Wong Pansy: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Text is incorporated into the Bound Volume 
Wong Pansy: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Sitting date: 29 June 2010. Volume:664;Page:12256. Text is incorporated into the Bound Volume.] 
Hon PANSY WONG (Associate Minister for ACC) 
: 
 The Hon David Parker lives in denial. Let me just take up some of the points he made. Nowhere have I seen in the report back from the Accident Compensation Corporation’s financial review David Parker registering his concern about the $2.7 billion losses of the accident compensation scheme in the years 2007-08 and the $4.8 billion losses in 2008-09. He said that those were manufactured by a National Government. He forgot that those accounts were signed off by the Office of the Controller and Auditor-General. I challenge Labour to write to the Auditor-General’s office and say that it helped to sign off an account that had a manufactured or exaggerated loss in accident compensation. We do not have to take seriously anything that member says because he was wrong. The independent Audit Office signed off last year on the fact that accident compensation had made a loss of $4.8 billion. 
Why did that loss come about? Quite simply some of it was out of the corporation’s control but it was largely due to the incompetent leadership exercised by the Labour Minister for ACC which was in three areas that I will share with everyone. 
First there was an increase in entitlements without any consideration being paid to the impact on levies. I will draw on the example of physiotherapy; I think most people will remember that. In 2004 the claim cost for physiotherapy was only $55 million. By 2008 that cost had gone up to $144 million. If the National Government did not do anything that cost was forecast to increase to $232 million. Why? Once again Labour directed the corporation to provide so-called free physiotherapy. We could see that a lot of clinics had put up signs saying that physiotherapy was free. Well I am afraid nothing is free; someone has to pay for it. 
Second there is the non-earners account. When National came into Government in 2008 the first news that we heard was that the accident compensation scheme needed a top-up; there was a $300 million deficit in that account. The claim costs for the non-earners account had gone up from $600 million in 2004 to $1.2 billion in 2008. 
Third there is good news about the administrative cost of the Accident Compensation Corporation. At the end of this financial year the administrative costs of the corporation are down by 7 percent. So it was not true when the Hon David Parker said that those costs could not be improved. Under good governance and under good leadership they can be improved. They have gone down by 7 percent in the area of international and domestic travel and of taxis and parking. In administration the savings in the head office of corporate overheads has gone into front-line services. 
I have good news for Labour members who keep talking nonsense and saying that the rehabilitation and management of those claims have not improved. One of the biggest problems facing the accident compensation scheme’s $6 billion outstanding liability is related to claims for people who have been on the scheme for 2½ years. What a waste of human resources! 
I am very proud to say that although Labour is in denial we are so proud to have a Minister for ACC the Hon Nick Smith who exercises the leadership that is very much needed in steering the accident compensation scheme. I know that Labour members hate to hear this but a former National Government introduced the accident compensation scheme to New Zealand so we are the very proud party that wants to make sure that any problem caused by Labour will be remedied. We are glad that we have a very capable and able Minister for ACC who has put the accident compensation scheme back on a sound footing and who has made sure that everybody is covered.