Beaumont Carol: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
Beaumont Carol: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
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CAROL BEAUMONT (Labour) 
: 
 If the previous speaker Michael Woodhouse thinks that is hostility he has not seen anything yet. I rise proudly to speak against the Injury Prevention Rehabilitation and Compensation Amendment Bill and to confirm that Labour will be opposing this legislation. The bill is another example of a Government that does not care about the needs of ordinary New Zealanders. 
The changes being proposed in this bill and the other changes being mooted in the area of accident compensation will no doubt increase costs reduce entitlements and move further to an insurance model—I think that the previous speaker made that pretty clear—and away from the principles of our world-class accident compensation scheme. During tough times that will put costs back on to ordinary New Zealanders. It is a cost-shifting exercise and it will be New Zealanders who pay. The costs do not go away; they are merely shifted to the injured person. 
I want to talk about some of the history of accident compensation because a number of people including Mr Peachey have talked about that. I quote Sir Owen Woodhouse who said that accident compensation changes being mooted by the Government were uncaring and predatory and that they breached the principles of the scheme he authored as head of a royal commission in 1967. 
The accident compensation scheme implemented in 1974 was the first comprehensive no-fault accident compensation scheme introduced in any country using the British legal system and it did some very important things. In particular it ended costly legal battles to force employers to pay compensation for work injuries. It also cut administrative costs from about 30 percent in private insurance schemes to 10 percent. There was a very good comment by Tapu Misa in the  
New Zealand Herald 
 recently. She talked about the fact that it is easy forget how revolutionary our accident compensation scheme was and how visionary its architect Sir Owen Woodhouse was. 
It is easy to forget what life was like before April 1974 when the accident compensation scheme was introduced. It was not introduced just by National. It was introduced under a National Government certainly—the Holyoake Government—but it was bipartisan cooperation that led to the introduction of the accident compensation scheme. Sir Owen described the pre-1974 situation as constant litigation and arguments about how an accident should be defined and whether it had arisen in the course of employment. He said that the benefits were “meagre and limited in duration.” and that the process could be very long expensive uncertain and unfair—for example before 1967 only one negligence claim in every 100 was even partially successful. 
I think it is important to recognise that background because I do not believe that the changes in this bill go anywhere near what we will see from this Government. It will do a great deal more than this. So members opposite including the Minister can introduce this bill and say: “We had no choice but to make these changes and anyway they are quite specific and that is it.” but New Zealanders know that that is not it. 
I remind people of the Woodhouse principles because again we have referred to them in this debate. They are very important and I think the real conversation should be about a scheme that meets those principles of community responsibility. It was felt as a matter of national obligation and interest that the community must protect all its citizens. In other words we all reap the benefits of a modern fast-paced industrial society and we should be prepared to pay for the detriments and not leave those who are inevitably injured to struggle on alone. The second principle was comprehensive entitlement—that it should be financed on a uniform method of assessment regardless of the cause that gave rise to the injuries. Complete rehabilitation was another principle and none of us would argue about proper rehabilitation despite the comments from across the House that somehow Labour does not agree with or support rehabilitation. The next principle was that compensation needs to be real compensation. 
Those are very important principles and I want to know what at this stage the Government is doing to justify its moves to privatise increase costs and reduce entitlements. If we look at this bill and the things that have been said since the Government was elected we see a cynical manipulation. It is absolute scaremongering. 
Hon Dr Nick Smith 
: Oh yeah we made up the $2.4 billion last year! 
CAROL BEAUMONT 
: Let me give the Minister some examples. He talked about a very significant blowout in liabilities and that the accident compensation scheme is technically insolvent and going down the gurgler. Let us talk about that a little bit more. What is the definition of insolvency? Insolvency is the inability to pay one’s debts as they fall due. But Dr Nick Smith’s definition of insolvency is “unless the future cost of all existing claims is fully funded by investments set aside for that purpose it is insolvent”. Of course by his definition the accident compensation scheme has been insolvent since the day it started. So the member’s words are a nonsense. 
However Nick Smith is right in saying that Labour agrees with the extension of the period to fully fund residual claims from 2014 to 2019. That is the one thing in this bill that actually makes sense and actually that extension was proposed by the previous Labour Government. We said that it needed to happen. People are not being sucked in by the member’s comments. People are nervous about what is going on and they are starting to get very very angry. 
I quote a couple of media commentators who have been looking at what the Government has said. In the  
New Zealand Herald 
 Brian Fallow writes: “For the Government to wrap legitimate concerns about slippage in ACC’s performance in a whole lot of shrill scaremongering and scapegoating is gratuitous. Indeed it is downright irresponsible when talking about the scheme to use terms like ‘insolvent’ and ‘going down the gurgler’—even if the context is counterfactual—because there are people who are dependent on it to keep body and soul together and will do so for the rest of their days.” 
In the  
Dominion Post 
 Vernon Small writes: “costs are increasing investment returns are down the unfunded liability is swelling and some changes are necessary. But is ACC critically injured? Labour has called the assault on the state injury insurer—an assault coming from everyone in the government from the Prime Minister John Key down—a manufactured crisis and Labour is right.” 
Sadly as I said people are worried and they are asking questions. They are worried about what the Government is proposing to do and there is mounting anger. Over the course of the long weekend I went to a number of events and at every single one of them a range of people asked me what you were doing with accident compensation. 
Mr DEPUTY SPEAKER 
: Order! 
CAROL BEAUMONT 
: Sorry Mr Deputy Speaker not you. Well actually you too but the Government— 
Mr DEPUTY SPEAKER 
: Just stick to the point thank you. 
CAROL BEAUMONT 
: People are concerned about what the Government is doing. People do not trust this Government when it denies its real agenda with accident compensation. The Minister in his first reading speech on this bill said that the Government had no choice and that a small number of specific changes were being made. Sir Roger Douglas said that the bill is just about managing the payout system a little differently. 
But what is the Government really planning? There have been so many flip-flops and changes of mind—it is almost unbelievable. On 8 March for instance Nick Smith said that 2011 was the earliest date the Government would allow private insurers to compete with the Government in this area. On 2 July in response to a question from me he said that it is not intended that the stocktake group will do an investigation into introducing competition into the work account because quite frankly it is not a priority. He said that it is not the area where the scheme needs attention. Today Gerry Brownlee said that every account is in an utter mess. Well which of these is it? 
In relation to the privatisation of accident compensation the Government is talking about competition in the work account. Well that does not fool people any more. People understand that that is code for privatisation. Clearly this bill is the first step to full privatisation and an insurance model. We have all heard about some of the possibilities being considered such as people being required to pay excesses before they get any compensation. It is a slippery slope when we start setting up one group of New Zealanders against another. Now it is motorcyclists. What about extreme sports people or kids playing sport? In Australia children are being denied the right to play sport because their parents cannot afford the levies. Where is the honest conversation with Kiwis over these changes?