Little Andrew: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — First ReadingText is incorporated into the Bound VolumeLittle Andrew: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — First Reading[Sitting date: 02 June 2015. Volume:706;Page:4201. Text is incorporated into the Bound Volume.]ANDREW LITTLE (Leader of the Opposition):I rise to take this call because the ACC scheme is very important to the Labour Party and has been since its inception nearly 41 years ago. It had a long gestation arising out of the Woodhouse commission. It was hotly contested and hotly debated. It was supported by the Labour Party in Opposition and then by the Labour Party in Government after the 1972 election which made some very important changes to make it the scheme that it was when it came into force in 1974. This bill prescribes or creates a process that the corporation and the Government of the day can do already. There is nothing in this bill that cannot already happen.If we have a look at section 6 of the existing legislation—the Accident Compensation Act 2001—and the definition of “fully funded” we see that that definition encapsulates the very thing that this bill says it is doing. It takes into account the fact that the scheme has to be fully funded and defines what that is and requires the corporation to take into account that there can be fluctuations from one period to the next. We have this process already when it comes to levy setting that involves the corporation itself that involves the ministry that gives policy advice—the Ministry of Business Innovation and Employment—that involves Treasury and that involves a public process and it ultimately ends in Cabinet taking in all that advice and making a decision reflecting and representing that a political decision is taken because ACC levies are so widespread and important to the economy. That is all there at the moment. What this bill does is add a process whereby the Minister gets involved in a preliminary climate setting if you like which can happen already and indeed may already happen.The one thing that this bill will not do which is actually the most important thing is stop National Party interference in ACC and levy setting which is the real problem that we are desperately in need of a remedy for. The Minister’s account of the background and the need for this legislation demonstrates the problem. She cannot even give a straight account today of the history of the issues behind ACC levy setting.So let us get it straight. In the 1990s the then National Government and the then Minister Bill Birch ran down ACC levies. ACC under its old pay-as-you-go levy-setting process had built up reserves as was always intended. You read the Woodhouse commission report and the late Sir Owen Woodhouse was very clear about the way ACC would operate. It was a social insurance scheme and the corporation was expected to put aside reserves of levies—it would build them up over time—and that is in fact what happened under successive National and Labour Governments. And then the 1990s National Government came in and its members never liked ACC. They hated ACC. That is why they ran it down precipitated a crisis and said: “This is no good. We have to hike the levies.” and then they embarked on the campaign to privatise ACC because that is what National Governments do. They do not like social providers. They do not like the State being involved in social provision. They ran it down and they mounted the case for privatisation.But it did not last. The Labour Party at the time in Opposition was very clear that when it took Government it would not accept privatisation and it would reinstate the corporation as a proper publicly owned publicly run corporation doing what was required to prevent accidents and provide a basis to assist people who had been victims of accidents. Then it was fine and under the Labour Government of the 2000s the corporation went back on to its steady footing. It maintained the levy-setting process put in place in 1999 precisely so it could build up reserves. It maintained the full-funding model so it could build up reserves and its reserves were built up. By the end of that Labour Government it was generating surpluses of around a billion dollars a year—modest in the scheme of things but entirely appropriate to ensure some financial certainty and security for the corporation.Then there was a change of Government and then perhaps the biggest economic shock to hit the corporation hit in the form of the then Minister Nick Smith who could not be relied upon to keep his sticky paws off ACC. He mounted a silly campaign about a crisis. Nick Smith had not realised that New Zealand and the rest of the world were going through a thing called the global financial crisis. It was very interesting that in Minister Kaye’s account of the history of the justification of this bill she never once mentioned the global financial crisis. Well ACC as one of the top-performing managed funds of the country suffered the same fate as every other managed fund in the country privately or publicly managed—that is its balance sheet took a hit. The valuation of equities took a hit and went down. That was termed by Nick Smith and his National Party counterparts in Government as somehow a crisis caused by the previous Labour Government. It was not. It was typical National Party rubbish—nonsense trotted out to justify what National Government members really wanted to do and that is to hike ACC levies. They either got very poor advice or the advice they got they did not listen to or they just did not understand how financial markets worked which is surprising given the Prime Minister and his background. But anyway that is what they did.So ever since that time for the last 7 years they have left ACC levies artificially inflated not because it is good for the corporation but to meet their political agenda. The truth is we now know because we have had the independent research done on it that ACC is now over-levying New Zealand businesses and workers to the tune of $350 million—$350 million.Hon Nikki Kaye: Publish it. Where is the Infometrics report? Where is it? You’ve never published it.ANDREW LITTLE: The Minister is uncomfortable because she knows that is right. She knows that she has had advice and her predecessors have had advice that they are over-levying New Zealand businesses and New Zealand workers and she will not do a thing about it. So to give the appearance of doing something she then contrives this legislation to put in place this extra process so that she can sort of say “Oh no we want stability of levies and we want to make sure we’re doing it right. It’s going to take us another 2 years before we start doing the right thing by New Zealand businesses and New Zealand workers.” Here is the reality: the Government could do that now. It could do it now—reduce ACC levies. ACC is in a very healthy condition not because of anything that that Government has done but because ACC has been very good at retaining outstanding financial managers who have made good investments wise investments which have built up the reserves built up the value of the reserves of ACC to the point where now they are worth over $30 billion.I look at the title of this bill and it is hard not to break out in a wry smile when you look at a bill called in part the “Financial Responsibility” Bill and that fact that this Government when the work accounts and earners accounts are funded to the tune of 130 percent calls it financial responsibility. Well it is irresponsible to take levies off businesses and workers when you do not need to do so. Then the other word the Government uses in the bill is “transparency”. This is from a Government that cannot be open and transparent about things like its deal with Skycity over the convention centre. It still cannot be transparent over its deal with a Saudi businessman flying sheep around the world at New Zealand taxpayers’ expense. And Government members want us to take them seriously.This bill looks like it is doing something that is unnecessary. We will consider this bill in the select committee. We will support this bill in its first reading so it can be closely examined in the select committee and so New Zealanders can have their say and can say “Tell us whether this is needed or not.” and the experts can come in and say “This Government has got its history wrong.” We can do this. We do not want to be overpaying our levies. We just want a corporation that can act properly ideally independently of the Government and that can do the job it has been doing: looking after New Zealand workers’ interests when it comes to accidents; looking after New Zealanders’ interests when they are in their leisure time and have an accident; and levy them fairly responsibly and properly which is not what this Government is doing. Let us have a look to see whether this process adds anything. If we are not satisfied that it is going to add anything of any value at all then we will not support it beyond that. Let us have it examined—let us have it examined—but we will not support yet another convoluted process to protect this Government from the reality of its actions which are that it is continuing to over-levy and overcharge good businesses and good workers right across New Zealand.