Fenton Darien: Injury Prevention Rehabilitation and Compensation Amendment Bill — Third Reading 
Fenton Darien: Injury Prevention Rehabilitation and Compensation Amendment Bill — Third Reading 
[Volume:637;Page:7796] 
DARIEN FENTON (Labour) 
: 
 I am pleased to have the opportunity to speak in the third reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill. I thought after the last contribution that we needed a bit of sense in the discussion and a bit of a history lesson. You know unlike the party opposite we actually want to have—and continue to have—a world-leading easy to access no-fault accident compensation scheme. The National Government nearly got away with the destruction of that in the 1990s. 
My perspective—and I am proud of this—is inevitably coloured by the experiences of people and injured workers under the various reforms of the National Government in the 1990s and I have not heard much comment about them. I know that the Opposition does not like us referring to the 1990s but in the absence of any commitments from National—I have not heard any—to maintain the current system of accident compensation and in view of its defence of privatisation that we have heard in this House from members opposite I have no choice but to reflect on the National Government’s past botch-ups. This bill has reminded me just how awful that past was. 
Prior to 1992 New Zealand had an accident compensation scheme that was fundamentally sound and cost-effective. It was held up as a model for other countries to emulate but after National came to power in 1990 Bill Birch—remember him—the then Minister in charge of the accident compensation scheme moved quickly to establish a committee to review the scheme. Interestingly the committee included a former Treasury secretary a former National Party leader and a senior manager from Shell Oil none of whom had had any significant involvement in accident compensation. This committee recommended a four-stage programme towards ultimate privatisation of accident compensation. 
In 1992 the Accident Rehabilitation and Compensation Insurance Act implemented stage one which transferred the cost of workers’ non-work non – motor-vehicle accidents from the employers’ levy to a new levy imposed on workers by way of a payroll tax. Although many campaigned against the 1992 Act the severe negative impact of its provisions particularly on severely injured people galvanised a number of groups into action prior to the 1993 election. This group called the Coalition on Accident Compensation included the New Zealand Council of Trade Unions the Disabled Persons Assembly the Women’s Division Federated Farmers Grey Power and other disability and community organisations. This campaign highlighted the significant number of cases where the injured person had been disadvantaged by the severity and inflexibility of the new approach to accident compensation under National. One such case highlighted how a tetraplegic 13-year-old boy was prevented from moving from hospital to his home because the new regulations denied the Accident Compensation Corporation any discretionary power to contribute to the cost of his necessary home care. 
Dr Jonathan Coleman 
: What’s that got to do with the merging of the accounts? 
DARIEN FENTON 
: I will get there. National made specific commitments during the 1993 and 1996 general elections that accident compensation insurance would not be privatised but it broke that promise—surprise surprise! The Accident Rehabilitation and Insurance Compensation Amendment Bill was introduced into Parliament in September 1998. That bill came about because of major lobbying from the Business Roundtable the Employers Federation and the Insurance Council of New Zealand with lobbyists from Australian insurance companies such as HIH Insurance and FAI working almost full time in Wellington during that period—and it does appear that the Insurance Council was at it again during the last election. 
Dr Jonathan Coleman 
: What about the SFWU? 
DARIEN FENTON 
: That union opposed it in case the member is interested. This bill created a work injury insurance market with compulsory private insurance statutory suspension of the common law right to sue and statutory limits on workers’ entitlements. The bill was promoted as providing choice—and we hear about that quite a lot from the National Opposition when it comes to talking about workers’ rights health and education and other social services. But you know the only choice was for employers who could choose between insurers competing for business. There was no choice for injured workers. Their legal right to sue which New Zealanders had traded off in the social contract in 1974—the enacting of the original accident compensation scheme—remained suspended by law. Workers were dependent on an insurance contract between their employer and an insurer which they were not even party to. 
What happened? Well the inevitable happened. The profit incentives of privatisation changed everything. There were arguments about which workers were covered and how. Workers were caught between one insurer and another because they had two jobs. There were many instances of spurious rejections where workers had to jump through hoops again and again. Many had huge battles getting the insurer to take their claim at all. Frustrated doctors had to deal with a plethora of insurance companies many of whom would not accept injury claims. There was a review process but it was a farce because it was conducted by a person appointed and paid for by the employer’s insurance company. It was a process based on a narrow interpretation of legal issues. People who lost—and it was very hard to win—were forced into the social welfare system but lost money in the change-over period with dreadful stand-downs. Many with injuries that took longer than a couple of weeks to heal were simply sacked and also forced on to the welfare system often with stand-downs and no money to feed their families. The entitlements were miserable injury prevention was not improved and rehabilitation was undermined. Injured workers became angry and depressed. I came across many cases where workers could have been rehabilitated but because of the battle they were having with insurers they simply lost hope. The market approach to injury prevention was based on the claim that employers would respond to the prospect of reduced future premiums by investing in injury prevention and health protection—and are we not hearing that again today? 
Well it did not happen. As I said we still hear arguments about it—that money somehow is a motivator for employers to provide decent prevention and rehabilitation. That ignores the fact that today’s workplaces are very different and the causes of accidents and occupational disease are complex and diverse. We can add to that the changes National made to health and safety laws and other deregulations of the labour market and see that National members created the conditions that not only failed to prevent accidents but allowed them to happen. Shame on them! National took away the right of workers to refuse unsafe work deprived the Occupational Safety and Health Service of resources and prevented workers and their unions from prosecuting unsafe employers. 
Labour has restored a modern social insurance scheme firmly founded on the principles of the Woodhouse commission in 1967 and this bill is part of it. It does seem necessary to explain to some of the members opposite the notion of the social contract—and there has been a lot of derision about those words—that was entered into by the people of New Zealand all those years ago and which New Zealand people still believe in. New Zealanders gave up the right to sue—we have to look only to America to see how good a decision that was—in return for a no-fault accident compensation scheme. Justice Woodhouse described the scheme’s objective as “the restoration of the [injured person] to the fullest physical mental social vocational and economic usefulness of which they are capable.” 
Thank goodness this Labour-led Government has acted to restore that social contract not least because HIH one of the insurance companies that was active in lobbying National for privatisation collapsed not long after in Australia in one of the biggest corporate failures that country had ever seen leaving thousands of workers without protection. Indeed a former Australian Minister of Small Business and Tourism Joe Hockey has repeatedly called for Australia to consider again the New Zealand accident compensation model. New Zealand’s accident compensation scheme has the cheapest cover of schemes in any comparable country in the world. Just across the Tasman employers are paying several times more. 
Demands for reserves to be paid back to employers are ridiculous. This has happened in the past and if members knew their history they would know that it has resulted in the near bankruptcy of the employers’ account. The money is not the employers’ money; it is a payroll tax and workers have shared the burden of that with employers so it does not belong just to employers. 
I used to dread accident compensation claims for workers because they were so hard to resolve under National’s changes. Today electorate office staff tell me that disputes over accident insurance used to be one of the biggest complaints they had during the 1990s. But that has all changed. That simply does not happen these days; the claims are few and far between. The mediation service this Government has introduced has been a resounding success. It enables people to be heard and issues to be resolved in a constructive way. 
This bill fixes an anomaly that needed to be fixed. It also builds on the commitment of this Labour-led Government to restore the social contract New Zealanders entered into in 1974 and have never voted to change. I commend the bill to the House.