Hague Kevin: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Text is incorporated into the Bound Volume 
Hague Kevin: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Sitting date: 26 June 2012. Volume:681;Page:3338. Text is incorporated into the Bound Volume.] 
KEVIN HAGUE (Green) 
: 
 There is something fundamentally wrong in ACC. It has been wrong for a while and it gets “wronger and wronger” by the year. The year in question 2011-12 has been the worst year on record. Other speakers have spoken about the social contract that historic bargain in which New Zealanders gave away the right to sue in exchange for a system based on the Woodhouse principles. I have spoken previously in the House about those. It was a great system—a great system that has been brought low. 
I want to tell a story about that system and about that process. It starts more or less in 2009 when we had a Government coming in and a new Minister for ACC who spoke about a financial disaster at ACC. Again other speakers have spoken about that. That new Minister appointed a board and signed a service and purchase agreement with the chair of the board that actually required a target for fewer and fewer people to remain on long-term compensation. In the subsequent years after that 2009 agreement—and in particular in the 2011-12 year that we are discussing today—those targets have become increasingly steep. 
So we were faced with a board of ACC that was under pressure from its Minister and in place were some instructions about what ACC needed to do. What ACC proceeded to do was progressively disentitle New Zealanders by reinterpreting the law so that more and more New Zealanders making claims were not covered. ACC chose to pursue that by introducing this staff remuneration incentives scheme by which staff who contributed to the goal of getting more and more people off long-term compensation would be financially rewarded. It contributed to that goal by hand-picking particular medical assessors who the ACC board knew were likely to give it the result it wanted which was a recommendation that this person was rehabilitated and ready to go back to work. Well it would be fantastic if that were true would it not? Would it not be fantastic if all of those people whom ACC threw off its books—those 3500 people over the past 3 years—in fact did go back into paid work? Sadly that is not the case. Actually only a tiny minority of that group were able to go back to work. Most of that group actually found themselves on income support benefits or in that dreadful limbo world of being neither employed nor eligible for benefits. That is the outcome for those groups. 
The test of that has been in the number of reviews of those decisions that ACC has faced. The current Minister said in the House last week that the rehabilitation decisions—the decisions to remove people from compensation—reflect the fact that the people were rehabilitated and ready to go back to work. Well the problem with those financial incentives for front-line staff is that there is no counterbalance. There is nothing that measures whether the decisions were the right ones or the wrong ones. In fact the increasing rate—that sharply increasing rate—at which decisions have been found at review and in the courts to be wrong suggests that there is something fundamentally wrong with the decision-making processes at ACC. 
What has happened fundamentally is that financial incentives—the dollars—have been put in front ahead of the needs of ACC’s claimants. That is nowhere better reflected than in the issues around privacy. Why is it that ACC had this catastrophic failure of privacy culture? It is because it did not really care about the claimants. Fundamental culture change is needed. Judith Collins’ first service and purchase agreement is due now. What will it say? 
Report noted.