Twyford Phil: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeTwyford Phil: 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.]PHIL TWYFORD (Labour—Te Atatū): It is now clear I think that although we have expressed significant reservations principally about Part 1 of this bill we support the content of Part 2 of the bill. I just want to build on Sue Moroney’s comments really that the upshot of Part 2 of this bill supports the argument that we have been making for a long time now that the manufactured crisis in ACC funding that we saw under Nick Smith’s tenure as Minister was a sham. It was a political construct and as a result since the first term of the National Government New Zealanders have been overcharged to a gross extent. We made it very clear—[Interruption]The CHAIRPERSON (Hon Trevor Mallard): Order! I will just ask the member to resume his seat while we deal with this matter.Hon Dr Nick Smith: I raise a point of order Mr Chairperson. I understand that you seek my apology and you have it.The CHAIRPERSON (Hon Trevor Mallard): What I would like you to do now is to withdraw and apologise for the comment that you made as you left the Chamber indicating bias on the part of the Chairperson. The member will do it properly. He knows how to do it.Hon Dr Nick Smith: I withdraw and apologise.The CHAIRPERSON (Hon Trevor Mallard): The member will now leave the Chamber.PHIL TWYFORD: In December 2014 the solvency position of the earners’ account was 129 percent. The solvency position of the work account was 140 percent. But it is important to note that the position with regard to the work account excludes this extraordinary acronym “WRGPDI”—that is work-related gradual process disease and infection claims. As quoted in response to question No. 9 of the annual review of ACC this year the corporation said that the reported measures overstate the solvency position as assets include those work-related gradual process disease and infection claims but the liabilities exclude them and that a better measure of the true solvency position is to include these claims in the liabilities. So for the work account in fact the better figure is 116 percent.Since December 2014 the discount rates fell considerably during January and partially recovered through January. The figures that are available show just how volatile the solvency positions are with regard to discount rates. This bill shows very clearly that the manufactured crisis in ACC funding was a sham—The CHAIRPERSON (Hon Trevor Mallard): Order! I have warned two members previously about sticking to this particular part with one spectacular failure but I am going to warn this member that the second reading has accepted the principle involved here and all that we are discussing now is what is in Part 2. It is very very narrow.PHIL TWYFORD: Just speaking about residual levies what Part 2 does is basically repeal the provisions in relation to residual levies. Prior to 1999 the levies covered only the current costs of a claim and residual levies are required to meet the ongoing costs of earlier injuries. Currently the legislation provides that ACC must continue to collect those residual levies through to 2019 and what Part 2 does is abolish that provision. It means that residual levies can cease to be collected I think 2 years earlier than the original legislation allowed. That is very significant and what it shows as Sue Moroney pointed out is that we have a truly sustainable ACC and the transition from pay as you go to fully funded is in place. It has been successful and the provisions in Part 2 repealing the provisions for residual levies make that very clear.This bill provides for those levies to be discontinued by Order in Council reflecting the fact that residual liabilities will continue to fluctuate as they do and the decision to discontinue will be taken at a time closer to the time when that judgment can be made with much more certainty. The second objective is to ensure that the payment of those levies continues only as long as there are outstanding liabilities to be offset. I think that is pretty much all there is to say about Part 2. The repeal of provisions relating to residual levies is uncontroversial in our view but it is something that it is worth taking satisfaction from as it shows that the process of transition has been successful and that we have a sustainable funding system for ACC.