Doocey MattACCIDENT COMPENSATION (INTEREST ON INSTALMENT PLANS) AMENDMENT BILLFirst ReadingHon MATT DOOCEY (Minister for ACC): I present a legislative statement on the Accident Compensation (Interest on Instalment Plans) Amendment Bill. ASSISTANT SPEAKER (Maureen Pugh): That legislative statement is published under the authority of the House and can be found on Parliament's website.Hon MATT DOOCEY: I move That the Accident Compensation (Interest on Instalment Plans) Amendment Bill be now read a first time.The Accident Compensation (Interest on Instalment Plans) Amendment Bill makes it explicit that ACC can charge debit interest where levies are paid by instalments. Some businesses choose to pay their ACC levies in instalments. ACC offers a range of instalment plan options and is able to charge the businesses that use them an administration fee. Being able to pay levies in instalments is a valuable option for many businesses and self-employed levy payers especially those that may otherwise struggle to pay their levy invoice in a single payment on the due date. Right now businesses that use 10-month instalment plans are charged debit interest as the administration fee. The practice dates back to at least 2004.ACC has charged debit interest on the understanding that the Accident Compensation Act 2001 allowed it to do so. The Government considers it not clearly allowed for in the Act as part of the administration fee. While other parts of the Act could be used to support the practice that too is uncertain. The practice is therefore vulnerable to legal challenge from levy payers have paid debit interest in the past.ACC charging businesses debit interests when they use an instalment plan is the reasonable and prudent thing to do. By allowing businesses to pay their levies in instalments ACC is foregoing any interest it would have earned from investing the funds. If it could not charge debit interest on instalments this would effectively be a cost to ACC. It would also mean that businesses paying their levies in a single payment on the due date may be subsidising those businesses paying in instalments. This would be unfair for those paying their levies in a lump sum on the due date. Debit interest also disincentivises opting for payment by instalments as a cheaper source of finance.Being able to pay levies in instalments is a valued and well-used option for businesses that might otherwise struggle to pay the levy invoice in a single payment on the due date. To support this further the amendment bill will enable ACC to waive debit interest charges under certain circumstances set out in regulations. I believe we need to ensure businesses and self-employed people continue to access this instalment plan service when they need to particularly as alternative sources of borrowing would cost them more. There is therefore a need for clarity in the Act to ensure that the charging of debit interest is lawful. The amendment bill will provide that clarity.This Amendment Bill will explicitly allow for ACC's charging of debit interest on instalment payments for the work account in the Act. ACC would also be able to charge debit interest on any other instalment plan options it offers in the future. This would initially be the current rate of 2.73 percent for 10 months and 0 for three- and six-month plans. The rate would then be varied through amendments to regulations as necessary to reflect changes in interest rates.The amendment bill also validates ACC's past practice of charging debit interest. This is to contain the risk of a legal challenge from levy payers who have paid debit interest in the past. ACC acted reasonably in charging the interest and it would likely be operationally very difficult to refund the debit interest charged over the extended time span of 20 years or more. The bill makes sure that ACC can continue to apply this reasonable charge and protects ACC from challenge for having charged debit interest in the past.In summary this bill makes important changes to ACC that will ensure that ACC is not disadvantaged for offering options that make it easier for some businesses to pay their levies that there is fairness between levy payers paying in lump sums and those paying in instalments and that ACC is protected from legal challenge for charging debit interest on instalment plans. Thank you Madam Speaker I commend this bill to the House.