Woodhouse Michael: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee 
Woodhouse Michael: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee 
[Volume:660;Page:9127] 
MICHAEL WOODHOUSE (National) 
: 
 I am very happy to take a call on the Injury Prevention Rehabilitation and Compensation Amendment Bill during what will be a pretty long evening I think. I will start firstly by acknowledging the honourable member Kevin Hague for his contribution to the Transport and Industrial Relations Committee as well as to the debate in the Committee of the whole House today. He is not a permanent member of the committee but he made a very considered contribution. I strongly disagree with many of the principles that underpin his view but I certainly acknowledge the clarity of his position. I also acknowledge the officials. I do not feel sorry for them; I do not think they need anyone to feel sorry for them. They are a very intelligent bunch. They discharged their duties well dispassionately and in accordance with the policy framework that the Government set them. 
I come back to the member Mr Hague’s questions about breaches of the Woodhouse principles as set out in the royal commission report. He mentioned community responsibility as an example of a breach by the Government in this bill and he used the example of experience rating. I suggest to the member that we already have experience rating. It is in the form of industry classifications. It is not a question of whether that is a form of experience rating; it is a question of degrees. We accept the principle of community responsibility. Everybody pays. The member Ms Street talked about the example of the motorcyclist who had been prepared to pay a levy. It is insurance 101. It is accident compensation 101 even if one does not want to call it an insurance scheme. However I think that even Mr Hague would reject the notion that workers in the forestry industry the fishing industry and the other very high-risk industries should pay the same premiums as office workers or casual cleaners. That is a form of experience rating. What I am trying to point out is that we can have community responsibility but we are talking about degrees. 
I think the member Lynne Pillay’s interjection on the Minister in the chair the Hon Dr Nick Smith summed up the attitude of the members on the other side of the Chamber. She said that Labour’s changes that moved away from the Woodhouse report principles were improvements but that the Government’s changes were somehow breaches of the report. I think that sums up the attitude of the Opposition on this matter. It is not rational. The finance-change deniers continue to think that we can have a scheme without constraint and that simply is not possible. They think that we can continue to have cost increases five times the rate of inflation and expect there to be no consequences. The levy payers the insured and the people who are claiming have a right to clarity about what they can expect and how much they can pay. The member Mr Parker goes on and on about comparisons with Australia. Those comparisons cannot be made; they are different schemes. I suggest that if this is such a fantastic scheme if the principles that underpin this scheme are so sacred why in 42 years has not a single Western jurisdiction followed them? 
Darien Fenton 
: Doesn’t the member support the scheme? 
MICHAEL WOODHOUSE 
: Absolutely but what I am saying is members should not deify it say that it cannot be changed and suggest that it is world leading when not a single Western jurisdiction has followed it. In relation to levy increases there is an idea that somehow because Australia’s levy rates are a bit higher than ours that that is OK we can continue to lump cost increase on top of cost increase on employers and expect them to pay. Well that is simply not the way business works but I would not expect members on the other side of the Chamber to understand that. 
I will move into an area though where I think we did agree. The Minister is not sure and I am not sure but I think it is still Labour policy that full funding continue. The Greens have been very clear in their principled stand against full funding and I think the committee respected that. They would like the scheme to go back to a “pay as you go” basis. That must be incredibly awkward for Labour because their members say they support the concept of full funding but just about every single union came to the select committee and said that they did not. The Service and Food Workers Union the Council of Trade Unions the Maritime Union the Rail and Maritime Transport Union the New Zealand Nurses Organisation the New Zealand Educational Institute the Public Service Association and FinSec all said they did not want full funding. But here is the thing: in response to questions about when they had previously articulated that view they could not say. Did they oppose it in 1998 when full funding was first proposed? No. Did they oppose it in 2001 when Labour made amendments to the bill? No. Did they oppose it in 2008? No. Not a single representative of the unions had previously said that they did not support full funding. Why would they? Full funding was working. 
I want to segue back to the second reading when the member Ms Street said in her call: “They were meant to be fully funded by 2014 and the National Government at the time”—that is 1998—“picked the period of 15 years out of the hat. The number was arbitrary. It could have been 10 years it could have been 20 years but National said that it would split the difference and make it 15 years.” That is nonsense. I worked for the corporation at that time; I know the people who made those calculations. The calculations were very very soundly based they were scientific and they were intended not to impose an undue burden on employers and other levy payers while we moved towards full funding. Guess what? The scheme was working. 
I have shown the graph I have here to members in the Chamber; I want to show it again because it is really important. This shows the path that the scheme from 1999 to 2014 would have taken to get to the point when 100 percent of the assets matched the liabilities. Not only were we on track until about 5 years ago but we were actually ahead of the game. The red line shows the actual proportion of assets to liabilities against where we would have needed to get to to get to 100 percent by 2014. We were ahead of the game. But it is pretty easy to see where the downturn came in. Was the downturn in 2009 when we had the largest recession in 80 years? No. Was it in 2008 when we had the wobbles and went into what Mr Cullen called a technical recession? Was it in 2007 when things were not great but also not bad? Actually the downturn when we were at 70 percent and then tanked was in 2006. It was at a time when the rates of return on the corporation’s investments and on the sharemarket generally were at a really really good rate. 
So let us not pretend that being thrown off the path to full funding in 2014 has anything to do with investment returns. Yes we had had problems with investment returns but in my view it had everything to do with sloppy management and oversight at a policy level which allowed the corporation to take its eye off the rehabilitation ball and the finance-change deniers on the other side of the Chamber to think there did not need to be any fiscal constraints—the come-one come-all policy. 
I wonder what those 42000 people who were callously thrown off district health board waiting lists thought they would do to get their surgery and their hearing aids. Well I know what they did. They went back to their general practitioners faced with absolutely impossible odds. They had a craps-shoot with the corporation and some of them won. Why did they win? Private insurers said that the corporation had to give a “decline” letter before the private insurer would pay for their surgery. What happened? Surgeons would put the application to the corporation and the corporation would accept it. Why? That was the culture that was set up. But there needs to be more fiscal constraint and I think the Opposition supports the move to extend full funding. I know that Opposition members do not agree with why and that they will still come up with that trumped-up privatisation agenda that I know the Minister will refute soundly in this Committee stage. But I would still like a member for Labour from the other side of the Chamber to take a call and say “We support full funding and here’s why.” because I do not think we have any notion of whether they do or do not.