Moroney Sue: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeMoroney Sue: Oral Questions — Questions to Ministers[Sitting date: 10 March 2015. Volume:703;Page:2042. Text is incorporated into the Bound Volume.]12.SUE MORONEY (Labour) to the Minister for ACC: What is the purpose of the Work and Earners’ levies charged by ACC?Hon NIKKI KAYE (Minister for ACC): The work levy funds entitlements under the Accident Compensation Act to workers as well as the self-employed for work-related personal injuries. The earners levy funds entitlements under the Act for earners who suffer a non-work personal injury. It also funds entitlements for injuries suffered by a person through receiving treatment from a registered health professional—i.e. treatment injuries.Sue Moroney: Why is she preparing to overcharge businesses and their staff up to $400 million more this coming financial year than what the northern branch of the Employers and Manufacturers Association independent analysts Infometrics and even her own officials say is needed to fully fund the lifetime costs of accidents and injuries?Hon NIKKI KAYE: Firstly the member cannot predict what I am preparing for. We have a process under the legislation that enables consultation with a range of parties around potential levy reductions. But the second point that I would make—and the second point is very important for the Labour Party members—is that as the Deputy Prime Minister has already highlighted these accounts can shift quite significantly on a range of factors including the discount rate including the number of people who are in work and including the claims information that comes in. It is my understanding that the latest accounts of ACC up to 31 December should be published probably in the next week.Sue Moroney: Is she aware that ACC officials have already factored in funding certainty sustainability and levy stability into their equation before recommending the lower levy rates that her Government has rejected and that Infometrics in its independent report has allowed for a 17 percent buffer over and above full funding of injuries in determining that employers and workers are being overcharged $350 million a year in ACC levies?Hon NIKKI KAYE: It is really important to make the point that actually the mandate that the ACC board has in terms of recommendations to Cabinet is different from the wider considerations that we take into account—that is for instance public interest. It is a number of other things as has been mentioned in this House. The second point that I would make is that the member and the Labour Party have not actually published that Infometrics report. They have published an executive summary. I would like to see that full report because my understanding is that there are a number of people saying there could be significant flaws in it. The first flaw that we are looking at is whether gradual process has been taken into account in their calculations. So I do want to see the full report. But the major point is this: we have delivered $1.5 billion of levy reductions. We said at the election there will be further levy reductions but we have to take a long-term view because if we do not we end up in the situation that Labour left us in which was a $5 billion hole in ACC accounts.Sue Moroney: Why is she following the false lines used by discredited Minister for ACC Nick Smith in an attempt to cover up her Government’s ACC rort—she just used them—when even Judith Collins when she was the Minister for ACC admitted that the higher levies are “because we need to get to surplus and we’re very honest about that” and Judith Collins said that when she spoke to the New Zealand Herald just last year?Hon NIKKI KAYE: The first point is as has been said by a number of Ministers in this House and a number of my colleagues that that is one factor. But let me tell you the other factors—and you should be looking at this when you see the latest accounts from ACC. No. 1 is the discount rate. That can affect our accounts by hundreds of millions of dollars. The second thing that needs to be taken into account is the number of people in work. The third thing that needs to be taken into account is the overall claims that are coming in. These are major factors that can affect the ACC accounts. The second point that I would make for the member and that I would continue to make for the member is that if the Labour Party wants to tie its ACC policy to one point in time then we will end up in a situation that history left us in with a $5 billion hole. Our view is that we need to take a much longer-term view and take into account those longer-term shifts that are happening and the volatility in the accounts.Sue Moroney: Does she have any legal authority as the Minister for ACC to strike ACC levies for any other reason than the full funding of accidents and injuries; if she believes she does can she please point the House to that legal authority?Hon NIKKI KAYE: There are several areas of the legislation that cover how we set levies but there are also things that we need to take into account. The first point is that there is a process around levy setting. The board recommends to the Minister and then the Minister takes that to Cabinet which has the overall discretion. The second point and the provision that I would point the member to is section 6 of the Accident Compensation Act. This is a point that Labour does not get. The fundamental thing that happens here if you take a Labour policy is that you get volatility and not certainty for businesses if you do not take into account section 6 of the Accident Compensation Act which is about stability—it is about stability and not having a yo-yo effect in terms of—Mr SPEAKER: Order! The answer is quite long enough.Sue Moroney: I raise a point of order Mr Speaker. With regard to that answer the question was straightforward. It was about her legal authority to strike levies for any other reason than the reason she just outlined. I was asking for other reasons.Hon NIKKI KAYE: Section 6.Sue Moroney: Section 6 talks about—Mr SPEAKER: The question has been addressed.