Boscawen John: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee Speaker Recalled 
Boscawen John: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee Speaker Recalled 
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JOHN BOSCAWEN (ACT) 
: 
 We started this debate this morning with Darren Hughes asking the question about the fact that surely we are paying more and getting less with the Injury Prevention Rehabilitation and Compensation Amendment Bill. I wonder why we are paying more. That surely is the question. Why are we paying more? I do not know how closely Darren Hughes has listened to this debate. It is pretty obvious that Lynne Pillay has not listened to this debate because she criticised the Maori Party for supporting this bill and the Maori Party made it very clear that it was not supporting the second reading. In fact the Maori Party voted against the second reading and will not be voting for this bill. So Lynne Pillay has not been listening to this debate. 
Let us now address the question that Darren Hughes asked. He said we are paying more and getting less. Well why are we paying more? We had claims in 2005 totalling $2.2 billion. In the space of 4 years the claims paid by the Accident Compensation Corporation (ACC) have gone from $2.2 billion to $3.6 billion which is a 57 percent increase over 4 years. That is simply not sustainable. Darren Hughes may think that money comes from fresh air but if the claims keep increasing at 12 percent per annum indefinitely of course we will pay more. Someone has got to pay. Lynne Pillay said that the accident compensation scheme is not broke and that levies do not need to rise. Maybe we will get to a state where levies will not rise but we certainly will not get to that state where levies do not rise if we keep paying claims that are increasing by 12 percent per annum. 
I believe that one of the major contributions to this debate was made by Maryan Street when she said during the second reading that medical science has advanced so much since the accident compensation scheme was passed and brought into being in the early 1970s that people who would routinely have died as a result of accidents now live on. That is one of the major reasons that we have a blowout in accident compensation. It is not the only reason but it is a contributing reason. People who would have died now live on but they live on as paraplegics as tetraplegics and the cost of keeping those people alive can run into many hundreds of thousands of dollars and even into many millions of dollars. 
Grant Robertson 
: What is the member suggesting should happen to those people? 
JOHN BOSCAWEN 
: I will listen to Mr Robertson. What I am suggesting is those people should be allowed to live on—absolutely. 
Hon Ruth Dyson 
: Phew. How very generous of you! 
JOHN BOSCAWEN 
: It has to be paid for I say to Ruth Dyson. My sister was involved in a fatal car accident 30 years ago and she lived for 53 hours. One of the hardest decisions my mother had to make was to allow her life support system to be turned off. She would not have had the quality of life that she could have had with medical science today. With the advances in medical science if that accident had happened today she might have been able to live on. My mother would have wanted her to live on. The wonderful thing about accident compensation is that the advances in medical science would have enabled her to live on but it comes at a very significant cost. We need to address that issue. We have people living today who are tetraplegics and paraplegics and the cost of their living on is many millions of dollars. Life is precious. Life is absolutely precious and if those people can live on with any semblance of a normal life we absolutely need to allow that to happen and that is one of the beauties of medical science. 
But we need to recognise that that has a huge impact on claims of accident compensation. That is one of the contributing reasons why we have calculated liabilities of accident compensation of some $23 billion. If a person has a fatal accident—let us say in 1995 which is 15 years ago—and they become a tetraplegic they can live on. But they require round-the-clock care 24 hours a day. 
So what happens is that there is a cost. An actuary can calculate the cost of a person living on from say the age of 25 for a further 40 years. It may come to $2 million $3 million $4 million or $5 million. That actuarial calculation is done for all other claimants and I think the current valuation of ACC’s liabilities is some $23 billion. Lynne Pillay’s contribution to the debate was saying that because we have assets of $11 billion ACC is not broke. Well if the forecast costs of looking after and maintaining the life support systems that keep those people alive supporting them and giving them income are some $23 billion ACC is currently running at a deficit of $12 billion. There is a cost. 
I find it very interesting that when it comes to superannuation Labour criticised National’s decision not to continue pre-funding New Zealand superannuation. We have a New Zealand Superannuation Fund of some $12 billion. I do not hear Labour saying that because we have $12 billion in reserve in the Superannuation Fund we do not have to contribute—no. In the case of ACC it is exactly the same. We have assets of $11 billion liabilities of $23 billion and a $12 billion deficit. We need to wake up to the fact that in the time going on 40 years since accident compensation was adopted there have been advances in medical science and that is fantastic. It is fantastic that there have been advances in science so young people like my sister—who was not able to live 30 years ago—can live today and their families can have them around but there has to be a cost. 
We need to recognise that there have been substantial extensions to the accident compensation scheme. Clearly the country cannot afford it. We cannot carry on indefinitely increasing claims by 12 percent per annum year after year after year. This Government is trying to put a lid on that and recognise that claims have blown out. What do we do? We introduce competition choice and ways that we can reduce the number of injuries occurring. We need to improve rehabilitation rates. This is not a simple issue but the Government has woken up to the reality that we cannot keep increasing claimants by 12 percent per annum at fives times the rate of inflation year after year. Thank you.