Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
[Volume:607;Page:5049] 
Injury Prevention Rehabilitation and Compensation Amendment Bill 
First Reading 
Hon RUTH DYSON (Minister for ACC) 
: 
 I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill be now read a first time. 
 The primary purpose of this bill is to establish an Accident Compensation Corporation petrol levy. I intend to refer it at the appropriate time to the Transport and Industrial Relations Committee. Previously an Accident Compensation Corporation amount was collected alongside the petrol excise duty but this was not an Accident Compensation Corporation levy. It was also not possible to change the petrol amount without either making legislative amendments to the Customs and Excise Act 1996 or affecting Crown revenue. This bill will enable changes to the rate of the petrol levy without legislative amendment. The Accident Compensation Corporation motor vehicle account covers the costs of all motor vehicle - related injuries. The motor vehicle account has recently faced a significant increase in costs. There is a legal requirement to collect enough levy to fully fund the motor vehicle account. 
The increases have resulted primarily from improved estimates of long-term rehabilitation costs for seriously injured claimants and underlying cost increases. The estimates were improved as a result of isolating and better understanding the rehabilitation costs for seriously injured claimants. The motor vehicle account has the highest proportion of serious injuries of all the Accident Compensation Corporation accounts. The improved estimates and underlying cost increases therefore affect the motor vehicle account disproportionately more than the other Accident Compensation Corporation accounts. 
The Act focuses on rehabilitation it aims to restore to the maximum extent practicable the health independence and participation of claimants including those who are injured in motor vehicle accidents. Increasing costs in the account particularly in relation to rehabilitation means that the motor vehicle account is in deficit in relation to future liabilities from past injuries. 
Our Government is working towards keeping costs of motor vehicle accidents down. We have developed the New Zealand injury prevention strategy which includes reducing motor vehicle injuries as a priority. We have also developed the New Zealand transport strategy which again has safety as a focus. 
The Government considered options of the best way of funding the Accident Compensation Corporation motor vehicle account. In recent years most increases in the motor vehicle account costs have been absorbed into the annual vehicle-licensing fee. The cost of vehicle licensing has increased to a point where there may be adverse social impacts. Some people had difficulty paying the licensing fee because it was a high one-off cost. A small number of people have not been licensing their vehicles at all. Having unlicensed vehicles on the road is not consistent with decreasing motor vehicle accident rates. 
 The Government wants transport to be affordable for all New Zealanders and we want vehicles to be safe on our roads. The Accident Compensation Corporation consulted widely on the options for Accident Compensation Corporation motor vehicle account funding. Many New Zealanders indicated they would prefer to absorb the increases in the accident compensation motor vehicle account as part of the petrol amount rather than as an addition to the annual vehicle-licensing fee. The Government agreed with this approach. Absorbing the increase as a petrol amount is seen to be fairer and avoids some adverse social impacts of increasing the annual vehicle-licensing fee. 
Petrol usage is broadly correlated to risk in terms of distance travelled on the road. In December last year following public consultation the Government announced that for the 2004-05 levy year the petrol amount will be raised from 2.3c per litre to 5.08c per litre. This bill brings into effect those changes and establishes the petrol amount as a petrol levy. 
Given that the Injury Prevention Rehabilitation and Compensation Act provides for refunds for overpayments of levies the bill also provides for regulation to refund the petrol levy for commercial uses of petrol off-road such as for farming vehicles marine vessels and other machinery. It also provides flexibility for future options for an Accident Compensation Corporation levy to be placed on other fuels. 
There are no plans at this stage to place an Accident Compensation Corporation levy on any fuel other than petrol. In fact there are several barriers to placing an accident compensation levy on such fuels. For example diesel is not subject to an excise duty and much of the uses for diesel are for purposes other than powering motor vehicles. 
This change is purely to future-proof the Act should these barriers be removed and should it be appropriate to apply an Accident Compensation Corporation levy to other fuels. Further work is being undertaken on long-term funding of the Accident Compensation Corporation motor vehicle account in the light of the  
New Zealand Transport Strategy 
. There will be full public consultation on any further changes to the way the motor vehicle account is funded. 
There is a second function of the bill unrelated to the Accident Compensation Corporation motor vehicle account. The bill also reverses undesirable changes to the Accident Compensation Corporation appeal regime which was introduced by way of the Statutes Amendment Bill last year. Section 162 requires that appeals to the High Court are either by leave to appeal being granted by the District Court or special leave being granted by the High Court. Section 162 was repealed and now accident compensation appeals to the High Court can proceed as of right. The District Court Amendment Act will remove the requirement that leave be sought so people would be able to appeal to the High Court regardless of circumstances. 
The effect is that a significant filtering mechanism has been removed. For example 25 of 40 attempts to appeal accident compensation decisions to the High Court were refused leave. The High Court Rules committee is concerned at the potential impact on the High Court’s workload. I am concerned at the potential cost implications for accident compensation. The Minister of Justice agrees that the amendments should be reversed. 
I believe that this is a practical way to manage costs of the appeals process. The bill therefore reinstates the previous Section 162 of the Act. The Department of Justice intends for the District Court Amendment Act to come into force by Order in Council later this year. This amendment bill reinstatement of Section 162 would be brought into effect by the passing of the Order in Council that brings the District Court Amendment Act into effect. I commend the bill to the House. 
Dr PAUL HUTCHISON (NZ National—Port Waikato) 
: 
 I am pleased to have the opportunity of speaking on this Labour Government’s “Unashamedly Blatant Tax Amendment Bill” otherwise euphemistically known as the Injury Prevention Rehabilitation and Compensation Amendment Bill. This bill literally represents yet another iniquitous and rapacious grab by this socialist Government into the pockets of ordinary New Zealanders. The tax in this bill comes as one in a series of taxes levies and increased compliance costs that this Labour Government is systematically and stealthily imposing on the people of New Zealand. 
This is the Government that says that it is focusing on economic growth. This bill epitomises just why the Prime Minister has had to admit in this Parliament that her Government’s policies have no date attached to when New Zealand might ascend into the top half of the OECD. This bill’s 5.8c per litre increase comes on the top of the 1 July Crown revenue petroleum excise tax increase which was from 17.8c per litre to 18.5c per litre and the 1 March 2002 road fund petrol tax hike which was from 13.5c per litre to 17.7c per litre. That is 3 years in a row that this Labour socialist Government hits the ordinary New Zealand taxpayer in the pocket and that is just in the area of accident compensation and it is probably only the beginning. 
It is relevant to this bill to look a little wider and glimpse over how hungry this Government is to grasp into the New Zealand workers’ hard-earned wages by whatever method it can. I took the trouble of going to our Parliamentary Library to see how in relation to this bill the Government has managed to spread its tentacles and grasp taxes from the New Zealand worker. The chronology it has left is quite extraordinary. This was the Government that said it would not increase taxes. All we have to do is look through the bill and on the first page we see “income tax”. 
Mr SPEAKER 
: The member can talk about this bill and the reasons for introducing it or not introducing it. But what he is doing now is going through a long list of taxes that are outside this bill. 
Dr PAUL HUTCHISON 
: Thank you Mr Speaker. I will go straight on to excise duties petrol tax duties and Accident Compensation Corporation levies of which we have a chronology that is a legacy of shame to this Government. Might I just start with the Accident Compensation Corporation levies because four of them were outlined by the parliamentary research unit on 1 April 2002 a short year ago. The Accident Compensation Corporation motorbike registration levy was raised from $134 to $211 a rise of 57 percent just in July 2002. The car ownership levy increased 14 percent from $130.23 to $141 and there are a whole range of other levies including petrol excise duty that have also been increased by this Government. 
It is also relevant to remember that many anticipated this—including the effects of the Kyoto Protocol which is also likely to have the effect of increasing petrol tax by at least 5 percent. The list is readily available. It goes on and the impacts it has on business and economic growth in New Zealand are profound. 
Turning to the bill I point out that the regulatory impact and business costs compliance statement states the reason for increasing costs is that the motor vehicle account is facing exactly that increase in costs. The statement saysthese increases have resulted primarily from improved estimates of long-term rehabilitation costs for seriously injured claimants and underlying cost increases. I want to ask the Minister why for 3 years in a row the corporation has had to fine-tune the way it estimates these costs and they have gone up each year. 
We know that the Government’s focus—it is all over the annual report—is on prevention care and recovery. If indeed prevention was to be successful and if rehabilitation was to be successful these costs would not have gone up. In fact the levy would have gone down. But the Government has failed on all three counts. 
This Government used to talk about how it would fix the Accident Compensation Corporation; how it would make the Accident Compensation Corporation more efficient; how by removing the competitive model everything would be better. But it is not. The Accident Compensation Corporation is actually a $2 billion business. It is a substantial business. This Government says that one of the major focuses encompassed in this bill is the area of prevention so that these levies might be contained. Yet less than 1 percent of that $2 billion is actually spent on prevention. In fact it is in the order of 0.75 percent. 
This amendment bill is undoubtedly unnecessary. One of the extraordinary things that I note in the Accident Compensation Corporation’s book  
Consequences: What Accidents are Doing to New Zealanders 
 is the fact that deaths and injury on the road are reducing. The Accident Compensation Corporation says that this is good. On closer analysis road deaths have marginally come down. But it is of huge concern that in New Zealand we average 12 deaths on the road per 100000 people whereas in the UK there are only seven deaths per 100000 people. In 3½ long tortuous years of this Labour Government what has it done to effectively prevent road deaths let alone deal with the more important statistic which is the moderate to serious injuries? Those are the ones that impact on Accident Compensation Corporation levies. If we analyse exactly what happens we see that in 1988-99 it was those moderate to serious injuries that sank the lowest they have done in decades and over the last few years they have marginally increased. This tax bill is an indictment on the ineffectiveness of this Government’s policies to do what it said it would with the Accident Compensation Corporation and that was to have effective prevention and a focus on prevention and early rehabilitation. 
These are the right things to do but under this model which the Government has put to New Zealand unfortunately none of it has succeeded. For 3 years in a row this Government has gone about increasing the Accident Compensation Corporation levies from petrol. This bill just epitomises another failed policy of this Labour socialist Government. 
DARREN HUGHES (NZ Labour—Otaki) 
: 
 I rise with pride to speak to the first reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill and in doing so follow on from the member for Port Waikato who I do not think believed what he had to say when it came to the approach this Government is taking with accident compensation. He knows that we are putting a huge emphasis on rehabilitation and injury prevention. We have reshaped the entire model around those principles and it is another good example of the Government bringing legislation to the House that ties in very closely with strategies the Government has put in place. For example the injury prevention strategy that the Hon Ruth Dyson announced last year and the New Zealand transport strategy that has also come out have very clear goals. Here we have legislation that puts those high-level goals into something practical for the New Zealand people. When it comes to the tax increase of course that is controversial with regard to roading funding but it was well signalled from December last year. The Government is making great progress on injury prevention and this is a bill we can vote for with some pride. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 Clearly the member who has just resumed his seat has no connection with accident victims because he would not be singing the praises of the Accident Compensation Corporation if he had a great deal to do with them. I think the member should stay silent talk to some accident victims and hear what the dickens is going on. 
Darren Hughes 
: As a constituency MP I know what I’m talking about. 
PETER BROWN 
: That is a debatable matter at the very least. There are accident victims out there who are suffering immensely. Accident compensation is missing the mark completely in many many areas and this might well be one of the areas where it is missing the mark. 
We are not necessarily against the Accident Compensation Corporation increasing the 2.3c per litre excise duty to 5.08c per litre but we say that money should come from the levy that goes into the consolidated account already. The motorist is paying plenty to run his or her motorcar and to be covered by accident compensation. That is where the Government should have taken that money from in the first instance—from the 17.5c per litre or thereabouts that goes into the consolidated account. This is another slug at the motorist. This Government has slugged the motorist in this country more than Mike Tyson was by Lennox Lewis. 
David Benson-Pope 
: Very droll! 
PETER BROWN 
: I thought that was pretty good. That member can sit there and say the motorist should be slugged for this and that and slugged here again but not every motorist will pay this duty—only the petrol guy and not the diesel guy or the truck guy. Do they not get involved in accidents I ask that member? [ 
Interruption 
] That is quite right; they do. 
Hon David Carter 
: He doesn’t know. 
PETER BROWN 
: Mr Benson-Pope is silent now. I can tell members that if the Government wants to increase the levy for accident compensation it should put it right across the board. Accident compensation is meant to be a “no-fault no-blame” structure. But what happens is that only the people whom we think are vulnerable enough to pay are targeted. The others are left alone. Ruth Dyson knows that what I am saying is true; she knows that she has put the diesel people into the too-hard basket. She almost acknowledged that in her opening speech in this debate. 
Hon Ruth Dyson 
: You would put a tax on diesel? 
PETER BROWN 
: We would put the whole thing across everything but we would take it out of the tax that is already being paid. 
Hon Ruth Dyson 
: What would you take it off? 
PETER BROWN 
: I am almost positive that this bill will go to a select committee. The Minister has done her numbers so she knows that the Greens or United Future will prop this bill up and get it through its first reading. I will tell the select committee exactly how to solve the problems of this country in terms of accident compensation exactly as New Zealand First is telling the select committee how to solve the transport problems. 
Hon David Carter 
: The Greens would put us on bikes and skateboards. 
PETER BROWN 
: Bikes and skateboards! 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I am trying to hear as are other members. 
PETER BROWN 
: I could not even hear myself. I read in a press release that if this excise duty goes up Shell New Zealand will also impose extra costs of collecting it on the motorist plus there will be GST on top of that. I might be a simple sailor but would someone tell me how the extra cost of collecting 5.08c per litre is dearer or amounts to very much more than collecting 2.3c per litre? I fail to understand that. The oil companies are accounting for paying 2.3c per litre into the Accident Compensation Corporation’s coffers and accounting for paying 5c per litre will not in my estimation add any cost to the oil companies. But like the Government they are climbing on to the motorist again. I hope that the other oil companies show a good deal more responsible attitude than Shell New Zealand. 
The Minister referred to a legal requirement to fully fund the motor vehicle account. That all sounds very sound and sensible; we have no argument with that. However there is also a legal requirement for the Accident Compensation Corporation to provide accident compensation to accident victims. Daily in my office I receive letters—and I have no doubt that National Party Opposition members also get letters—from accident victims who state the accident compensation system is failing them. If this bill goes through this House as it is will the Minister give the House an assurance that accident victims will be better looked after? I do not think so. I think that much of that money will be absorbed in administration costs and goodness knows where else. As this bill stands New Zealand First will not be supporting it. We will not be supporting it to a select committee and we would urge the Minister to rethink the whole thing properly. 
LARRY BALDOCK (United Future) 
: 
 First I think that members in the House should focus their attention on the member Peter Brown because he will probably have a heart attack when he hears my first statement in this speech. United Future will not be supporting this bill. United Future will not be propping up the Government on this measure. If the Government wishes to raise new taxes it will have to look to the Greens for support because we do not support this measure to increase the levy for accident compensation. The reason we are not supporting this bill is that we cannot condone a further unnecessary increase in the tax burden borne by New Zealand motorists. New Zealanders already pay more than $1.7 billion in petrol excise duties road-user charges and motor vehicle licensing fees. However more than $785 million of that is diverted straight back into the consolidated account. It is not spent on accident compensation roads or anything that is directly transport-related. That $785 million is siphoned straight out of the regions and now the Government is asking motorists to cough up even more. 
United Future is not against providing more funding for the transport-related costs borne by the Accident Compensation Corporation; members should not get us wrong on that. We believe motorists should have to pay for the rising costs of treating the people who are injured in car crashes. Accident compensation levies at the petrol pump may be a simple way to collect that funding—the more one drives the more one pays. Perhaps that might be considered common sense but we have to ask whether it is fair. There is no compensation for or consideration of the individual motorist who takes care of his or her own safety who may purchase a safer vehicle and therefore should not be bearing the costs that are spread across the whole driving public. However if that is the measure we are to follow then the extra funding should come from the revenue already collected from road users—as has been said already on a number of occasions by different speakers in the House—rather than taking the form of yet another extra cost for motorists. 
Of the excise duty that is currently collected at the pump 2.3c per litre is already ring-fenced for the Accident Compensation Corporation. Given that so much of that excise duty goes directly into the consolidated account why not ring-fence a further 3c per litre of that for the Accident Compensation Corporation and give the long-suffering motorists a break? The fact that 2.3c per litre is already ring-fenced proves that the Government can designate the funds to the proper source when it chooses to do so. Given the fact that the Government expects to have significant surpluses this year it would be reasonable for the Government to put its hand into its pocket to meet those needs on this occasion. We support the Government’s common-sense approach of not spending all that surplus before we are sure of it being there and— 
Hon David Carter 
: So you’re supporting a tax increase now? 
LARRY BALDOCK 
: No. We are supporting a prudent approach to any potential windfall. But that would have been a very small step in the right direction. 
United Future has consistently called for the revenue that is collected directly from road users to be spent on roads and other transport-related expenses including the Accident Compensation Corporation. We understand that the initial fiscal impact of that would be considerable so in order to give the Government’s finances time to adjust we have argued that it should be phased in over a 5-year period. Perhaps the increase of 3c per litre for the Accident Compensation Corporation could be used by the Government to make a start on such a policy rather than passing this bill which does the complete opposite of that. 
At a time when New Zealand’s economic growth is coming under increased pressure from both external factors and deficiencies in our national infrastructure—especially roading—is this really a good time to siphon another $75 million out of the regions and businesses of New Zealand? This extra Accident Compensation Corporation levy will cost Canterbury an extra $10 million per year the Bay of Plenty $7 million Otago $4 million Wellington over $8 million the Waikato $10 million and Auckland a whopping $28 million—and those are just conservative estimates. How does that support the Government’s much-publicised priority of encouraging regional development and economic growth? How can it be fair to take all that revenue from regions that are already paying almost twice the amount they receive back from the Government for transport-related expenditure including that relating to the Accident Compensation Corporation? 
I urge the Government to reconsider its support for the measures in this bill and instead to support United Future’s policy of spending all revenue already collected from transport users on transport-related matters. That would address the need for increased Accident Compensation Corporation funding and at the same time it would benefit road users and encourage economic growth at both the regional and national level. The Automobile Association’s director of public affairs George Fairbairn has said that some members of the association accept the need to cover skyrocketing medical costs but that they want to know when the levies will stabilise. When will we see the increasing cost of medical expenses resulting from accidents on our roads begin to stop climbing and reach a plateau? I believe that will be when we begin to build roads that provide a safe environment for motorists to travel on. 
It has been clearly pointed out by Ministry of Transport officials—even as far back as 1999—that 15 percent of the fatalities and injuries on our roads are a result of the road conditions themselves. It would therefore make much more sense to invest more of the finance that has already been gathered into building better roads and to have a net gain from a reduction in the expenses that come from accidents and injuries that result from poor roads. 
I reiterate that United Future will not be supporting this bill. 
DAVID CUNLIFFE (NZ Labour—New Lynn) 
: 
 It is indeed a pleasure to follow the member Larry Baldock. He is erudite intelligent and honourable—and in this case he is wrong. 
Bernie Ogilvy 
: Is that ever said about you? 
DAVID CUNLIFFE 
: It is often said about me. Mr Baldock has made an important point. He has asked why all the money that has been raised from transport sources is not spent on transport uses and he has suggested that as a first step that should be done. The point is that if that money were diverted into transport uses taxation would have to be raised from other sources. I am afraid that even in a United Future world there is no such thing as a free lunch. 
Someone asked me on the street what I did for a living and when I told that person I was a politician he scratched his head and asked what I made. I scratched my head and thought about it for a while and then it finally dawned on me—on this pre-Easter occasion—what it is that we make around Parliament: law. It is a pleasure to be able to support this bill because it will make an excellent law. It is fair. It puts the cost where the risk is highest and reduces the cost where the risk is low. It provides for sustainable funding for accident compensation and it ensures that people will be able to be rehabilitated and to go forward. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The Green Party will be supporting this bill to the select committee because there are some very important principles in it that we strongly support. We hope that we will make some improvements at the select committee to take the bill further in some directions where it has started in a small way but not gone far enough. The first important principle we support is that there should be better long-term care and rehabilitation of accident victims. Because the National Party kept cutting levies right throughout the 1990s and not funding the tail we have ended up with a lot of people—many of whom I have helped through my constituency office in the Coromandel—who are having their accident compensation payments chopped off when they still need them because the money is not there. Peter Brown is right on that count but why does he then oppose raising the money to fix it? We support raising the money to fix it and I will get to that in a minute. 
We also support the strong principle that people should pay roughly in proportion to the contribution they make to the risk. Obviously that cannot be taken to a fanatical degree but it is undoubtedly true that the person who uses his or her car once a week to trundle down to the local shops does not contribute to the risk of accidents as much as the person who drives tens of thousands of kilometres every year at high speed on motorways. 
At the moment those two types of driver pay the same amount. The people who hardly use their vehicles who use buses walk or cycle and use their cars only when they have to pay the same levy as the people who take their cars everywhere. So we strongly support shifting from the registration cost of the vehicle and on to the fuel cost which much more closely mimics the actual use of the vehicle. 
The trouble with this is that all the Government has done at this stage is put the increase on to the fuel rather than have that shift. We believe that if the Government could show people that it had reduced their registration cost by $141 then they could have accepted 15c a litre on petrol instead. That would have been a fairer way to do it and we will continue to argue for that. Putting the cost entirely on registration is a barrier to vehicle ownership and that is unfair. It is also a barrier to safety because people do not register their vehicles due to the very high cost. Also putting all the cost on to registration rather than on fuel makes it easier for people to evade paying their accident compensation levy at all. They can avoid it by illegally driving unregistered vehicles. One simply cannot avoid a levy on fuel. People either buy fuel or they do not. So we are disappointed that we have taken only a small step in that direction. 
However we agree with Peter Brown that it is unfair that this applies to petrol and not to diesel. We believe that diesel users should contribute in the same way. They should contribute according to the kilometres they drive rather than by way of the registration cost of their vehicle. Whether that is done by a levy on diesel which is possible with a rebate system or whether it is done by a levy on road-user charges which is also possible—and which is how they pay for roads—is fine by us but it should be done in that way rather than done on the registration cost. 
At the moment of course we have a strong incentive for people who do high mileage to buy diesel SUVs which are a huge risk to other vehicles in a crash although safer for their drivers. They are much more dangerous for anybody they run into. People are much more likely to be killed if they are hit by an SUV than if they are hit by a light car. So SUV owners are externalising all the costs of their safety on to other people and there is an incentive to use those vehicles rather than petrol cars because people get their accident compensation cheaper if they drive very high mileages by going to diesel rather than to petrol. 
I am disappointed that National Party members do not support funding long-term care and rehabilitation of accident victims because clearly we are not going to get that unless we fund it and they are opposed to what they call a new tax. We do not call this a new tax. We call this paying one’s way. We are disappointed that they do not support full funding of transport injuries from the transport system. They seem to support some kind of cross-subsidy from the general taxpayer to road crash victims. We do not support that and in fact calling this a new tax is really just scoring a cheap political point. It is a statutory requirement that the system be self-funding and if we want decent long-term care and rehabilitation then we have to fund it and it has to be funded by transport users. 
Peter Brown and United Future both say that the money should come from the current petrol excise. Let us have a look at that proposition. The current excise is only on petrol. If we want the increase in accident compensation funding to come from that then diesel users are not going to be contributing a cent because diesel users do not contribute anything to the consolidated account. That is one of the great inequities at the moment. All the excise that goes into the consolidated account comes from petrol users. None of it comes from diesel users. But I have great difficulty with the idea that fuel and motoring is not something we can tax for general revenue. Virtually every developed country in the world taxes fuel and motoring for general revenue. 
Nobody argues in this House that all tax on tobacco ought to go into building cigarette factories. Nobody here argues that all tax on alcohol ought to go into booze barns. But somehow people argue that all tax on motoring ought to go into roads. If we look at the land transport pricing study published in the late 1990s we will find that the costs that motorists cause to the rest of the economy—costs that are picked up by the taxpayer—are far more than the $700 million a year that goes into the consolidated account from the petrol levy. So the Greens have no difficulty with some money going into the consolidated account from a fuel levy but it ought to be equal across the board across petrol and diesel. 
In fact if we want to snaffle that money for accident compensation or something else or if we want to put it all into roads then members have to say which hospitals in the country they are going to close and which schools they are going to reduce funding for—because that money is being used now. It is being used for the general expenditure of the Government and if members are going to take it from there they have to argue what they are not going to do instead. 
We heard Larry Baldock talk about money being siphoned off from the regions as though there were some great sink into which this accident compensation levy is poured and as though the regions never see it again. Where does the levy money go? It goes back to accident victims and to treatment systems and where are they located? They are located in the regions. So in fact the money that is “siphoned off” from fuel tax in the regions goes back into the regions in rehabilitating people who can then play a part in the workforce and contribute to the economy of the regions. It goes back to the people who work in the treatment and rehabilitation systems in the regions and that provides economic development in the regions. 
Roads and motoring are not the only things that boost the economy. All the other services such as health services and care and rehabilitation also boost the economy and it is a completely shallow argument to say that this money is being siphoned off somewhere never to appear again and never to play any useful role in the economy. 
So I am disappointed at the shallowness of the debate that has taken place today. The Green Party wants to see a much more concerted move of all of the costs that are loaded up-front on owning a vehicle on to the cost of running it so that it is cheaper to own a vehicle and more expensive to run it. That will be a good incentive in that people will use their cars more wisely but they will have access to cars. People will not be shut out from transport because they cannot afford the registration fee and people will not be driving unregistered cars. We want to see it shifted to diesel on the same basis so that diesel users at least contribute their share to the Accident Compensation Corporation to the economy and to the consolidated account. It also gets rid of the distortion that at the moment is promoting diesel as a cheaper alternative to petrol when it is not and is promoting all the emissions that go with diesel. 
Peter Brown 
: What about gas? 
JEANETTE FITZSIMONS 
: What about gas indeed! If it still existed would it not be nice? I still drive on CNG whenever I can but that is another issue. As I say we will support this bill to the select committee. We will see whether we can get some improvements on it when we get there 
MARTIN GALLAGHER (NZ Labour—Hamilton West) 
: 
 I support the Injury Prevention Rehabilitation and Compensation Amendment Bill. I support the Minister in her introduction of this bill and I take this opportunity to commend the previous speaker for a well-reasoned contribution in which the sort of political opportunism that we see from one of the Opposition parties on that side of the House was totally absent. 
Dr the Hon LOCKWOOD SMITH (NZ National—Rodney) 
: 
 I take no pleasure in speaking on the introduction of the Injury Prevention Rehabilitation and Compensation Amendment Bill. I would have thought that a Government should be damned well ashamed of itself to come into this House and increase the Accident Compensation Corporation levy on petrol from 2.3c per litre to 5.08c per litre. That is a huge increase in that levy—or tax—on the public of New Zealand. What was so pathetically absurd in the contribution of the co-leader of the Green Party Jeanette Fitzsimons was that she thinks the way to provide more service is to increase the spending. It is the way the Green Party thinks. It has no idea of how one actually runs a business or an organisation. 
The first thing that should happen is that the Accident Compensation Corporation should have to deliver some efficiency instead of automatically coming to the Government when there are a few more costs and saying that it wants more money. Of course the reason that the Accident Compensation Corporation can come to the Government and simply say that it wants more money is that that Labour Government has renationalised the Accident Compensation Corporation. It is under no threat from this Government. No matter how inefficient it is and no matter how big a monopoly the Accident Compensation Corporation becomes this Government will say: “Yes we’ll enable you to levy more charges on the poor people of New Zealand with this legislation.” 
The increase is more than the total of the old levy: it is 2.78c per litre. The old levy was only 2.3c per litre. Motorists will have to pay almost 3c per litre more on their petrol when this bill goes through and Labour thinks that is great. 
What has become of that once great Labour Party which used to care about the working-class people in this country who have to use petrol to get around? It is going to slug those people another 2.78c per litre. It all goes back to the problem that Ruth Dyson as the Minister for ACC and her cronies in this Labour-led Government said they cannot have competition in the Accident Compensation Corporation or efficiencies or better services delivered through competition. They said they would re-establish a monopoly. We all know what happens when there are big monopolies. They become very inefficient and costs go up. 
Look what has happened. All we have seen since competition was wiped out of the Accident Compensation Corporation is that the self-employed workers levy has gone up 40 percent the wage-earners levy has gone up 10c to $1.20 per $100 of income—an almost 10 percent increase—and the motorbike registration levy has increased significantly. There was a 57 percent increase in the motorbike registration levy. Previously the car ownership levy increased by 14 percent and now there is a further increase in the petrol levy—all because we have a monopoly. It is a monopoly where competitive efficiency is impossible. The only answer the Government which refuses to allow competition in the system has is more taxes and more levies on the public. 
I draw the attention of the Minister who introduced this bill to the requirement of a regulatory impact and business compliance costs statement to accompany all legislation introduced into this House. The Hon Ruth Dyson is not without some intelligence. Some of the Ministers on the Government side of the House are short a few quid upstairs but the Hon Ruth Dyson has— 
Hon David Carter 
: A sandwich short of a picnic. 
Dr the Hon LOCKWOOD SMITH 
: She does have a couple of neurons upstairs. I know that. I want her to look seriously at this regulatory impact and business compliance costs statement and to tell this House through the course of the debate on the passage of this legislation whether she genuinely considers that that is a thorough cost-benefit analysis. I draw her attention to the statement of the net benefit of the proposal on page 7 of the explanatory note. That statement acknowledges that there is a 25 percent increase in the costs. It states that that has been assessed through assessment of the various components of the account. 
What we do not see here is anything about the costs on the economy that the increase in the petrol levy will impose. It should have been possible to estimate the increase in transport costs. It ought to have been possible to estimate for example the increase in costs for the export sector in getting products to the wharves. It ought to have been possible to get the increase in costs to our education sector. It ought to have been possible to get the increase in costs to our elderly retired folk. It ought to have been possible to itemise in that statement of net benefit the actual cost to the economy of this very significant increase in the cost of petrol through that levy. 
That is what a cost-benefit analysis is all about and we see nothing of it. We talk about what we see in the business compliance cost statement which states that the various options that were explored have costs and benefits. The following impacts can be anticipated to varying degrees. There has been no attempt to quantify the effects on the wider economy. There has been no attempt to quantify the drop in petrol consumption. It might be a positive thing for the environment if less petrol were consumed. It is a totally inadequate cost-benefit analysis in relation to this legislation. It allocates no costs to any of the impacts. I believe that when the Government through this legislation is imposing a more than doubling of the petrol levy on the New Zealand public there should be an assessment of the wider costs to the economy. 
That is simply not good enough for a Minister like the Hon Ruth Dyson. A Minister with her tertiary qualifications—and we are not talking about some hopeless Minister here—ought to be able to make sure that a bill she introduces has an adequate cost-benefit analysis. By any assessment it is a woefully inadequate cost-benefit analysis. 
I come back to the point where I started in this debate. Before levies are imposed on the public when there is a monopoly administration system like the accident compensation scheme in New Zealand the Government has a responsibility to the public to make sure that every possible mechanism is used to introduce efficiency into that system. This Labour Government has done exactly the opposite. It has rebuilt the Accident Compensation Corporation into a huge monopoly the efficiency of which it is now impossible to measure because there is no competitive mechanism to measure it. 
Darren Hughes 
: How come premiums have come down? 
Dr the Hon LOCKWOOD SMITH 
: The junior member Darren Hughes says that levies have come down. He should tell the truth in this Parliament. Under his Government accident compensation levies continue to go up. As I said before levies for self-employed workers have gone up wage earners levies have increased the motorbike registration levy has gone up and it is serious for businesses around the country as well as for motorists. Under this Government accident compensation levies continue to go up because we have a monopoly. We have an inefficient empire running the Accident Compensation Corporation and this legislation is just feeding an inefficient bureaucratic empire. We are totally opposed to it. 
Dr MURIEL NEWMAN (ACT NZ) 
: 
 On behalf of the ACT party I rise to strongly oppose the Injury Prevention Rehabilitation and Compensation Amendment Bill. This is a bill that has been brought forward by a Labour Government that promised no new taxes. Apart from the people who earned over $60000 there were to be no new taxes. I ask the Government members sitting opposite what on earth they think this bill is. It is a bill to increase taxes. It is a bill to gain something like $155 million from hard-working New Zealand families. It is a tax-grab bill. Members opposite should slink in their seats because they are going against their election promise and increasing taxes in this bill that we are now debating. 
The bill increases petrol taxes from 2.3c a litre to 5.08c a litre. This is the third time petrol taxes have been increased since Labour has been the Government. In this case it is a 120 percent increase. If we look at the figures New Zealanders use almost 3000 million litres of petrol a year. If we multiply that by 5.08c we end up with a very large amount of money that the Labour Government is stealing off hard-working families. But we should not be surprised because since Labour has been in power it has increased the tax take from $34 billion in 1999 to $43 billion in the year 2003. That is a $9 billion increase mostly because of the stealth taxes it has introduced. 
Labour members said there would be no new income tax increases but what they have done is increase levies charges and taxes in a whole range of different areas. For example we know that fringe benefit tax has gone up and that tobacco tax went up. Petrol tax which is what we are talking about today has already been put up a number of times as have diesel and road-user charges. If we look at things such as the cost of birth death and marriage certificates they have all gone up as have driving licence fees. There is a litany of different types of fees and charges that this Labour Government has put on. 
If we look at accident compensation levies we find Labour has increased the levies for the self-employed by 40 percent. The wage earners levy was increased by 10 percent. Motorbike levies increased by 57 percent and car ownership levies increased by 14 percent. Even over the last couple of weeks we have had new levies and taxes on car dealers. We now have new levies and charges on school exam fees for goodness’ sake. Across every level of New Zealand society this Labour Government has increased charges. 
 When we think about a tax-grab bill from the Accident Compensation Corporation we have to ask how come we can possibly have that. The only reason that that could be done is that the Accident Compensation Corporation is a monopoly. The previous speaker pointed that out loud and clear. The Labour Government nationalised accident compensation. We actually had a competitive model operating and operating extremely well. That was one of the really good things that the National Government did. Labour came into power and immediately changed it. It scrapped it and meanwhile there were so many employers in New Zealand who had found their accident compensation levies had gone down for the first time ever. This Government came in and what did it do? It imposes additional costs on to the business sector of New Zealand that earns us the wealth and creates a rising standard of living if only it is given a chance. 
We now have the Accident Compensation Corporation as a monopoly. It is bureaucratic inefficient and costly. It is just a monster in New Zealand. It urgently needs to be reformed but this Government is doing it in the wrong direction. 
Employers universally oppose accident compensation being run by the Government. In spite of all of the assurances by Labour they know that it is a service they get and costs they have to provide do not even match anywhere near what the private sector can do. That growing cost burden on New Zealand’s small businesses will add to the cost that ordinary New Zealand consumers have to pay. It will also make them less able to withstand a downturn in the economy. 
A while ago an article in the  
New Zealand Herald 
 estimated that the costs of small business had increased by over $25000 per year for a medium-size small business. As that was done several months ago I suspect that that figure is nearer to $30000 a year in additional compliance costs since Labour has been in power. That is a shocking indictment on the Labour Government. It is putting a huge deadweight cost on the small businesses that are trying to produce the wealth the jobs and trying to keep this country going. All Labour can do is to think of all these new charges and new red tape and dump it on the backs of small businesses. 
That is disgraceful. This Labour Government came into power trying to pretend that it was pro-business. This bill lets us see the Labour Government’s colours. This is an anti-business Labour Government. All it wants to do is to nationalise as much as it can and if it cannot nationalise it then it will regulate it to death. Over the last 3 years in this House we have seen legislation that does just that. 
The justification for the bill is meant to be all about injury prevention. If we look at the statistics on the rate of serious injury and death from motor vehicle accidents we find that it has actually decreased by 30 percent over the last decade. That is in spite of the number of cars increasing by 30 percent over the last decade. New Zealand is developing an excellent track record in preventing motor vehicle injuries and deaths and the Government knows that. It has a Minister of Police who given any opportunity will stand up in the House and tell us what an excellent job the traffic police are doing. We have a process through Transfund and Transit New Zealand where dangerous roads are being fixed where the engineering which is a major cause of accidents in this country is quietly being improved over time. We should start to see the death rate and the injury rate on New Zealand roads reducing even further. 
What is the Government’s response to this? Its response is simply to increase accident compensation levies pretending that it is trying to keep up with the demand. It is just hollow words. This is simply a way to try to gain a whole lot of money to put into a fund—something like the Cullen fund—that will be worth over $2 billion by the time the Government has finished building it. The Government is trying to do it very quickly over a period of 4 or 5 years—trying to get this $2 billion into this fund so that it can pay for future accidents. However the Government is actually asking today’s motorists not only to pay for the long-term claimants of yesterday last year 10 years ago today’s claimants and tomorrow’s payments but also to pay for the claimants in 10 or 20 years’ time. 
How fair is that to burden this generation of motorists with the costs to come in 20 or 30 years’ time? It is an absolutely stupid idea. We would only get a Government monopoly even thinking about doing something like that. In fact if it were not a monopoly it would be trying to keep the cost down provide an excellent service be efficient and it would try to make the motorists and all the other people who pay accident compensation which is virtually every working New Zealander feel they were getting really good value for money. 
We should expect this sort of bill because this is a socialist Government. Labour has a track record of trying to take money off the workers of New Zealand to give to those who have not earned it. That is the socialist philosophy. We understand that the average working family in New Zealand is now $1400 a year worse off in real terms than when Labour took office. What has the Government done with that money? It has put it into funding privilege for the groups that it likes. It has put it into buying the votes of beneficiaries superannuitants and so on. It has not put it into the pockets of hard-working New Zealanders who actually earned it. 
DAVID BENSON-POPE (NZ Labour—Dunedin South) 
: 
 I am pleased to rise in support of this fine legislation. 
Hon DAVID CARTER (NZ National) 
: 
 As I start to speak to this bill it is interesting to note the length of calls that Government members have just taken to justify yet another tax bill before the House today. Here we go again in another attempt to slug the motorist in the hope that the petrol pumps will tick over shortly and another 2.78c a litre will be added to the price of petrol. 
Peter Brown 
: Plus GST. 
Hon DAVID CARTER 
: Yes plus GST and the Government cynically hopes that people will not notice the increase. Mark my words: I will be making sure they know that when that new tax increase goes through yet another tax increase is being slugged on to the New Zealand motorist. 
As we debate this bill I recall with interest the election campaign in the middle of last year. Time and time again Government members around the country promised: “Read my lips. There will be no further tax increases.” I have lost count of how many times we have brought legislation into this House recently in an attempt to slug New Zealanders—most of them real Kiwi battlers; middle-income New Zealanders—and here we go again with an unashamed attempt to have a crack at the motorists of New Zealand. There is an awful track record in that regard. Just over a year ago we battled in this House to stop another attempt by the Labour Government to put up petrol prices. On that occasion it put petrol up by 4.7c a litre. Nearly 5c a litre was slugged on to motorists that time and this time it is 3c—in an attempt to make sure that they did not notice it. The justification is that the rise is required to plug further the huge bungling bureaucracy we have around accident compensation. On the matter of the last 5c increase passed in roading legislation I recall that the speeches delivered in the House promising that roading money to all parts of New Zealand were absolutely amazing. 
Hon George Hawkins 
: Take your hands out of your pockets! 
Hon DAVID CARTER 
: I will take my hands out of my pockets if it will make George Hawkins feel better. Why does that member not stand and make an attempt to justify the legislation? He is probably not allowed. 
Anyway here we are debating this bill because the current Minister for ACC has contributed to getting accident compensation into a mess. The corporation has come back to the Minister and said that it will need a little more money because money is being spent without any sort of budgetary control. Ruth Dyson has said not to worry because on a Thursday just before Easter the Government will slip in a little bill and put petrol up by 3c a litre—[ 
Interruption 
] The Minister keeps interrupting but as soon as we ask her to repeat what she is saying she cannot remember. Mark my words: I will make sure that residents of the Banks Peninsula electorate will remember this particular petrol increase and I will make sure that they know who is responsible. 
Hon Ruth Dyson 
: They don’t even know who you are. 
Hon DAVID CARTER 
: They do not know who I am? I will make sure that they do know who I am. They will know who is responsible and they will also know that Rod Donald put his hand up and supported this 3c tax increase. 
Rod Donald 
: And add it to diesel— 
Hon DAVID CARTER 
: No. Rod Donald has not read the legislation. He now says that we are adding 3c a litre to diesel. He is wrong again—which gives me an opportunity to debate the logic of the Greens’ argument. Jeanette Fitzsimons came into the House like a dutiful little puppy dog and said that she would support whatever the Labour Government put before us. Then she came along with the most interesting argument of the lot—she attempted to argue that it was fair that the user paid. She attempted to argue that somebody doing a considerable mileage was likely to have a higher accident rate and therefore should pay more. Is that right? Rod Donald is nodding his head. Well what about all the cyclists who are hurt in this country and require accident compensation support? 
Rod Donald 
: Get rid of cars I would say. 
Hon DAVID CARTER 
: Oh so now we are to get rid of cars! I will happily debate that with Rod Donald next time we campaign in the Banks Peninsula electorate. I will happily debate his new policy about how to get accident compensation under control—get rid of cars! That is the logic of the Greens. United Future members at least have had the stomach to stand up this time and say they will not support a tax increase. 
Peter Brown 
: It’s only because they knew the Greens would. 
Hon DAVID CARTER 
: I still admire the fact that they have finally come into the House and are prepared to stand on something they promised in the election campaign. That is a vast improvement on what we have seen in the past. But we cannot keep slugging the motorist because $1.7 billion is grabbed from the motorist now in the form of road-user charges vehicle licensing and fuel excise tax. I guess Labour Party people can argue that 3c a litre is not much in amongst $1.7 billion but the point that has been made by members on this side of the House is that at some stage we have to stop slugging motorists. They cannot continue to pay for the inefficiencies and inadequacies of the Accident Compensation Corporation. 
That brings me to my last point. After the 1999 election we stood in this House and watched that socialist Labour Government dismantle the accident compensation industry that existed in New Zealand. We had speaker after speaker from the Labour Party. I guess if I went back through  
Hansard 
 I would find that George Hawkins was allowed to speak in the House. He probably got up and made a speech like this: “Mark my words: ACC costs will not increase.” Darren Hughes the new member interjected in the House only half an hour ago that accident compensation costs had been held. That is the sort of propaganda Darren Hughes is prepared to believe. Accident compensation levies have continued to increase ever since the Government renationalised that industry. The farmers I represent now face— 
Jill Pettis 
: You can’t represent anybody. 
Hon DAVID CARTER 
: That member says that I do not represent farmers. I am happy and proud to be here representing the farmers of New Zealand. They do a lot more for this economy than that member has ever done. The point I am making to Jill Pettis—the junior Government whip who used to be in the Speaker’s chair—is that the farmers I represent now face accident compensation costs 60 percent higher than in late 1999. So Darren Hughes tells porkies when he comes into this House—[ 
Interruption 
] Darren Hughes is being economical with the truth if he argues that accident compensation costs have not increased. [ 
Interruption 
] Well get up and take a point of order lazy member! 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: If the member could just withdraw that reference to you know what. 
Hon DAVID CARTER 
: I withdraw those references to “you know what”. The point I am making is that accident compensation costs have increased and have continued to increase and it is absolutely unreasonable for any Labour member of Parliament—in this House or outside—to argue that they have not. Only on the eve of Christmas last year that Government increased the New Zealand self-employed levy by 12.4 percent. 
A party vote was called for on the question  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill be now read a first time. 
Ayes 63 
Labour 52; Green Party 9; Progressive 2. 
Noes 51 
New Zealand National 23; New Zealand First 13; ACT New Zealand 7; United Future 8. 
Bill read a first time and referred to the Transport and Industrial Relations Committee. referred to the Transport and Industrial Relations Committee