Dyson Ruth: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
Dyson Ruth: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
[Volume:607;Page:5049] 
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.