Lees-Galloway Iain: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — Second ReadingText is incorporated into the Bound VolumeLees-Galloway Iain: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — Second Reading[Sitting date: 17 September 2015. Volume:708;Page:6805. Text is incorporated into the Bound Volume.]IAIN LEES-GALLOWAY (Labour—Palmerston North): The Accident Compensation (Financial Responsibility and Transparency) Amendment Bill is essentially about how we fund ACC and how we maintain ACC in a good robust financial state. There has been a lot of rot spoken about the financial state that ACC has been in in recent years. So I think the House and particularly members on the opposite side of the House need a bit of a history lesson about how we got to this bill. It starts back in 1999 when the Government at the time decided to shift from a pay-as-you-go model—i.e. ACC raised as much money as it needed in one year to pay the claims in that year—to a fully funded model where ACC would have enough money in the bank to actually pay the lifetime of all claims that it had on its books. That was a fundamental shift in the way that ACC ran its books. It was always going to be something that was going to take time—to transition from the old model to the new model.From the day that change was made you could technically have said that ACC was insolvent. If it was an insurance company it was technically insolvent from 1999 onwards. But the National Government at the time did not have a problem with that because it knew it was going into transition. The Labour Government of the early 2000s never raised this as an issue because we were transitioning from the old model to the new model. Then along came Nick Smith as the new ACC Minister after the election in 2008. All of a sudden the fact that ACC was technically insolvent became a problem. It was a crisis and it was caused by the Labour Party—blah blah blah. We are used to the National Party blaming Labour for everything. But this had not been a problem for the 10 years previous. Suddenly according to Nick Smith this was a problem. And there was another issue at the time. It was a little thing called the global financial crisis which the Prime Minister is often keen to remind us about during question time and yes that had an impact on ACC’s assets.So Nick Smith created a crisis out of nothing. Why? Because he wanted to increase the levies. Why did he want to do that? Well actually at the time National’s policy was to privatise aspects of ACC—to privatise some of the accounts particularly the work account. Unfortunately no private provider could have competed with ACC with the levies that ACC had at the time. No private provider could compete with ACC. So National found a way to artificially increase the levies so that the private providers actually had an opportunity to compete. Then we had a good report from PricewaterhouseCoopers I think it was. It actually came and said: “Look don’t privatise ACC. That is madness. If you look around the world the ACC is a world leader. There is no better way to do it. Do not privatise it.” Mercifully I think it was Judith Collins who actually said: “We’re going to back away from this silly idea of privatising ACC.”But we still had these elevated levies and all of a sudden that became quite a happy coincidence for the Government because the Government needed revenue from somewhere. It was failing to meet its promise of getting the books back into surplus. It had slashed its own revenue by giving tax cuts to the very wealthy. So it needed to find a new way of generating revenue and keeping those ACC levies artificially inflated was a very convenient way to keep revenue up in the pursuit of the surplus which as yet still has not been reached by the Government. And that is the long and sordid history of how we get to this bill.Actually when we saw the title of this bill we thought “Aha! The Government has actually responded to the pressure that has been applied by the Labour Party and other Opposition parties and the public”—who were becoming increasingly aware that there was a rort going on and that we were being ripped off by a National Government that was actually taking far more in ACC levies than it needed to. We thought that this was the answer. We actually thought the Government was prepared to bring itself under control but unfortunately that has not been the case.Once again—this is becoming a bit of a mantra for this National Government—the legislation has been watered down at the Transport and Industrial Relations Committee and in fact there is nothing now in the legislation that says that the levies set for ACC have to be appropriate for what ACC’s costs are. Instead what the Government now has to do is to be prudent in managing its entire financial situation. So quite possibly we could carry on with the rorts that we have experienced over the last few years. [Interruption] Andrew Bayly that is exactly what is happening.We propose an amendment to this legislation that would sort that out an amendment to the legislation that would actually make it do what the Government said it was going to do—David Seymour: What’s that?IAIN LEES-GALLOWAY: —and that is to say David Seymour that the ACC levies must be set so that the ACC accounts can be prudently managed because that is missing from this legislation at the moment. We agree that over time we need to set levies in an appropriate fashion so that some of the volatility that Jonathan Young talked about can be managed. We also need to make sure that we do not have drastic changes in levies—that we do not have levies plummeting and we do not have levies being put back up again—because businesses like to have security and stability. They like to know what they are dealing with. So we agree with that.But unfortunately that is not what this legislation provides for. This legislation allows the rort to carry on and that is an absolute shame. The Government as is so often the case wants to look like it is doing the right thing but in fact what is actually going on is that very very little will change as a result of this legislation. We are continuing to support it at this stage because we want the opportunity to go to the Committee stage and make the case for the amendment that we propose—the amendment that Business New Zealand actually came and said needs to be made to this legislation to make it function properly. If the National Government is genuinely interested in ensuring that we take only enough money off ACC levy payers to ensure that ACC is in a good robust and stable financial state then National will support that amendment and so will every other party in the House if they feel that way as well. If they do not support that amendment then it is absolutely clear that they intend for the rorts to continue in the future.ACC should not be there to prop up the Government’s surplus. ACC is a world-leading New Zealand treasure that should be there to take a fair levy and in return provide fair treatment and fair compensation to people. That is all that people ask. People actually enjoy ACC because it does provide a level of security for people that is not available to citizens in a lot of other countries. We do not have to go through some of the rigmarole that you have to in the United States for instance around having to go to court just to prove that you ought to be paid out compensation because of medical misadventure or because you have been injured at work. People appreciate the fact that it is a no-fault no-liability scheme and it is there when we need it. And we appreciate that we have to pay a levy for that—nothing comes for free. We have to pay a fair levy. But we expect to pay a fair levy and get fair treatment and fair compensation in return.What we have got right now is that people are paying a grossly unfair levy which is far more than ACC actually needs. Many of the accounts are now 140 percent or more funded. We appreciate that you need probably a little bit more than 100 percent funding but 140 percent funding—and increasing—is a gross misuse of taxpayers’ money.What we also expect from ACC is that people should get fair treatment. They should not be messed around by ACC being told that actually their injury has been caused by a pre-existing condition or all the myriad of other ways that are used to deny people treatment and compensation. A fair levy in return for fair treatment and fair compensation—that is what people expect from ACC but that is not what they are getting from this Government. Only if it amends this legislation as we propose will this bill actually do what it purports to do.