Woodhouse Michael: General Debate 
Woodhouse Michael: General Debate 
[Volume:652;Page:1640] 
MICHAEL WOODHOUSE (National) 
: 
 I am concerned about the health of the previous member for Otaki Darren Hughes; I fear that one day in this House he will utter so many words without taking a breath that he will fall in a hypoxic heap on the ground. So it is a good thing that we have a couple of doctors and the odd nurse in here to resuscitate the gasping member. I guess their enthusiasm for doing so would be a little higher if what was coming out of his mouth was anything like common sense. Instead we continue to hear the same old rhetoric: the previous Government did a wonderful job everything was well until 8 November and it is all dark now. Frankly no one believes that. 
I had to check the  
Oxford Dictionary 
 definition of “unfunded”. I even took the dictionary from the Noes lobby just in case it was different from the one in the Ayes lobby. “Unfunded” means “the absence of a stock of money”. That is what we had from the Labour Government—promise after promise but with no funding. A billion dollars was promised for home insulation but it just happened to be the same billion dollars that was committed from dividends for renewable energy sources. There was $750 million committed for a universal student allowance. We heard this morning that $3 million was promised to upgrade the train stock. And on and on it goes. 
That promised funding does not account for the biggest rort—that is the concerning revelations around the Accident Compensation Corporation (ACC). We now know that the previous Minister of Finance and the previous Minister for ACC knew about that issue but did not include it in the Pre-election Economic and Fiscal Update. That was a breach of the Public Finance Act. The numbers we are hearing just beggar belief: an increase in levies of $2400 per family per year due to a $15.6 billion increase in ACC’s liabilities. Back when we moved to full funding the liability was $4 billion and despite employers pouring billions and billions of dollars through levies into the residual claims account the figure has increased to around $10 billion which nearly matches the Cullen fund. Why? There are very good reasons. The interest rates have changed which has increased the unfunded liability but the fact is it should never have been as high as it was. 
The real reasons include the management of the scheme. We have seen the steady creep in the criteria for the acceptance of claims and the level of entitlements paid to those claimants. For example when the changes to medical misadventure—now known as treatment injury—were introduced in 2004 treatment providers warned the Minister that she was opening a financial Pandora’s box; the estimate of costs nevertheless was a paltry $8.7 million a year. What do we have now? The cost is about $84 million a year and climbing. We heard David Parker talk about the unfunded liability as a percentage of the total scheme cost. Well the fact is that levy payers do not pay in percentages; they pay in dollars—$2400 per family per year. Would this levy increase be any good if claim performance had improved? Absolutely but what have we seen? Year on year in every fund claims have increased by around 4 to 5 percent per annum. Scheme duration has been slowly dropping so that there are increases in the number of people on long-term claims. 
The fact is this cannot continue. The boundaries around ACC have to be reduced. I look forward to working with a Government that gets real about the financial costs of the policies that are set sets the boundaries around them and acts prudently and responsibly. Thank you.