Parker David: Questions for Oral Answer — Questions to Ministers 
Parker David: Questions for Oral Answer — Questions to Ministers 
[Volume:658;Page:7418] 
6.  
Hon DAVID PARKER (Labour) 
 to the  
Minister for ACC 
: Has he received the Treasury memo to the Hon Bill English entitled “Work Account Contestability” which states it is “Not clear that levies are excessive—competition in 1998 did reduce levies but could have been firms loss-leading to establish market share”? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 Yes. But the memo also states that contestability has advantages with gains through innovation the sharing of gains between purchasers and providers the removal of politics from the levy setting and the use of market mechanisms to improve the accident compensation scheme’s performance. Treasury concluded that contestability was worth exploring further. 
Hon David Parker 
: Does he agree with the architect of accident compensation Sir Owen Woodhouse who when asked whether private insurers will be able to provide the same cover for lower premiums than those of the scheme administered by the Accident Compensation Corporation (ACC) said: “I’m not merely a sceptic … It cannot happen.”? 
Hon Dr NICK SMITH 
: The Government has committed to exploring the option of the private sector being able to provide services in the work account. I am very surprised that members opposite are so close-minded that they will not allow even a stocktake led by one of their former colleagues David Caygill to do work in this important area. 
Hon David Parker 
: Why does the Minister continue undermining the accident compensation scheme when he ought to be honouring the social contract that is its foundation rather than grooming it for sale to foreign insurance companies and leading New Zealand down the path of an American-style medical misadventure system? 
Hon Dr NICK SMITH 
: Both I and the Prime Minister have made it abundantly plain that ACC will remain a publicly owned provider of services. The debate here is whether employers should be able to take out accident insurance with other companies and I am surprised that members opposite have become so opposed to that notion. 
Aaron Gilmore 
: Does the existing accident compensation system enable private sector participation and profits by overseas companies from accident management? 
Hon Dr NICK SMITH 
: It may come as a surprise to members opposite but yes it does. Twenty-three percent of employees in New Zealand are covered under accredited employer schemes that are run by companies like Southern Cross Gallagher Bassett Aon and Wellnz which are both American and Australian - owned. I am also surprised that Labour now considers profit to be some sort of dirty word. I fear for the New Zealand economy if Labour ever gets on the Treasury benches again. 
Hon David Parker 
: Does the Minister think ordinary New Zealanders like motorcyclists will believe him or Sir Owen Woodhouse who says that accident compensation is not in a crisis given that what was collected last year in levies was $1 billion more than was spent and it also has $11 billion of assets? 
Hon Dr NICK SMITH 
: It may be that for members opposite an organisation that lost $4.8 billion in the last year $2.4 billion in the year before— 
Hon Members 
: No! 
Hon Dr NICK SMITH 
: Members opposite say “No!”. Whose signature is on those annual accounts? Hon Peter Neilson the deputy chairman of ACC. Are members opposite saying that accounts that have been approved by the auditors in the Audit Office by PricewaterhouseCoopers and by Infinity are all wrong? What they show is that accident compensation is in a serious financial pickle and this Government is having to clean up an awful mess arising from the financial mismanagement of accident compensation by members opposite. 
Hon David Parker 
: Why does he not tell New Zealanders that under his plan services will be cut losses socialised and profits privatised to the advantage of foreign-owned insurance firms? 
Hon Dr NICK SMITH 
: The member should listen to my answers because the truth is that already we have Southern Cross Aon Gallagher Bassett and Wellnz all companies that are in it not because they love New Zealand but because they make a profit under a scheme that was approved by members opposite. That might be news to them but we are saying that we think there are further opportunities for the private sector to make a contribution to efficient and fair accident compensation in New Zealand. 
Hon David Parker 
: I raise a point of order Mr Speaker. I am not sure whether the Minister was quoting from an official document when he said there were some private insurers in New Zealand providing insurance; if he was I ask him to table the document because I have never— 
Mr SPEAKER 
: The member has made a fair point of order. Was the Minister quoting from an official document? He was not.