Blue Jackie: Questions for Oral Answer — Questions to Ministers 
Blue Jackie: Questions for Oral Answer — Questions to Ministers 
[Volume:674;Page:19944] 
4. 
Dr JACKIE BLUE (National) 
 to the  
Minister for ACC 
: What progress has the Government made in better managing ACC claim costs after they increased from $2.1 billion in 2005/06 to $3.1 billion in 2008/09 and how will these help families and businesses? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 The 50 percent increase in claim costs during the last term of Government was not sustainable. We have since reduced costs by 15 percent effectively reversing the extravagant end of those increases. A good example is the cost of physiotherapy which more than doubled when the previous Government made it free. Reintroducing a part charge has saved $60 million per year. We have got ACC back into surplus enabling levy reductions. For households the saving is $250 a year or $5 per week; for businesses it is a 22 percent reduction in costs or $1100 for the average small business. Reducing the burden of ACC levies by $587 million per year will help the New Zealand economy recover. 
Dr Jackie Blue 
: What success has the Government had in improving ACC rehabilitation rates and how much has this contributed to the turn-round in ACC finances? 
Hon Dr NICK SMITH 
: Income compensation is ACC’s largest cost. Rehabilitation rates declined significantly between 2005 and 2008 leaving thousands more people dependent on ACC. This Government has put a real focus on improving rehabilitation with programmes such as Better at Work. We have 2000 fewer people receiving income compensation as a consequence and that is one of the reasons we have been able to give households and businesses some relief. 
Hon Jim Anderton 
: Can the Minister tell the House which made the larger contribution to the ACC deficit: the 2008 financial crisis or the move by ACC from partial pay-as-you-go to full funding and given that these problems have evened out as they tend to do with long-term investment programmes will he now apologise for using them as an excuse for ACC cutting access to elective surgery for many vulnerable New Zealanders by 200 percent between 2008 and 2010? 
Hon Dr NICK SMITH 
: I make two points in response. The first is that ACC’s audited accounts showed a loss of $2.4 billion in 2007-08 and $4.8 billion in 2008-09. The member asserts that that loss was as a consequence of investments. Not one dollar of the $4.8 billion loss was as a consequence of loss on investments. On elective surgery I say that the costs of elective surgery went from $120 million to $240 million. We have just pulled it back by quite a small amount—[ 
Interruption 
] Can members opposite please explain to me whether there was a more than doubling of accidents that resulted in that more than doubling of costs? Of course there was not; there was simply slack financial management. 
Hon Jim Anderton 
: Did ACC go too far in rejecting claims that it said resulted from age-related injuries even for 15-year-olds and was its excess enthusiasm for significantly declining legitimate claims as shown by increasing ACC losses on appeal a result of his and ACC’s misleading statements about the financial viability of ACC? 
Hon Dr NICK SMITH 
: In the last financial year ACC spent $234 million on elective surgery. That is more than every year bar one in which Labour was in Government. We will do more surgery last year and this year than the average in the term of the previous Government. There will always be a difficult grey area between health and ACC. This Government is absolutely committed to ensuring that there is elective surgery and other rehabilitation for genuine accident victims. There have been some changes in respect of elective surgery through working closely with orthopaedic surgeons and I think that will provide a better service for the public.