Hague Kevin: Urgent Debates Declined — Skycity Convention Centre—Inquiry into Expressions of Interest Process; Urgent Debates — Accident Compensation Corporation—Resignations 
Text is incorporated into the Bound Volume 
Hague Kevin: Urgent Debates Declined — Skycity Convention Centre—Inquiry into Expressions of Interest Process; Urgent Debates — Accident Compensation Corporation—Resignations 
[Sitting date: 13 June 2012. Volume:680;Page:2912. Text is incorporated into the Bound Volume.] 
KEVIN HAGUE (Green) 
: 
 I want to begin by referencing that great New Zealander Sir Owen Woodhouse and the amazing piece of work that he did in the 1960s and early 1970s on behalf of New Zealanders in which he persuaded New Zealanders in fact to engage in a great social contract. It was a social contract where we gave away our right to sue—and thus gave away the expensive inefficient and haphazard basis of the harum-scarum of legal process as a means of trying to achieve redress in accident compensation—in exchange for our accident compensation scheme. It is a scheme based on principles of community responsibility comprehensive entitlement complete rehabilitation real compensation and administrative efficiency. That is the social contract that was engaged in between the State and New Zealanders.  
I mention those principles not as a point of mere historical interest but because in fact that social contract still exists and New Zealanders expect rightfully that it will be honoured by the State in the form of the accident compensation scheme. This is not just some theoretical construct because indeed the Accident Compensation Act that implements the Accident Compensation Corporation lists the purpose of the Act. I will give just the first part of it. The purpose of ACC “is to enhance the public good and reinforce the social contract represented by the first accident compensation scheme …”. The Woodhouse principles are not some historical curiosity. They are indeed part of the current accident compensation scheme and they deserve to be honoured.  
ACC over its history since that time has been through phases of good and bad. I have to say sadly that in recent years it has mostly been bad. We have seen progressive erosion of entitlements so that the comprehensive entitlement that was set out in its social contract has been eroded. We have seen the unfortunate experiment of competition in the work account—and thankfully its reversal. We have seen the introduction of future funding and that is something that the Green Party still opposes. Future funding is funding ACC as if it were an insurance company. It is not. It is a public service and it is a service that ought to be funded in the same way as every other public service on a pay-as-you-go basis.  
The problem with funding it as if it were a private insurance company is that that sets up some of the same drivers that a private insurance company might have. That is how the Hon Dr Nick Smith as the previous Minister and his guy John Judge in 2009 made the extraordinary claims about what a financial mess ACC was—the whole technical insolvent claim about an organisation that at that time had something like $15 billion in reserves— 
Michael Woodhouse 
: And $25 million of obligations. 
KEVIN HAGUE 
: —and an operating surplus of $3.5 billion. They did so on the basis—that Michael Woodhouse is just explaining—of accounting sophistry associated with that future-funding model. But actually for most New Zealanders an organisation that had that level of reserves and investments is not something that is in a disastrous financial state. A return to pay as you go would enable the organisation to greatly reduce those reserves use them for some other meritorious purpose and also reduce levies. That sounds like a good idea to me.  
But in 2009 National—which prior to the 2008 election had been working with the Australian insurance industry on plans for privatisation in accident compensation—brought in the changes that it wanted to do to implement that agenda. That is what this sick culture of disentitlement that I have been talking about actually arises from. Under instructions from Dr Smith and the governance of John Judge the organisation redeveloped its service delivery model away from the Woodhouse principles and away from the purpose in the very Act that it was supposed to work under and instead implemented a series of steps to try to establish that privatisation agenda.  
That is nowhere better illustrated than in the documents that I tabled in the House yesterday from ACC staffers Phil Riley and Denise Cosgrove. They talk about how the organisation had been too focused on client needs; about how it needed to learn from the insurance industry and take on terms like “actuarial release”. What “actuarial release” refers to is the practice of the insurance industry of looking at the claims that cost the most and targeting those for exit. That is what ACC set out to do. That was very neatly illustrated in the  
60 Minutes 
 programme on Sunday in the graph that demonstrated how people with long-term injuries who needed their earnings-related compensation were very aggressively dumped from the accident compensation scheme. Phrases like “low-hanging fruit” used by Riley and Cosgrove to refer to— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order! The member must use the full names— 
Grant Robertson 
: No it’s not a member. 
Hon Ruth Dyson 
: It’s not a member of Parliament. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Sorry my correction. The member will continue.  
KEVIN HAGUE 
: Thank you Mr Assistant Speaker. Indeed they are not members of Parliament and hopefully they never will be. They were using a term like “low-hanging fruit” to refer to those people with long-term injuries whom they were attempting to remove from ACC’s books. That is where these practices come from: this targeting of people with these injuries; the shonky assessments which all members of Parliament will be aware of from correspondence from constituents; these extraordinary breaches of privacy not just once not just twice but again and again and again; and the culture of denial of claims and disentitlement. 
I agree with the comment made by Michelle Boag in that  
60 Minutes 
 programme where she said that the default assumption of ACC has become that the people who are making claims are fraudsters. That has become the default. Although it is true that of course there will always be people who are attempting to rip off the system by and large that is not what people are doing. The scheme should go back to its original Woodhouse principles.  
The Bronwyn Pullar case that we saw illustrated vividly on  
60 Minutes 
 is far from unique and again all members will be aware of it. The only thing that distinguishes that case was that in Bronwyn Pullar we had someone with the personal tenacity resourcefulness and connections to keep on fighting. Because she did that the techniques that ACC has typically used to keep on saying no and keep on denying until people give up actually failed and have been exposed. That is the only reason. ACC is used to getting away with it.  
It is a great institution ACC. It is a great institution that does have a proud history and still—as the Minister for ACC the Hon Judith Collins said—has some good people in it but it is on the wrong path. It has been since 2009. We need to return it to the Woodhouse principles. We need to return it to a culture of good public service and the departure of Nick Smith as Minister the departure of John Judge as chairman and today’s departure of Ralph Stewart as chief executive are necessary steps but insufficient for the purpose.  
I take some heart from the Minister’s commitment to a culture change and an understanding of the total need for an overhaul of those privacy management processes. We will be alongside the Government and giving her some suggestions about the agenda to achieve that. That total culture change is precisely where we need to go and we need to go there now.