Hutchison Paul: Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) — First Reading 
Hutchison Paul: Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) — First Reading 
[Volume:644;Page:13948] 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I am pleased to have the opportunity to speak on the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2). I note there is a stark contrast between the objectives put out in the policy statement of the Government and the purpose described by the parliamentary Bills Digest which was also put out. The Government goes into a long-winded waffle where it says the overall purpose of this bill is to continue the Government’s commitment to a fair and sustainable accident compensation scheme for reducing the incidence and impact of personal injury etc. whereas the parliamentary Bills Digest says the purpose is to amend the Injury Prevention Rehabilitation and Compensation Act 2001.  
There is no doubt that National will not be supporting this bill because we believe it has not been well-thought-out. It blurs the margins between injuries caused by accidents and other medical conditions and it is extremely poorly costed as Pansy Wong pointed out earlier and as I will do shortly. The Labour Government never managed to understand that when the accident compensation scheme came into being in the late 1970s along with the substantial benefits gained—and I must say it came into being under a National Government—New Zealanders also lost the very important right to sue. Although there is absolutely no political inclination to change that situation it is important to emphasise that New Zealanders made a substantial trade-off when they gave up that right to sue. 
Tariana Turia 
: So they should. 
Dr PAUL HUTCHISON 
: I agree with Tariana Turia. I do absolutely accept that. But we must not underestimate how important that loss of the right to sue is. For instance I can give an example of a young man with a family of three down in Queenstown who had a traumatic incident that has left him a paraplegic. He had just started his business so all his money had gone into that. He was therefore on a low income and for the rest of his life at 80 percent of that income he will not have the ability to be able to provide well for his young family. If he had the right to sue he would have indeed received a substantial claim because the way that it happened the perpetrator was undoubtedly in the wrong. We must not underestimate just what has been lost and therefore it is absolutely important that we make the scheme work as well as possible.  
There are several areas in this amendment bill that are particularly problematic to National. One of them is associated with the costings and the poor way in which the Government has gone about sorting out the costings related to mental harm from trauma at work and the inconsistency as again pointed out by Pansy Wong that there is no provision for mental-harm compensation outside of work. It just seems extraordinary.  
The other area of course is the way in which not only injuries but also gradual process conditions can be added to schedule 2 of the Injury Prevention Rehabilitation and Compensation Act 2001 which causes further blurring with other diseases and conditions. I think it is important to point out the situation with schedule 2 which does indeed give far wider power to broaden the scope without the scrutiny of Parliament. It is a very very much wider power and again as Pansy Wong pointed out this is being introduced in a very devious way and not in a transparent way. If we look at clause 30 we see that section 336(1) is amended and paragraph (a) is repealed and substituted with “(a) adding or varying the description of a personal injury together with the corresponding—(i) agents dusts compounds substances radiation or things (as the case may be) and if appropriate the relevant level or extent of exposure to such agents dusts compounds substances radiation or things; or (ii) occupations industries or processes; or”.  
That indeed leaves a very wide scope with which a Government can by Order in Council introduce a whole series of things. We know that the aim of the Labour Party has been for a long time to equate disease with accidents where New Zealanders have given up the right to sue. If indeed this Labour Government had raised New Zealand from the lower half of the OECD into the upper half of the OECD maybe it might be a reality to afford these things. But undoubtedly we have to spend every dollar wisely.  
It is more than a coincidence that today at Auckland University there is a forum on accident compensation. It is marking and acknowledging the 40 years since Sir Owen Woodhouse outlined this plan. I think it is important once again to reiterate the five principles that he talked about: community responsibility comprehensive entitlement complete rehabilitation real compensation and administrative efficiency which is one of the things that we are concerned about. In an article in the  
New Zealand Herald  
the other day written by Associate Professor Rosemary Tobin Susan St John and Dr Grant Duncan they say administrative efficiency is achieved in a collective scheme whose costs of administration are far lower than any private insurance arrangement could be. What absolute rubbish this is because we know that the partnership programme and third party administrators have managed to deliver these services far more efficiently and effectively than the grand monopoly of the ACC itself. I think it is very important to point that out.  
About a year ago when the issue of expanding the schedule of gradual disease process was being brought up Simon Porter who is a senior solicitor with the employment team at Bell Gully noted that the biggest challenge with these diseases is in determining whether the onset was work-related or caused by other outside factors. He said that this is certainly Business New Zealand’s main concern and mentioned that chief executive Phil O’Reilly has commented that although he does not object to the expansion of the list per se he sees real problems with some of the proposed conditions. In particular he questions how accurately hearing loss one of the proposed new conditions could be diagnosed as being caused by employment.  
But I do want to talk just for a moment about the regulatory impact statement that this Government has brought out. It is way way out of reality—just have a look at the variability. In fact we can see that the Government is costing vocational rehabilitation at about $1.7 million and the upper age-limit for rehabilitation at about $1.17 million. I cannot for one moment accept that that is anywhere near realistic. But then we go to the changes to weekly compensation packages and the variations go from $63 million to $138.6 million. That is a huge variation. How on earth does this Labour Government expect to gain any credibility whatsoever when it costs something as important as this so pathetically? Then of course the range for mental injury cover caused by work-related trauma went from $7.6 million to $72.2 million per year which is almost 700 percent. That is absolutely pathetic in terms of once again the Labour Government failing to do its homework on such an important issue. The Government says that the central cost of the cover for work-related gradual process is in the order of $11.835 million but of course that does not cover all the new claims that would be accepted. The Government merely says that claims that have previously been declined are not likely to have an impact as the reasons for their declination will not have changed.  
This amendment bill appears to be recklessly irresponsible by the Labour Government in several areas. The Government simply has not done its homework to find accurate costings of what it is proposing. As the Ministerial Advisory Panel on Work Related Gradual Process Disease or Infection pointed out it recognises that further research was required to fully calculate the cost implications of the advisory panel’s recommendations.