Sepuloni CarmelINCOME INSURANCE SCHEME (ENABLING DEVELOPMENT) BILLFirst ReadingHon CARMEL SEPULONI (Minister for ACC) on behalf of the Minister of Finance: I present to the House a legislative statement on the Income Insurance Scheme (Enabling Development) Bill.ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon CARMEL SEPULONI: I move That the Income Insurance Scheme (Enabling Development) Bill be now read a first time. The Government working alongside Business New Zealand and the New Zealand Council of Trade Unions has consulted on an income insurance scheme to support workers who lose their jobs through no fault of their own. More than 100000 New Zealanders lose their jobs every year and more when we go through an economic shock like COVID-19. It's often difficult for people to find work that matches their skills after a redundancy and they end up taking lower-paid jobs. This wage-scarring costs our economy more than $15 billion per year. It makes it more difficult for our employers to get the skilled workers that they need but it also causes hardship for individuals families and whānau and disproportionately impacts low-income Māori and Pacific households. An income insurance scheme like the one we have consulted on has the potential to deliver three key benefits to workers and employers across the labour market. First we want to minimise the immediate financial impact of a sudden job loss for workers and their families. Second we want to support workers back to good jobs by ensuring they have income in the period immediately after job loss. Instead of being forced to take the first job offered we want workers to have time to find the right job for their skills or to retrain for a new fulfilling career path. Third we want to support the economy to adjust more rapidly to shocks and downturns. In February this year we asked New Zealand to give us feedback on a detailed proposal for a New Zealand income insurance scheme. It is important that we hear the views of New Zealanders about the proposed scheme how they think a scheme should be designed how it should be operated and of course how a scheme might impact them. Consultation finished in late April and we are currently working through the many submissions and pieces of feedback we received. New Zealand is one of a small number of countries that does not currently provide a social insurance scheme for job loss due to redundancy or health conditions and disability. However New Zealand has operated a successful accident compensation scheme for 50 years on a social insurance basis. ACC has proven they have expertise in delivering a successful social insurance scheme. They have been identified as an agency that could deliver a scheme if Government decides to establish one. However ACC is currently prevented from working substantially on the development of a new scheme by the Accident Compensation Act 2001 which prohibits ACC from undertaking work that does not relate to the purposes of the accident compensation scheme. The Income Insurance Scheme (Enabling Development) Bill will enable ACC to set up a strong implementation process for a New Zealand income insurance scheme using funding provided in Budget 2022 most of which has been set in contingency pending a decision on whether to establish a scheme. The bill does not commit the Government to proceed with or to use ACC as the delivery agency for the scheme but simply provides ACC with a function ring-fenced from its existing functions relating to the development of the scheme.As Minister for ACC I see the benefits for New Zealanders from an income insurance scheme delivered by ACC. It has experience unmatched in New Zealand when it comes to delivering social insurance. As the Minister for Social Development and Employment and Minister for Disability Issues I see the benefit of an income insurance scheme in helping to address some of the discrepancies between the ACC scheme and our health and welfare systems. The income insurance kaupapa would sit alongside and complement not replace the work the Government is doing in my and other Ministers' portfolios to transform the health disability and welfare systems. A wide range of Government agencies and Ministers have been involved in the development of the income insurance proposal. I want to thank all of them for their involvement and assure New Zealanders that we will continue to work across portfolios to make connections between this and other system transformation kaupapa. I also see benefits to ACC if a scheme such as this is added to their portfolio. Ensuring and supporting workers who lose a job due to a health condition or disability will broaden the current focus on injuries and accidents and allow a wider view of workers' needs and the economies of scale from operating two such similar schemes are significant. I note though that no final decisions have yet been made to establish a scheme or about an agency to deliver it. Government expects to decide on whether to establish a social insurance scheme by July including whether to use ACC as the delivery agency. The bill will establish new legislation an Income Insurance Scheme (Enabling Development) Act. The Act will either be replaced when legislation is passed if legislation is passed to establish an income insurance scheme or it contains a sunset clause ensuring that it will be repealed by 31 March 2025 if the scheme does not go ahead. ACC already has the operational expertise to operate an income insurance scheme. A key provision of the bill is clause 9 which establishes a new function for ACC: to carry out all work reasonably required for it to be in a position to bring an income insurance scheme into operation."The bill also includes information-sharing provisions which are necessary for ACC to establish and test information-sharing systems for the scheme. These provisions are needed so that ACC can develop system requirements that are effective and provide appropriate protections for personal information once the scheme is up and running.The bill recognises the Crown's responsibility and commitment to Tiriti o Waitangi / Treaty of Waitangi principles. These must be front and centre in any work ACC does to develop a scheme. The way a social insurance scheme is developed and operationalised will have significant implications for Māori employers and workers and their whānau hapū and iwi. Māori currently experience disadvantage in the Labour market including being more likely to be made redundant than any other workers. The provisions which primarily require ACC to engage with Māori and be purposeful in developing a scheme that will work for Māori are necessary to ensure that if a scheme is developed it will help reduce these inequities.New Zealand workers employers and the wider economy have for too long lacked the support that a social insurance scheme can provide. Almost every other developed country has a long history of providing a social insurance scheme to protect workers help employers find the workers best suited to their requirements and support the economy during economic shocks. This Government thinks now is the time for New Zealand to join those countries and has consulted on a proposal for a scheme to do so. If a decision is made to progress such a scheme ACC must be involved in that work from day one. The bill enables this. I commend this bill to the House.ASSISTANT SPEAKER (Ian McKelvie): The question is that the motion be agreed to."