Hague Kevin: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee 
Hague Kevin: Injury Prevention Rehabilitation and Compensation Amendment Bill — In Committee 
[Volume:660;Page:9121] 
KEVIN HAGUE (Green) 
: 
 I would like to begin by sharing the thanks that David Bennett has just expressed to submitters and officials. I thought David Bennett was a very fair chair of the committee and I appreciated his performance. 
The Minister has raised the matter of the initial bargain that New Zealanders struck in creating accident compensation: the social contract. I refer to the submission of the ACC Futures Coalition about that social contract: “The significance of the social contract cannot be overstated. In giving up the right to sue for covered injuries the public necessarily gave up all the Court-ordered remedies which flow from civil suits. These included: complete compensation for lost earnings (both past and future) compensation for pain suffering and loss of amenity compensation for loss of congenial employment compensation for handicap in the labour market compensation for loss of pension as well as compensation for the cost of treatment and/or rehabilitation.” 
The Government is now seeking to renegotiate unilaterally the terms of that social contract. The Government cannot simply by expressing a commitment to the Woodhouse principles pretend that this bill is upholding those principles. I want to work through them in a couple of speeches beginning with the community responsibility principle. Over the years Governments have moved towards a model for accident compensation that did not resemble the original form for accident compensation but instead resembled a private insurance model. This bill takes accident compensation further in that direction. 
The bill provides for new regulatory powers to introduce experience rating and risk sharing into the accident compensation scheme. This will facilitate the introduction of no-claim bonuses higher or lower levies for individual employers based on injury record and risk rating for motor vehicles and owners of motor vehicles. It sounds like insurance to me. As Sir Owen Woodhouse pointed out provisions such as these run counter to the community responsibility principle and have no place in the no-fault scheme that accident compensation is meant to be. 
The community responsibility principle recognises that the various activities we undertake in society are interrelated and that benefit and harm flow on to others. The community responsibility principle recognises for example that even though a disproportionately high number of motor vehicle injuries involve motorcyclists a significant proportion of those injuries are caused by someone other than the motorcyclist. The community responsibility principle also recognises that increased use of motorcycles where practicable has environmental benefits if single occupant car usage is consequently reduced as the greenhouse gas emissions generated by motorcycles are significantly less than from cars. 
Experience rating and risk rating run counter to this principle. The experience rating of employers was found to have negative impacts when it operated in the 1990s. In particular it had a negative financial impact on the accident compensation scheme. More funds were paid out in levy rebates resulting from positive experience ratings than were received in loadings on levies due to negative experience ratings. It seems particularly bizarre that when the Government is attempting to paint a picture of financial strife in the scheme it proposes to introduce a policy that will have a negative impact on its financial performance. 
The formula for experience rating changed each year in an attempt to address the above problem resulting in year-to-year uncertainty for employers. Experience rating placed pressure on Accident Compensation Corporation staff to remove costs by moving claims from the work account to other accounts and increased the likelihood of employers contesting whether an injury was a work injury with the resultant uncertainty and delays in cover and rehabilitation for the injured person. The Accident Compensation Corporation was required to spend significantly more time and money in defending cost allocation through the dispute resolution process rather than focusing on the rehabilitation of claimants. 
I come now to the principle of comprehensive entitlement. Maryan Street has already spoken a little about the issue of the removal of cover for hearing loss. The removal of the right to be covered by accident compensation for people who suffer a hearing loss of less than 6 percent erodes one of the core Woodhouse principles upon which the scheme was founded—that of comprehensive cover. 
Hearing loss has only ever been covered by the scheme if it has been caused by an accident by the work environment of an employee or by medical treatment. A claimant does not get accident compensation cover if it is caused by a natural process or by disease or infection. But even if hearing loss is caused by an accident or by the work environment this bill will deny accident cover to someone who is only a little bit deaf due to that cause. 
The Transport and Industrial Relations Committee heard from very many submitters who said that a 6 percent hearing loss is very much more than just being a little bit deaf. So claimants with low-level hearing loss caused by industrial deafness will have to meet the cost of hearing aids and any other costs arising from it themselves even if their overall hearing loss attributable to all causes is significant. This is like denying people cover if they have only small fractures or only minor ligament damage. Given the stocktake now under way this has the potential to be the thin end of the wedge for removing cover for injuries that are considered minor. In going down this path what is next? Who is next? Will a person be denied cover if he or she has only a small fracture? 
The disentitlement provisions of this bill also erode the principle of comprehensive entitlement. The Minister has made much of the disentitlement provisions in relation to criminals. I made the point at the select committee and I make it again now that the disentitlement for this category of persons amounts to a double penalty. A person who commits a crime is punished for his or her crime. The punishment is proportional to the crime the person commits. By denying people cover from injury rehabilitation and compensation that person is effectively punished a second time but punished in a way that is disproportionate to the crime they have committed whereas the “repugnant to justice” provision in the existing law actually deals with that perfectly adequately. 
I want to talk about the disentitlement resulting from intentional self-harm or suicide because at the very core of accident compensation is the principle of no fault. The punishment that this bill seeks to impose on the families and dependents of those who have harmed themselves at their own hand is a fundamental breach of that no-fault principle. 
I come now to the principle of complete rehabilitation. I agree with the ACC Futures Coalition that the existing vocational independence provisions are already a breach of the Woodhouse principle but the provisions in this bill take that breach further and rip it further apart. The bill removes the requirement that the vocational assessment of suitable work takes into account a claimant’s earnings before his or her incapacity and we have already heard about that in this debate. 
A claimant who is earning say $1500 a week before his or her injury will have that weekly compensation stopped if he or she is found to do be able to do some job for 30 hours a week that pays only the minimum wage. This runs counter to the purpose of the Act which is to rehabilitate injured claimants to the greatest extent possible. It is an exercise in cost transfer. It transfers the cost of rehabilitation from the State—from the Accident Compensation Corporation—on to Work and Income to the injured people themselves and to their families. So that is a fundamental breach of yet another Woodhouse principle. 
I come now to the Woodhouse principle of real compensation and in particular to the provisions of the bill in relation to holiday pay and the erosion of cover in the bill for seasonal and casual workers. The bill will result in holiday pay paid on the termination of employment being treated as earnings for the purpose of abating weekly compensation. This proposal is both unfair and an erosion of workers’ rights. Holiday pay accrues in respect of time when a worker subsequently injured has not yet sustained an injury.