and that the money grabbed by this Labour Government should be given back to employers—where it came from. But no what is the Government going to do? It is to go ahead with a risk margin that is way over that recommended by ACC itself. That absolutely defies principle and it absolutely defies common sense. I say good on Gordon Copeland for pointing that out. 
There is no doubt that a lot of other things are wrong with this bill but I was prepared to put in two very sensible amendments that would at least have brought transparency into the auditing process of ACC so that both the public and levy payers could understand it. I was glad that the Minister said those amendments were intelligent and constructive but then she turned round and did not support them going into the legislation. At least she has said she will ensure the information is put on the ACC website and we will hold her to account on that. But it shows the contrariness of the Labour Government that when it accepts that an amendment is constructive and intelligent it then turns round and does not vote for it. 
Finally I would like to point out another thing that just cements in how Labour has broken faith with the process one would expect from ACC. In the transitional provisions of this bill the Government has said that the levy consultation process for 2007 and 2008 will be bypassed. That is an absolute travesty. It is ominous and unprecedented and it goes in line with the grab of $468 million that the Government has taken from employers. 
This bill absolutely reflects just how badly the Labour Government understands the basic principle of accident insurance. It reflects that the Government is not prepared to put incentives in place to reduce the number of accidents in New Zealand and it reflects the Government’s inability to be able to stick with the time-honoured process that all levy players expect. It has done away with the consultation process for 2007 and 2008—and that is shocking. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 The bill we are about to pass through its third reading the Injury Prevention Rehabilitation and Compensation Amendment Bill came to the select committee that I chair the Transport and Industrial Relations Committee and I was interested to note some of the strange comments from National speakers last night about the process the select committee used. We had a very limited time—which had been voted on by this House; it was not decided upon by the committee—that meant we were not in a position obviously to open the bill up to the normal public process of submissions. So we chose a very broad range of representative groups of employers unions and other interests to make submissions. They did so very well and they came forward with some interesting views on the matter. It is interesting to note that all of the National members on the select committee agreed with that process; there is no record of National members voting against it. Yet they came into the Chamber and took cheap shots at the select committee chair—myself—last night for a process they had agreed to unanimously. That paints the picture of the standard of Opposition we have—purely sitting there not looking at the realities— 
Peter Brown 
: Pansy Wong was one of them wasn’t she? 
Hon MARK GOSCHE 
: I think Pansy Wong was one of them but I am not sure because they change spokespersons so regularly over on those benches that it is very hard to keep up with who is the spokesperson on accident compensation this week and who will be the spokesperson next week. 
But the fact of the matter is that the members of that party over there were in agreement with the process and they never raised a single vote against it in that committee. That actually illustrates that they approach their job as an Opposition from a fairly lazy viewpoint. I say that they have a fixed position on these matters; logic and rational argument does not actually count with them. That is why not one of them is able to explain why they want to vote against this bill and punish self-employed people. That is supposed to be the party of entrepreneurial spirit the party of capitalism and the party that supports self-employed people who quite often go on to form companies and run larger businesses. But many many people in business in New Zealand start out being self-employed. It is the first step. 
Peter Brown 
: I was one of them. 
Hon MARK GOSCHE 
: Peter Brown indicates that it was his first step into business before he went on to greater things. And that is the case for so many New Zealanders. Why has the National Party turned its back on them? After making the mistake it did back in 1998 or 1999—or whenever it was that it hocked off the Accident Compensation Corporation (ACC) to its mates in the private insurance industry—why does National want to repeat that mistake 15 or 16 years on and show that it has not learnt anything? In fact National is prepared to say to hard-working self-employed people out there that they are on their own as they were when it hocked off ACC last time and set up the separate account. The account is not there for a good reason and the evidence that was presented to the committee in relation to the bill showed that. 
The reason there was a difference between the self-employed work account and the employers’ account was predominantly that the self-employed work in high-risk industries. That is the reason. It is not because of any other reason; it is because self-employed people were in industries like fisheries farming and forestry when they happened to set up as self-employed persons. The risk for those people is the same and we illustrated that last night when Dr Paul Hutchison—strangely—chose professional rugby league players or rugby union players as an example. He tried to argue that if professional rugby league players running out on to Mount Smart Stadium for the Warriors had set up their business affairs and turned themselves into companies—and I am sure that some of them do—they should pay a different levy from the people in the same jerseys running out on to the same field in the same team who were self-employed. We on this side of the House—and on those other two sides because National is the only party voting against this legislation—are still waiting for a rational logical explanation as to why a self-employed rugby league player should pay a different premium from and have a different risk to the one who has set up a company. It is the same for a plumber. 
The select committee heard from a representative of the Seafood Industry Council who was in a cleft stick. He said that he was not taking a position on this bill as the National members wanted him to do because he wanted to be able to live a little longer. If he had said he was for the bill he would have half his membership after his throat and if he had said he was against the bill the other half would be out to get him. On the back of fishing boats that situation may occur—people with exactly the same risk and exactly the same job but operating in a different way in terms of whether they are self-employed or set up under a company structure. 
So the situation is that National is again parading to the nation its desire to return to the failed policy it had back then in the late 1990s of privatising ACC despite all the evidence that where that has happened or where it is the basis of worker compensation around the world the levies for everybody are higher and the services are not as good. In my view we have the best system in the world. It is envied by many and a few have managed to try to copy it. But does the National Party recognise that? No! 
Sitting suspended from 6 p.m. to 7.30 p.m. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 Let me make the New Zealand First position clear from the onset. When we last debated the issue of accident compensation we came down in favour of privatisation. We voted against the bill that did that in 1998 or early 1999 as I recall because we did not think it gave enough lead-in time before the election but we thought the merits of privatisation outweighed a monopoly-type situation. We have not had a debate on it since. 
Hon Maurice Williamson 
: Good man! 
PETER BROWN 
: I thank the member for telling me that but I want to make it clear that we believe that a private scheme or one that allows a degree of competitiveness provides for efficiency innovation and cost-effectiveness whilst if there is a monopoly there is monopoly-type thinking. 
But I want to be fair to the Government—[ 
Interruption 
] I have to say to that member over there that he is so imbalanced that he will fall off his pedestal. But we take a balanced approach; we voted against the 2000 bill to nationalise or reform—whatever it was—the Accident Compensation Corporation (ACC) and we made a few stipulations at the time. On behalf of New Zealand First I personally spoke to two Ministers the Hon Ruth Dyson— 
Hon Maurice Williamson 
: Two Ministers? 
PETER BROWN 
: Yes there were two of them at one time. It was overpowering—just me against two Ministers and both of them women. So members can see that I was at a huge disadvantage. But I spoke to them and outlined our concerns. Over the years—we have to be fair—they have addressed many of those concerns. They have not got them all yet but the last one was to incorporate medical misadventure into the accident compensation regime. Up until a few months ago—I think it was a few months ago; let us say it was a year ago—a person subject to medical misadventure had to prove his or her case. We said that was totally wrong from the word go. The Government has accepted that and has incorporated it under the accident compensation banner. They now want to change the term from medical misadventure account to treatment injury account. We do not like that; it does not reflect what it is all about. But nobody has come and said anything about it at all—the public have not the National Party Opposition just accepts it— 
Hon Maurice Williamson 
: Didn’t know until tonight! 
PETER BROWN 
: They did not know it—the member sits on the committee! So we are not going to pull the Injury Prevention Rehabilitation and Compensation Amendment Bill down for that but I am registering tonight that we are not happy with it. 
We are happy that the employers’ account and the self-employed work account are being combined into one account. After my managerial role as a stevedore I started my own little business. I was self-employed. 
Hon Maurice Williamson 
: Really? 
PETER BROWN 
: I was self-employed yes. Then I took on people. I took on a partner— 
Simon Power 
: Sure? 
PETER BROWN 
: I am absolutely positive I say to Mr Power. I had quite an enterprising little company and I was doing quite well. But I paid the same levy—as I recall—as I did when I was self-employed. It did not occur to me that there should be a difference. I was doing exactly the same job and I should pay the same levy. That is what this legislation is all about. I heard National Party members saying the self-employed should be paying more. In actual fact that is not true. It is the higher risk occupation where more should be paid and where the organisation or the individual is not prepared to address the risk potential more should be paid. This bill brings them all together and therefore the levy is paid on the risk. 
Now we have the situation of whether the levy structure is correct. I listened to Pansy Wong in the select committee and she made an impact on me. I thought she had a point. [ 
Interruption 
] I listened to her—and she will verify this—and I asked her to get me some details. She gave me some very loose details. Then I asked her whether she would give me further details that she was going to present to the House. If I could convince the Minister and the Government of this would National support it? She said oh no National opposed it anyway. So I thought it was going a little bit beyond— 
Hon Maurice Williamson 
: She would have said that if it’s good legislation we would have supported it. 
PETER BROWN 
: No I do not think she was saying that at all. I then heard we should be paying the money back to the employers because there is too much money in the account. I listened to Gordon Copeland last night. He was outraged. He was actually tearing his hair out with anger and frustration because the money should be paid back to the employers because there is too much in the account. 
Simon Power 
: Gordon Copeland being self-righteous? No! 
PETER BROWN 
: I can tell members that he was sitting behind me and with the hot air coming off him I nearly floated off. But I am sure that when Judy Turner gets the opportunity she will explain exactly about this. Let me tell members that when they look into the practicalities of paying the money back to the employers they will see that it is downright impossible. Some employers last through the whole period some start up and some fall over. It is impossible to calculate who should get what. The rebate could be cut or the rebate that the Minister is saying will occur in the fullness of time could be increased. 
But let me say to the House with some sincerity that today I had a letter from a guy who started out his life as a fitter some years ago—[ 
Interruption 
]—I ask the member to listen to this because this is important. He started out and he worked on a number of projects that involved asbestos. Now he has asbestitis— 
Hon Member 
: Asbestosis. 
PETER BROWN 
: I thank the member for correcting me. That is what he has. He has been diagnosed he has been told it is a dreadful disease and he has been told it is terminal. He has gone to ACC and asked for a payout of a lump-sum compensation so that he can live the rest of his life in comfort. They have given him a pittance of an independence allowance and have told him that if he had put the claim in a few months after he did he would have got a lump-sum compensation. I tell members that his letter makes one’s heart bleed. It makes one cry. 
I ask the Government to look at these sorts of things. If there is money in the employers’ account that has to go anywhere the Government should think of extending the claim time. It should think of the people that this legislation is all about. We are insuring here under a monopoly organisation virtually all the workers of New Zealand. Some of those workers—mature people—are finding that they have been subjected to some sort of affliction that they did not know they had. It is emerging in their older age and they are now finding that they are entitled to peanuts when really we should be saying that there is money in the account—as National has been saying all afternoon and I think to some degree Labour has recognised that—and that instead of paying it back and giving greater rebates we should be extending the claims back a year or two or three so that these people can spend their lives in some sort of dignity. 
That is the New Zealand First message to this Parliament and that is the message we are asking members to support. We will support this bill and we will pressurise this Government to address the real issues. Thank you Madam Speaker. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak in support of the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. I express at the beginning United Future’s concern that the Committee of the whole House failed to support the Supplementary Order Paper in the name of Pansy Wong that would have allowed a rebate to New Zealand employers. Her colleague Simon Power suggested that my colleague Gordon Copeland was self-righteous in his efforts to back Pansy Wong’s amendment which I find a little difficult to understand. Maybe he jumped in before he had all the facts. 
The Supplementary Order Paper that Pansy Wong was keen to get through last night talked about the risk ratio that the Accident Compensation Corporation itself has set. It believes that its assets should be 111 percent of its liabilities yet the current figure of the employers account is 163 percent. Its assets are 163 percent against its liabilities. My colleague Gordon Copeland figured out that that represents $468 million of overpayment to the employers’ account and he suggested that before the two accounts are joined and reconciled that money should be divvied back out to the people who had overpaid in the first place. We are disappointed that people did not see the vision of that last night so that that move could go ahead. 
I want also to correct something that the New Zealand First speaker has just mentioned. He talked with some apprehension about the new account called the treatment injury account and he was concerned that this was some sort of new provision. I say to Mr Brown that all that it does is reflect that we changed the terminology in an earlier amendment bill. We changed—as he rightly said—the fact that when people receive an injury due to a medical misadventure of some kind historically they had to prove that the medical misadventure had taken place before they could receive compensation. An earlier amendment bill changed that and in changing it we changed the terminology. So we no longer refer to “medical misadventure” under the accident compensation legislation. 
We now call it “treatment injury” because people no longer have to prove that there was negligence on the part of the practitioner from whom they received the treatment. If they have an injury and it is the result of the treatment then they receive compensation. So calling the account the treatment injury account is purely to reflect the new language and provisions of an earlier amendment bill. So it is nothing sinister; it has been in the legislation for some time now. In relation to medical misadventure if some fault is found on the part of a medical practitioner it is still the domain of the practitioner’s regulatory complaints authority. The medical practitioner can be put under disciplinary measures if that is deemed to be helpful to the situation. 
United Future supports the overall intention of this amendment bill. It does seem ludicrous that if people are doing the same job with the same level of risk they should be paying separate amounts depending on their employment arrangements—whether they are self-employed or employees. We think that is a nonsense and we are happy to see that issue resolved with this bill. We are very happy with the work that the Transport and Industrial Relations Committee did to bring the bill back to the House. 
I will reiterate that we are very disappointed that the Committee of the whole House failed to see the picture suggested by the Supplementary Order Paper that Pansy Wong was putting forward. I think it would have made a huge improvement to the outcome. I notice that the Green member Sue Bradford felt that the bill did cover that because regulation-making powers were mentioned in one of the clauses. I took it from what she suggested that she meant if we wanted to pay it back there is the potential to do it. I think it is an important issue. It is a lot of money and I think when those two accounts are blended we will lose sight of who is owed what and the matter will just be ignored. In fact what will happen is that surplus will end up propping up the new joint account and I think that is an unfair provision. However aside from that Supplementary Order Paper not being agreed to we are happy to support the third reading. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
Tena koe Madam Assistant Speaker kia ora tatou. The Maori Party comes to the Injury Prevention Rehabilitation and Compensation Amendment Bill aware of the responsibilities of the Accident Compensation Corporation (ACC) under the Injury Prevention Rehabilitation and Compensation Act of 2001. I understand that section 3 of that Act charges the corporation with “providing for a fair and sustainable scheme for managing personal injury that has as its overriding goals minimising both the overall incidence of injury in the community …”. 
As a consequence of the proposals that have come before the House during the passage of this legislation all employees self-employed people and private and domestic workers will pay levies into the work account with entitlements funded out of it also. The drive to create a fair and sustainable scheme has been complicated in the case of the self-employed work account by the fact that this account is often volatile due to the small number of earners and the potential claimant base. The incentive behind the bill is therefore to merge the employers’ account and the self-employed work account into a single work account. 
The Maori Party supports any initiatives that seek to address inequities and instability in the current system and to make compliance comparatively hassle free. The intention of the 2001 Act was to provide a level playing field for claimants whether self-employed in high-risk industries or in private employment. A level playing field is obviously something that every member in this House would support as being in keeping with the commonly held view about there being one law for all and due access to justice. 
In this context we were concerned to read reports from the Access Support Services lobby group that ACC is exiting blue-collar workers from the scheme at a faster rate than it is exiting white-collar workers. According to a study of ACC’s own injury statistics in 2005 a plant and machinery operator is twice as likely to be exited from the scheme as a clerk or administrator is. Workers involved in the agricultural and fishing sectors or in trades are also disproportionately more likely to exit the scheme than legislators and administrators or professionals. It would appear that the so-called blue-collar workers are less equipped and supported to be able to negotiate ACC support for their rehabilitation than say their white-collar counterparts. This clearly demonstrates a class bias and I might add a race bias. 
The Maori Party is advised that similar statistics are also likely to be seen for Maori workers as compared with non-Maori workers. However there is some lack of clarity around data collection which we want to raise in the context of this Injury Prevention Rehabilitation and Compensation Amendment Bill. It should be remembered that until 1998 ethnicity data was not collected for accident compensation claims. Ten years ago the ACC Injury Prevention Strategic Plan identified a goal to “substantially reduce serious injuries in ethnic groups overrepresented in injury statistics”. 
It goes without saying of course that even though Maori have a higher injury rate across the board Maori are significantly less likely to make an accident compensation claim and are more likely to be declined cover. In honouring this strategic goal ACC improved the collection of the ethnicity data by establishing the injury profile of Maori and Pacific peoples. Since 1998 ACC claim forms have included ethnicity as an option. However—and here is the catch—as it has not been obligatory it is difficult to relate claims injuries to ethnicity. Despite this what we do know from the information available to us is that the application and take-up rate of accident compensation by Maori is significantly lower than by non-Maori particularly given that Maori are overrepresented in injury statistics across all age groups. 
Let us look at the level playing field in more detail. The data tells us that the proportion of Maori continuing as claimants in a subsequent year is even lower and that Maori have significantly higher chances of being declined ACC support than non-Maori. We also know that Maori aged 25 to 64 years particularly Maori men are more likely to be injured at work than are non-Maori. This reflects the types of occupations that Maori men are overrepresented in such as manual and trade occupations. 
Therefore when we look at the purpose of this bill which proposes the merging of the self-employed and employers’ accounts a very obvious question is how Maori will fare. It is important to note from the outset that Maori and Pasifika people constitute the lowest proportion of self-employed amongst their populations. The ethnic group with the greatest proportion classified as self-employed without employees is the Asian labour market on 14.3 percent and the European labour market on 13.4 percent as compared with the Maori labour market on 6.5 percent and the Pasifika labour market on 4.4 percent. Those Maori who are self-employed are largely involved in the primary sector in particular in agriculture forestry and fishing. Those areas are known as high-risk industries and occupations. 
I am told that the Council of Trade Unions in its submission on this bill endorsed the merger approach as making practical sense in that it would bring clear focus to the areas of injury prevention and health protections across particular industries and enterprises. Therefore we would hope that the high-risk or low-paid industries within which Maori are generally employed—fishing farming and forestry—will benefit from the new emphasis on safety management practices and capacity for weekly compensation cover. In line with this new emphasis we would expect to see increased priority on educating the self-employed about safe working practices and the development and implementation of new measures to ensure that safety standards are adopted. 
During this third reading debate we want to bring to the fore again the previous concerns raised about the impacts of this bill’s proposals on the self-employed. We were aware that because of this bill the levies will almost certainly increase and in some high-risk industries like fishing and forestry levy increases could be quite significant. The table provided in the Government’s briefing paper suggested that there are likely to be increases of between 30 percent and 56 percent across a range of industries as a result of the merger. We would be interested in learning what these implications will be in particular for the employment areas of greatest risk. 
Finally the issues we have canvassed in this speech extend of course outside the coverage of this bill. The gap in claiming accident compensation cover between Maori and non-Maori the lack of awareness of accident compensation entitlements the inequality of outcomes for Maori the increased risk of injury that accompanies industries such as fishing forestry and farming and the serious issues related to the gaps in data collection do of course warrant far greater consideration than we can give in this forum. 
We the Maori Party have appreciated the willingness of the Minister to share with us the strategies that the Accident Compensation Corporation is leading such as the PaeArahi position staffing and general practitioner training in cultural competency and other initiatives related to the Maori access strategy. We support the merger as a way of enhancing the current system and we will therefore support the bill. We are hopeful that the issues we have outlined today will remain a high priority for the Minister and the agency. They will need to be a high priority if we are truly committed to creating an enduring and sustainable accident compensation scheme based on fairness and justice for all. Kia ora tatou. 
JUDITH COLLINS (National—Clevedon) 
: 
 I raise a point of order Madam Speaker. I refer you to Speakers’ ruling 16/5 regarding eating in the Chamber. The Minister on duty in the House tonight for the Government has been eating in the Chamber. She had a full biscuit going there and ate all the way through the speech from the Maori Party. I ask you Madam Assistant Speaker to ask the Minister to refrain from doing that. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I did not see the Minister but if she was doing that she knows there is a rule about it. 
SUE MORONEY (Labour) 
: 
 We are here to discuss the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. It is my privilege and my very great pleasure to rise to speak in support of the third reading of this bill. I have quite a bit of personal interest in this whole area and I want to talk about the world-class system we have in regard to accident compensation which is the envy of many other countries. When we look at some of the issues raised by Te Ururoa Flavell in the speech he has just made where he talked about people’s knowledge of their rights under this system I think we can reflect and see that it is just as well we do not have a system based on people having to know their legal entitlements and having to be able to afford to pay for lawyers in order to get any money back for injury treatment. 
Simon Power 
: It’s lawyer-free—that’s right! It works superbly well! 
SUE MORONEY 
: I know that National members would love to give this whole area over to lawyers and make it an absolute nightmare for working people. They really want to make sure that working people do not have good access to compensation when injured at work. However this Government will not sell our accident compensation system to the legal profession the Insurance Council of New Zealand or any other area like that. Our very fine accident compensation system is very accessible. By world standards it is much more accessible for working people than systems in other countries and we certainly do not want to go down the line of reducing that accessibility. 
This bill clarifies and simplifies the accident compensation system even more because it brings equity into the situation. I want to outline the background as to why we are even here talking about this bill which merges the two accounts of self-employed and employed people. It was an artificial split in the first place. If we go back in time we know that it was never meant to be the case with our wonderful accident compensation system. It was decided purely on the basis of industry and the occupations people were involved in which is how the levies were set traditionally. However in the 1990s the National Government saw fit to split the self-employed off from the employed in an effort to line the system up for privatisation by insurance companies. We are now coming full circle and rectifying the very artificial split that occurred during that time. So what we are now doing is consistent with the aims and objectives of the very collective system we have in place— 
Dr Jonathan Coleman 
: Of the Labour Party. 
SUE MORONEY 
: —yes that is right; the collective responsibility of the Labour Party—that ensures that people are treated equitably. This bill makes sure that despite what National members have tried to argue the scheme does give the right incentives. Of course it does. This bill actually links the injuries to— 
Simon Power 
: Yield to Darien Fenton. At least she’ll say it with passion. 
SUE MORONEY 
: Mr Power might learn something from this because— 
Simon Power 
: I doubt it. 
SUE MORONEY 
: I am sure the member will because when National members argue that this legislation does nothing to link injuries to levies they are completely and utterly wrong. [ 
Interruption 
] I will explain. Jonathan Coleman does not know what I mean by this so I will need to explain it to him. When the levies were split based on the business structure it was nothing to do with the type of industry people were involved it but it was to do with the way their businesses were structured. How did that make the levies appropriate to the injuries sustained in those industries? No one from the National Party has been able to explain that to us yet. 
National members do seem to have a view on the self-employed. I am not sure what they have against the self-employed but they have tried to portray the view that somehow the self-employed take a whole lot of risks with their own personal health and safety that other people would not take. I cannot understand where the National Party is coming from on this issue. Why are National members so against the self-employed? Having been self-employed myself my understanding is that self-employed people rely solely on their ability to perform their jobs. Why on earth would they take greater risks with their health and safety than employed people? There is silence from the Opposition. That is what Opposition members have been trying to portray throughout this debate but they still have not been able to explain why it is that without any evidence they believe self-employed people are sloppier in their work practices or put themselves in harm’s way more than people employed by companies. It is very interesting that Opposition members should be arguing this because they have not been able to come up with a decent argument on it yet. 
But even more interesting is being a member of the Transport and Industrial Relations Committee that considered this bill and observing the National members on that committee. I thank the officials for the wonderful work they did on this bill and the large amount of very precise information they gave the select committee. They were able to put tables before us—quite complicated tables that took a while to work through—that showed exactly what the merger of the two accounts would mean for every industrial group. There were 127 levy risk groups and the officials went through in very fine detail what the levies would mean for each of those groups under both the separated accounts and the merged accounts. 
As I was looking through all those figures I was most interested in observing the National members who went straight to the pages of the businesses they owned and who seemed to be interested in looking only at what it would mean for the dairy farm etc. that they happened to own personally. The questions for the officials that came from National members simply reflected their own personal interests in this field whereas the rest of us—Peter Brown and the others on the Transport and Industrial Relations Committee—were focusing on what the impact would be for the rest of New Zealand. We were not consumed with our own personal interests; we were looking to see what would happen overall. However that was certainly not what was happening from the National Party’s perspective. 
But there was a bit of a dilemma because when the National members did look at what it meant for them personally they discovered that the levies looked pretty damned good under this situation. Under the new bill the levies for those particular members were looking a lot better when the accounts were merged. That was very interesting—I think it was one of those flip-flop moments—because it caused them the ultimate dilemma: “Do we argue for this bill as National Party members because it is personally good for us?”. Out of self-interest I could see them wondering: “Should I actually support this bill because personally it does a lot for me or should I toe the party line and back the Insurance Council position?”. What a dilemma! “Do I go as a National Party member with personal self-interest or do I back the party line to ensure that the party can have good donations from the Insurance Council?”. Well I think at the end of the day— 
Simon Power 
: I raise a point of order Madam Speaker. The member was fine until that last remark and you will know Madam Assistant Speaker that it is completely out of line to suggest that any political party or member of Parliament is under the influence or direction of any outside organisation. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is correct. The member will withdraw that remark. 
SUE MORONEY 
: I withdraw that remark. It was however very interesting to watch the dilemma and the flip-flop that was actually happening before us in the select committee about which line National members would take. 
They have ended up taking the party line but it sounded like opposition for opposition’s sake. I listened very carefully to what Peter Brown said in his speech and in discussions he was having with Pansy Wong looking for the very fine detail and the evidence for Pansy Wong to back up the facts she was asserting about this bill. When those facts and the detail was not forthcoming then that sounded to me as if the Opposition were opposing this for the Opposition’s sake. 
Finally I want to talk about what happens to people. We are talking about statistics and levies here but I want to talk about the impact on people’s lives when they are injured at work because after all behind all the facts and figures we have looked at that is the real point of what we are dealing with here. Certainly in my time of training health and safety representatives in the workplace I know that they were able to tell me very clearly about the impact on the lives of working people when injured at work particularly if workers had had to take time off work due to those injuries. So I want to remind the House that we are talking about significant impacts on people’s lives. That is where these levies go—to ensure that people can have dignity when they have been injured in their working lives. That helps to take the financial pressure off them and it can help the impact on family relationships as well. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 Labour supporters listening to the radio at home are going to be chilled to the marrow by that speech because that was the voice of the Labour Party rejuvenation programme. That dissembling illogical ramble is what Labour is bringing into Parliament and presumably we cannot go much lower than that standard of oratory. 
One of the arguments that we have heard from these Labour members throughout is that insurance premium will be dictated by business structure. Mark Gosche spoke constantly about the example of the rugby league player. He was saying that just because a rugby league player is self-employed rather than having a business structure that player will not be tackled any differently from anybody else. They are saying that people in the same occupation have the same level of business risk. They do not seem to get the point. 
Let us put the issue just a bit more simply. If the members over there cannot understand the idea that people doing the same occupation can have different levels of risk let us put it in terms they may understand such as political risk—who might be here after the next election—and put a risk premium on that. 
Mrs Yates the former member for Hamilton East lost her seat so one could say that she is unlikely to be here at the next election. So that is probably a medium-low risk. Then there is Minister Dyson. She probably will be here because she will have a reasonable list place but then she could explode at any moment. So that is a high level political risk. Then of course there is Mr Peter Brown the deputy leader of New Zealand First over there. He is a relatively safe pair of hands but the reality is there is not a hell of a lot of excitement there either and the final reality is that his party will not be here at the next election. 
So there are three members with three very different sets of circumstances. But under Labour thinking the same risk premium would be put on each one on the chance of them being here after the next election. Now that is a simple example and Labour members should be able to get that. The three members are all doing the same job but there is definitely a different level of risk for all three with regard to their being here after the next election. That is really what this legislation comes down to. 
The Injury Prevention Rehabilitation and Compensation Amendment Bill will pool two pre-existing accounts into one so that the risk is spread across all. But in actuarial terms that is complete madness because under the terms of risk rating there will always be different levels of risk for different individuals doing the same job. The reality is that that needs to be reflected in the premium. What we have here is a Labour Government bill that is driven purely by philosophy and purely by ideology. Labour hates competition. Darien Fenton is a hardbitten unionist and does not like competition. She is going to get up in a few minutes and tell members that. 
Darien Fenton 
: It’s a social contract! 
Dr JONATHAN COLEMAN 
: There she said it. Socialism—that is what she wants. She wants socialism in accident compensation and that is what one will get here. 
But the reality is if members look back through history when accident compensation was put up for competition under the last National Government—as it will be again under the next one—insurance premiums went down and the levels of medium and serious risk declined. It was good for the people; it was good for business. But that party over there is anti-business and anti-employers. I have never heard these members none of whom have ever been self-employed—although one claimed to be before—be so concerned about the rights of the self-employed. 
This bill is a total rort. Labour will combine these two accounts. They will literally be stealing $500 million from the employers’ account and spreading it across the account as a whole. But the real devious part is that Labour will be keeping those premiums low until just about the time of the next election so the issue will be off the political map—it will not be causing any problem. After the next election the levies will go up. Does that cause any surprise about this Government? It is not surprising at all. This Government has done so many dishonest and frankly unethical things to the people of New Zealand—this is just the latest in a long line. 
This Government decided that it would curtail the usual levy period for 2007-08; there was not going to be an adequate period of consultation. The pure reason for that was that the Government thought it could get away with it. It was not going to cause enough electoral damage; the Government would be able to sneak that through and it would not tarnish them. 
There are people listening at home who know all about this Government. They know that this bill is a rort. They know it is bad for New Zealand business. Do members know what the real irony is? Yesterday the National Party announced an historic piece of legislation that will enable businesses to give more to charities. They will get a tax break and it will actually benefit the very people that this craven unethical morally bankrupt party purports to represent. The reality is that the underclass will be better off. We oppose this bill—bottom line. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I raise a point of order Madam Speaker. I draw your attention to Standing Order 106 “Misrepresentation” which states: (1) A member who has spoken to a question may speak again to explain some material part of the member’s speech which has been misquoted misunderstood or misrepresented in the same debate.” I seek to explain that the honourable member who has just resumed his seat referred to me as a “safe pair of hands” and that I would not be here next time because I do not offer the excitement— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No I am sorry— 
PETER BROWN 
: I just point out that his leader got 40-odd percent. He is not here and I still am. 
The ASSISTANT SPEAKER (Ann Hartley) 
: That is not a point of order. The member knows very well that it is a point of debate. 
DARIEN FENTON (Labour) 
: 
 I am pleased to have the opportunity to speak in the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. I thought after the last contribution that we needed a bit of sense in the discussion and a bit of a history lesson. You know unlike the party opposite we actually want to have—and continue to have—a world-leading easy to access no-fault accident compensation scheme. The National Government nearly got away with the destruction of that in the 1990s. 
My perspective—and I am proud of this—is inevitably coloured by the experiences of people and injured workers under the various reforms of the National Government in the 1990s and I have not heard much comment about them. I know that the Opposition does not like us referring to the 1990s but in the absence of any commitments from National—I have not heard any—to maintain the current system of accident compensation and in view of its defence of privatisation that we have heard in this House from members opposite I have no choice but to reflect on the National Government’s past botch-ups. This bill has reminded me just how awful that past was. 
Prior to 1992 New Zealand had an accident compensation scheme that was fundamentally sound and cost-effective. It was held up as a model for other countries to emulate but after National came to power in 1990 Bill Birch—remember him—the then Minister in charge of the accident compensation scheme moved quickly to establish a committee to review the scheme. Interestingly the committee included a former Treasury secretary a former National Party leader and a senior manager from Shell Oil none of whom had had any significant involvement in accident compensation. This committee recommended a four-stage programme towards ultimate privatisation of accident compensation. 
In 1992 the Accident Rehabilitation and Compensation Insurance Act implemented stage one which transferred the cost of workers’ non-work non – motor-vehicle accidents from the employers’ levy to a new levy imposed on workers by way of a payroll tax. Although many campaigned against the 1992 Act the severe negative impact of its provisions particularly on severely injured people galvanised a number of groups into action prior to the 1993 election. This group called the Coalition on Accident Compensation included the New Zealand Council of Trade Unions the Disabled Persons Assembly the Women’s Division Federated Farmers Grey Power and other disability and community organisations. This campaign highlighted the significant number of cases where the injured person had been disadvantaged by the severity and inflexibility of the new approach to accident compensation under National. One such case highlighted how a tetraplegic 13-year-old boy was prevented from moving from hospital to his home because the new regulations denied the Accident Compensation Corporation any discretionary power to contribute to the cost of his necessary home care. 
Dr Jonathan Coleman 
: What’s that got to do with the merging of the accounts? 
DARIEN FENTON 
: I will get there. National made specific commitments during the 1993 and 1996 general elections that accident compensation insurance would not be privatised but it broke that promise—surprise surprise! The Accident Rehabilitation and Insurance Compensation Amendment Bill was introduced into Parliament in September 1998. That bill came about because of major lobbying from the Business Roundtable the Employers Federation and the Insurance Council of New Zealand with lobbyists from Australian insurance companies such as HIH Insurance and FAI working almost full time in Wellington during that period—and it does appear that the Insurance Council was at it again during the last election. 
Dr Jonathan Coleman 
: What about the SFWU? 
DARIEN FENTON 
: That union opposed it in case the member is interested. This bill created a work injury insurance market with compulsory private insurance statutory suspension of the common law right to sue and statutory limits on workers’ entitlements. The bill was promoted as providing choice—and we hear about that quite a lot from the National Opposition when it comes to talking about workers’ rights health and education and other social services. But you know the only choice was for employers who could choose between insurers competing for business. There was no choice for injured workers. Their legal right to sue which New Zealanders had traded off in the social contract in 1974—the enacting of the original accident compensation scheme—remained suspended by law. Workers were dependent on an insurance contract between their employer and an insurer which they were not even party to. 
What happened? Well the inevitable happened. The profit incentives of privatisation changed everything. There were arguments about which workers were covered and how. Workers were caught between one insurer and another because they had two jobs. There were many instances of spurious rejections where workers had to jump through hoops again and again. Many had huge battles getting the insurer to take their claim at all. Frustrated doctors had to deal with a plethora of insurance companies many of whom would not accept injury claims. There was a review process but it was a farce because it was conducted by a person appointed and paid for by the employer’s insurance company. It was a process based on a narrow interpretation of legal issues. People who lost—and it was very hard to win—were forced into the social welfare system but lost money in the change-over period with dreadful stand-downs. Many with injuries that took longer than a couple of weeks to heal were simply sacked and also forced on to the welfare system often with stand-downs and no money to feed their families. The entitlements were miserable injury prevention was not improved and rehabilitation was undermined. Injured workers became angry and depressed. I came across many cases where workers could have been rehabilitated but because of the battle they were having with insurers they simply lost hope. The market approach to injury prevention was based on the claim that employers would respond to the prospect of reduced future premiums by investing in injury prevention and health protection—and are we not hearing that again today? 
Well it did not happen. As I said we still hear arguments about it—that money somehow is a motivator for employers to provide decent prevention and rehabilitation. That ignores the fact that today’s workplaces are very different and the causes of accidents and occupational disease are complex and diverse. We can add to that the changes National made to health and safety laws and other deregulations of the labour market and see that National members created the conditions that not only failed to prevent accidents but allowed them to happen. Shame on them! National took away the right of workers to refuse unsafe work deprived the Occupational Safety and Health Service of resources and prevented workers and their unions from prosecuting unsafe employers. 
Labour has restored a modern social insurance scheme firmly founded on the principles of the Woodhouse commission in 1967 and this bill is part of it. It does seem necessary to explain to some of the members opposite the notion of the social contract—and there has been a lot of derision about those words—that was entered into by the people of New Zealand all those years ago and which New Zealand people still believe in. New Zealanders gave up the right to sue—we have to look only to America to see how good a decision that was—in return for a no-fault accident compensation scheme. Justice Woodhouse described the scheme’s objective as “the restoration of the [injured person] to the fullest physical mental social vocational and economic usefulness of which they are capable.” 
Thank goodness this Labour-led Government has acted to restore that social contract not least because HIH one of the insurance companies that was active in lobbying National for privatisation collapsed not long after in Australia in one of the biggest corporate failures that country had ever seen leaving thousands of workers without protection. Indeed a former Australian Minister of Small Business and Tourism Joe Hockey has repeatedly called for Australia to consider again the New Zealand accident compensation model. New Zealand’s accident compensation scheme has the cheapest cover of schemes in any comparable country in the world. Just across the Tasman employers are paying several times more. 
Demands for reserves to be paid back to employers are ridiculous. This has happened in the past and if members knew their history they would know that it has resulted in the near bankruptcy of the employers’ account. The money is not the employers’ money; it is a payroll tax and workers have shared the burden of that with employers so it does not belong just to employers. 
I used to dread accident compensation claims for workers because they were so hard to resolve under National’s changes. Today electorate office staff tell me that disputes over accident insurance used to be one of the biggest complaints they had during the 1990s. But that has all changed. That simply does not happen these days; the claims are few and far between. The mediation service this Government has introduced has been a resounding success. It enables people to be heard and issues to be resolved in a constructive way. 
This bill fixes an anomaly that needed to be fixed. It also builds on the commitment of this Labour-led Government to restore the social contract New Zealanders entered into in 1974 and have never voted to change. I commend the bill to the House. 
A party vote was called for on the question  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill be now read a third time. 
Ayes 71 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1; Independent: Field. 
Noes 48 
New Zealand National 48. 
Bill read a third time.