Parker David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeParker David: Questions for Oral Answer — Questions to Ministers[Sitting date: 28 May 2013. Volume:690;Page:10397. Text is incorporated into the Bound Volume.]6.Hon DAVID PARKER (Labour) to theMinister of Finance: How much revenue will ACC levies over and above those recommended by ACC in 2012 contribute to the Crown’s finances in 2013/14 and if he had followed the advice of ACC what would have been the effect on the surplus or deficit in 2014/15?Hon BILL ENGLISH (Minister of Finance): As the ACC Minister said last December at the time that the previous decision was made to keep ACC levies unchanged the Government was focused on ensuring that the signs of improved performance in ACC could be sustained over time in order to avoid volatility in the levies—that is dropping them and then having to increase them. At the time we also said that we took into account that a reduction in ACC levies would have a direct impact on the Crown’s operating balance. In answer to the question ACC recommended a $317 million reduction in 2013-14 rising to $383 million in 2014-15 which would have passed through directly to the operating balance before gains and losses if it had been accepted. As it happened Budget 2013 subsequently allowed for levy reductions of around $300 million in 2014-15 increasing to around $1 billion in 2015-16. These have been fully incorporated into the Budget forecasts and we remain on track to surplus.Hon David Parker: Does he agree with the Hon Judith Collins who stated at a party conference just this last Saturday that both the earners and workers accounts are now fully funded; if so why is he not lowering ACC levy levels now as recommended?Hon BILL ENGLISH: Well we have signalled the path in the Budget and ACC levies will be reduced on 1 April which is the next possible opportunity after followingthe correct statutory process which means that decisions will be announced in November. But it is important to understand that the success of ACC has been built on improved rehabilitation—that is getting more people back to work sooner. We have been anxious to ensure that its improved performance under Minister Smith and then Minister Collins is well bedded in so that levy reductions do not have to be reversed later.Hon David Parker: Is the Government taking more than $650 million extra in ACC levies than was recommended and does he realise that that is the equivalent of 325 years of the $2 million per annum extra going from Government funding into food in schools announced today?Hon BILL ENGLISH: Whether you regard it as extra is a matter of what you think the core performance level is of ACC. Under the previous Government that would not have been near enough actually because ACC was performing so poorly on rehabilitating injured people and people who had serious accidents. Now that it has improved we have the opportunity to pass those levies through. The Government has been conservative about it. That is consistent with the way we have managed all Government finances.Hon David Parker: Why is his Government using ACC as a stealth tax?Hon BILL ENGLISH: Well I think the point of the Budget announcements is that we are using it as a stealth tax cut actually—that is over 3 years we will be able to leave $1.6 billion per year after 3 years in the hands of New Zealand’s businesses and households because the performance of ACC has greatly improved compared with the time when that member’s Government was in charge.Hon David Parker: Given that the Minister of Finance has just admitted that he is using ACC as a future stealth tax cut—[Interruption]—that is exactly what he said. How is it proper for National to use ACC as a political jellybean jar overfilling it now and then doling out the lollies—doling out the lollies—in an election year?Hon BILL ENGLISH: That of course would not be acceptable. We are treating it according to prudent financial management. But the difference here is that this Government cares sufficiently about rehabilitating people with serious injuries and accident victims and that is what we are focused on. The result of that is an improvement in the Government’s books and lower levies for businesses and companies. What works for those who are injured and vulnerable is the most important. Now that we are delivering that there are benefits for the Government’s books.