Hutchison Paul: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
Hutchison Paul: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
[Volume:634;Page:6004] 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you for the opportunity to speak on the Injury Prevention Rehabilitation and Compensation Amendment Bill. The National Party is opposing this bill as it will make accident compensation less efficient it will place a greater burden on the taxpayer and it has been brought in in a deceptive and somewhat devious way. This bill represents Minister Dyson’s and the socialist Labour Government’s absolute ideological bent to stick with the Accident Compensation Corporation (ACC) monopoly at all costs even though it will make accident compensation less efficient even though it sends signals against not for workplace safety even though it undermines the very successful accredited employers’ ACC Partnership Programme and even though it makes it less likely that the accident compensation scheme will be fully funded by 2014 which is required in the legislation. 
I look at the explanatory note of the bill with wonder because it states: “This Bill continues the Government’s commitment to a fair and sustainable ACC scheme by merging the Employers’ Account and the Self-Employed Work Account”. All one has to do is to look at the transitional provisions and one will see that the Minister’s claim to fairness goes right out the door. It states that to achieve the merger by 1 April “the Bill provides for the usual consultation process on the 2007-08 regulations to be bypassed as there is insufficient time to consult”. Ruth Dyson has the temerity to tell this House that she has a commitment to fairness yet with this bill she legislates to bypass due process and consultation. That is classic arrogant behaviour of the Labour Government which now after 7 years actually goes to the lengths of legislating to signal that it is not listening. In fact it legislates to say it is not prepared to listen. That is how far the Labour Government goes. 
The other aspect Labour claims is that the scheme is sustainable. What does Mr Phil O’Reilly of Business New Zealand say about the merger? He says that not only will merging the two accounts mean that employers are subsidising accident compensation for the self-employed but also that without experience rating which rewards a good safety record and penalises a poor one there are not strong incentives for companies to constantly improve their safety management. 
Let us just look at the ACC annual report and its claims under Labour. We see that steadily over the last 7 years accident claims have been going up—year after year despite this Labour Government claiming its monopoly model is so good. Severe and moderate injuries have also been going up despite this Labour Government saying that it is putting more money into prevention. I do not know what the Minister is wittering away about there but the fact is that if one looks in the annual report one sees that claims are continuing to go up despite what this Government suggested would happen. In 1999 when accident compensation was put out to competition and choice claims went down. For the first time in many years the whole organisation became much much more efficient. Case management became incredibly efficient with early rehabilitation and people getting back to work much faster. The facts are there. It is a great worry that the Minister denies the facts. 
But let me look at the other things the Minister says in the explanatory note of the bill. It states: “When workplace injury cover was returned to the ACC the SEWA was retained as a separate Account from the Employers’ Account on the premise that self-employed people have a higher rate of serious injuries than employees.” That is absolutely correct. The explanatory note then states: “Further evidence now indicates that the higher average injury rate for self-employed people is mainly due to the clustering of self-employed people in particular high injury risk industries and occupations (such as forestry fisheries and farming).” That is absolute rubbish. I would like Minister Dyson and her union mates to produce the evidence to substantiate those claims. 
For instance I will look at the rate of entitlement claims per million dollars of payroll. The self-employed rate is 1.06 per million; the employers’ account is half that at 0.525 per million. The average claims cost for self-employed people is $14200; from the employers’ account it is $13704. But what is really important is the fact that the claims per million dollars of payroll for the employers’ account are less than half those of the self-employed work account. Minister Dyson has absolutely no ability to substantiate what she has put in the general policy statement of the explanatory note. 
The Government then has the gall to state in the explanatory note: “The merger will ensure that ACC levies paid by businesses are fairer as they will be based on injury risk associated with activity undertaken rather than business structure.” We agree with that. That is exactly what Business New Zealand has been saying for years and years. Risk rating actually works. But no the Labour Government does not want to believe in simple common sense. 
There is some mischief in this bill that Minister Dyson has not come clean about. Firstly last year the Labour Government very quietly introduced an amendment to section 192(6) of the Act. It allows transfers of claims liability from the employers’ account to the residual account. One of the commentators believes that the transfer of claims liability from the employers’ account to the residual account under this scheme is the most significant change to the accident compensation scheme in the last 6 years. The impact of that on future levies has not been openly discussed or debated nor have the potential ramifications been communicated to the stakeholders liable for funding that growing system. That is yet another example of the Minister failing to listen to those who are intimately involved with the scheme. 
Hon Ruth Dyson 
: Rubbish! 
Dr PAUL HUTCHISON 
: She says “Rubbish!”. 
But what has also happened is that this is undermining the very successful accredited employers ACC Partnership Programme. That is a particularly sad thing because under that programme there has been some very very successful management in the private sector. For instance one of the third-party administrators highlights how its focus on early return to work strategies has meant it has significantly outperformed ACC over many years. Its present average entitlement claim cost is $3900 for the employers against ACC’s average cost of $13700. Its average entitlement claim loss days is 4 compared with ACC’s estimate of 35 days. That is how inefficient the ACC is. Minister Dyson hates the fact that under the ACC Partnership Programme businesses are very effective and efficient in managing the scheme and she want to curb it. That is of serious import. 
By making these artificial changes to the employers’ levy the Government is undermining the highly efficient Accredited Employers Programme.