Williams Poto: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeWilliams Poto: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — In Committee[Sitting date: 22 September 2015. Volume:709;Page:6839. Text is incorporated into the Bound Volume.]POTO WILLIAMS (Labour—Christchurch East): I too want to go over some history and some old ground just to remind the Minister for ACC that yes we are transitioning from one accounting model one reporting model to another model. Clause 4 really talks about moving to the new fully funded operation. I also want to remind the Minister that we are talking about a system that has been more than fully funded. We are really well aware that many of the ACC accounts have been oversubscribed. We too are looking to ensure that the bill does live up to its transparency title and will provide some assurance and some confidence to the public of New Zealand that ACC will be providing what they need to plus some buffer into the ACC accounts and will not be supporting what is clearly not a transparent action of supporting this Government to get into surplus.I want to turn to three important parts in Part 1: the principles of financial responsibility the funding policy statement and the consultation process and any amendments to the funding policy statement. The principles of course—new section 166A(1) in clause 5 states: “The cost of all claims under the levied Accounts are to be fully funded by meeting the outstanding claims liability in respect of the claims by offsetting an adequate level of assets to fund the cost of those claims.” That is very sensible ensuring that there are sufficient funds to pay for ACC costs as they occur to those people who may have accidents and need to have their medical costs and ongoing costs covered. Members—in particular electorate members—have constituents who come and see them on a regular basis to talk about ACC claims and the like. Often I wonder whether sometimes we do not take full cognisance of future ACC liabilities in that our populations do get older and sometimes their ACC concerns their health concerns and their accident concerns actually end up costing more than we have potentially set aside.New section 166A(2) in clause 5 states: “When making recommendations in respect of regulations made under section 329 setting levies the Minister must have regard to the following principles:”. That phrase “must have regard” of course is an important one because originally I understand the bill said “must be set in accordance with the following principles:”. We are talking about two different levels of requirement. We are concerned about the watering down of this particular part of the bill. The words “must have regard” of course do take those things into account but they do not have the same level of weight as “must be set in accordance with the following principles:”. So we are concerned about that.New section 166B talks about the funding policy statement. It is clear that the funding policy statement must be set based on the principles of financial responsibility. But the funding policy statement must also specify “a target level or band for the funding of each Account;”. In that process we are looking at the consultation process that the Minister must undergo to ensure that the Minister has sufficient information to be able to be comfortable with the target levels the band for each funding account. As such the Minister is able to consult persons and organisations. But the Minister must also have the ability to determine the amount within the band for each funding account in terms of ensuring that there are no huge changes in levies that could be set.One of the issues that many businesses have talked to us about is that there is a potential for levies to vary hugely over time. It makes it very difficult for businesses to set their budgets and be able to determine their costs particularly their costs of employment out for any significant period of time. So we would want to support ensuring that there are very limited variances in those levies and the ability to do that would mean that the Minister may take advice from ACC and may need to take regard of those ongoing concerns.Also within the funding policy statement we are very cognisant of the fact that we would not want there to be an oversubscription to those particular accounts. My colleague Iain Lees-Galloway did talk about potentially some accounts being oversubscribed to about 140 percent which clearly demonstrates that those basic principles of financial responsibility have not necessarily been applied and the consultation process has not been applied adequately. So we are really confident that used correctly the principles in the consultation and the funding policy will actually take care of ensuring that we do not oversubscribe by more than 120 percent.Just finally I do want to talk about what is a really important aspect of this which is determining what is “public good” and in the “public interest”. With public interest Supplementary Order Paper 123 which has been put up by Ms Moroney—we want to ensure that public interest takes into full regard the purpose of reducing accidents and injuries and in particular having regard for the interests of taxpayers levy payers claimants and potential claimants. It seems inordinately sensible to have that feature as part of this bill and I am hopeful that we can get some support for this Supplementary Order Paper to ensure that that happens. It states: “ ‘Public good’ means the public interest with regard to reducing injury and accidents.” and at the end of the day that is what accident compensation should be about. It should be about the prevention of accidents. It should not be about our wanting to build up funds—it is more about prevention. It should be about prevention rather than about setting aside money for accidents when really it is absolutely far better in the country’s interest to reduce that cost to us. Thank you.