Locke Keith: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
Locke Keith: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
[Volume:634;Page:6010] 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting the Injury Prevention Rehabilitation and Compensation Amendment Bill. I would like to make a few comments on behalf of my colleague Sue Bradford who is our spokesperson on this area. The Green Party welcomes the introduction of the bill. The new bill is short and unusually simple for anything related to accident compensation. It corrects two glaring anomalies in the current legislative framework. We are pleased to support the bill going to a select committee and through all its stages. 
The most significant provisions are contained in clauses 4 to 11 which have the effect of combining the employers’ account and the self-employed work account into one account to be called the work account. This is an undoubtedly sensible move. The existence of these two systems side by side has created anomalies in that people carrying out what are essentially the same business activities have their accident compensation levies based not just on the injury risk of those activities but on the structure of their business. For example there is no good reason why a self-employed builder pays an accident compensation levy different from that paid by a company established by another builder that employs him or her as its sole employee—the injury risks are the same. That type of discrepancy is the sort of inequity that was inherent in the National Government’s misguided workplace injury insurance privatisation experiment of the late 1990s. 
It is unfortunate that we have had to wait 6 years to see this particular inconsistency rectified. I can certainly understand the Government’s wish to address the anomaly promptly now to ensure it does not carry forward into the 2007-08 tax year. However I question why it has taken so long to introduce this simple bill. The delay has meant that a transitional provision is now required in clause 15 to bypass the consultation process required by section 331 of the Injury Prevention Rehabilitation and Compensation Act in setting the work account levies for 2007 and 2008. Appropriate decision-making involves consultation with stakeholders and section 331 reflects recognition by Parliament of this principle. Under clause 15 no consultation with employers and self-employed people will be required in setting the 2007-08 work account levies. That is a direct and unfortunate consequence of the belated introduction of this bill. That said the Green Party does not wish to see the anomaly continue into a further tax year so despite our reservations regarding the transitional provision dispensing with consultation over levy setting we support the commencement date of 1 April 2007 proposed for this bill. 
The second major feature of this bill is clause 12. This clause renames the medical misadventure account the treatment injury account. Medical misadventure cover was replaced by treatment injury cover under a previous amendment effective from 1 July last year. Because Sue Bradford did not sit on the select committee dealing with that bill at the time the Greens are somewhat unsure as to why the account was not renamed then. We imagine it was a drafting error. However better late than never and the Green Party supports this issue being rectified especially now that health-care providers are familiar with the new system. 
One of the aspects of the new bill we are most pleased about is the fact that many of New Zealand’s around 250000 self-employed people should have their accident compensation costs cut as a result of the merger of the employers’ account and the self-employed account. When Sue Bradford was involved in the two initial accident compensation reforms bills back in 2000 the Green Party had a strong position of seeking to make sure that the interests of the self-employed including farmers were represented in that legislation. In July this year self-employed people were subject to a 10 percent increase in their levies taking them to $3.54 for the first $100 of earnings. This happened at the same time that the employers levy remained at $1.21 for each $100 of payroll. In an agricultural society for example livestock farm employees pay about $2.56 for each $100 of employee income while self-employed livestock farmers pay between $3.93 and $4.66 per $100. The gap between what the self-employed pay and what employers pay has continued to widen assisted by the fact that the pool of self-employed people is decreasing which means their levies keep rising exponentially. This is why merging the accounts will be a big help in equalising and lowering costs for the self-employed. They will also have the option of taking out CoverPlus Extra if they want the additional protection that that provides. 
I acknowledge that levies will go up for some—for example those working with chemical products in aged care or in ambulance services—but I am relieved by reassurances that the number of self-employed people affected is not large and that the Accident Compensation Corporation will smooth and cap any increases at 25 percent a year. 
The Green Party is pleased that we are removing what has become today an anachronistic separation between the employers’ account and the self-employed account and that what appears to be a drafting error—the misnaming of the medical misadventure account—will be corrected. Many changes of a far more substantive nature could and should be made to the administration of the accident compensation system in this country but meanwhile the Green Party supports the small steps forward in this bill.