Hague Kevin: Injury Prevention Rehabilitation and Compensation Amendment Bill — Second Reading 
Hague Kevin: Injury Prevention Rehabilitation and Compensation Amendment Bill — Second Reading 
[Volume:660;Page:9059] 
KEVIN HAGUE (Green) 
: 
 Sir Owen Woodhouse is a truly great New Zealander. He is one of New Zealand’s foremost jurists of all time and the architect of a visionary accident compensation scheme that has been the envy of the rest of the world. Yet at the age of 91 when he should be enjoying a well-earned retirement Sir Owen has found himself sufficiently concerned by the flawed reasoning behind the Injury Prevention Rehabilitation and Compensation Amendment Bill that he felt it necessary to put himself back into the public spotlight to condemn it. Sir Owen’s vision for an accident compensation scheme was that of a no-fault scheme based on the principles of community responsibility comprehensive entitlement complete rehabilitation real compensation and administrative efficiency. He recognised that the various activities we undertake in society are all interrelated and that the benefits and harms of each flow on to others rather than resting solely with those people undertaking the activities. Sadly Sir Owen’s vision came under attack from vested interests almost from day one. Politicians responded to their lobbying and began to compromise the principles that Sir Owen had set out and the accident compensation scheme we have today is littered with inequities. 
This bill will significantly heighten those inequities. It is entitled the Injury Prevention Rehabilitation and Compensation Amendment Bill. The truth is that it will amend injury prevention rehabilitation and compensation by slashing each of them. It proposes a range of cuts to the scheme’s cover and entitlements and imposes funding requirements for the scheme that necessitate massive levy increases. In other words people pay more and get less. The seeds of this inequity were sown back in 1998 when the National-led Government of the day decided to open up the scheme’s work account to private competition from the insurance industry. To ensure the private insurers could compete that Government changed the scheme’s funding model for claims from a “pay as you go” model to the full pre-funding of claims that is required of insurance companies. The privatisation experiment of the late 1999-2000 period was a disaster for claimants as the easiest way for private insurers to maximise profit was to deny legitimate claims in the knowledge that many claimants would have neither the resources nor the energy to contest their decisions. Of course some employers did not mind that either as it helped to keep their premiums down. The incoming Labour-led Government with the support of the Green Party promptly reversed National’s ill-fated privatisation experiment. Unfortunately we were unable to persuade Labour to return to a “pay as you go” funding model. That has now given the National Government an excuse for this pernicious bill. 
Despite the huffing and puffing from Minister Smith there is no funding crisis in the Accident Compensation Corporation (ACC). The corporation took in $1.5 billion more in levies last year than it paid out in claims. The so-called funding crisis is purely a creature of accounting arising from the fully pre-funded model. Return to “pay as you go” which was how Sir Owen Woodhouse always envisioned the scheme should be funded and the crisis disappears. Return to “pay as you go” and levies would decrease rather than increase in the short term. Return to “pay as you go” and there would be no need for the mean-spirited cuts to entitlements and cover that are contained in this bill. They are cuts that will see the cost of injuries transferred from ACC to the public health system and to injured people and their families. We do not need our education system to be funded on the basis that when a child starts preschool all the money has to be in the bank for his or her education through to tertiary level. We do not fund our public health system on the basis that when people are diagnosed with a chronic illness all the money has to be in the bank for their future treatment right through until they die. 
I see no reason that ACC should be any different; unlike an insurance company the Government has the power to tax. I acknowledge that it is beneficial for ACC to have some reserves to mitigate wild increases in levies that would be necessary in the event of a natural disaster—for example a major earthquake affecting an urban centre. But there is already over $10 billion in ACC reserves and that is ample for that purpose. As the select committee report states most submitters indeed almost all who expressed a view on funding mechanisms opposed full funding of accident compensation preferring a return to “pay as you go” funding. These 33 organisations and individuals included the ACC Futures Coalition the New Zealand Council of Trade Unions the National Council of Women the Service and Food Workers Union the Maritime Union the Rail and Maritime Transport Union the New Zealand Christian Council of Social Services the New Zealand Nurses Organisation FinSec the Public Service Association the Bikers Rights Organisation of New Zealand and most tellingly the retirement policy and research centre. 
Despite ACC having deviated somewhat from the Woodhouse principles there is still widespread satisfaction with the services it provides. That is likely to change under this bill. People become disgruntled if they have to pay more but also if when injured they get less. I fear however that that is precisely what this Government wants. I fear this bill is part of a plan to undermine public confidence in our accident compensation scheme and thereby soften up public opinion for privatisation of at least parts of the scheme or as Minister Smith euphemistically calls it “introducing private competition into the scheme”. Privatisation of accident compensation was supported by business lobbyists back in the 1990s. However having experienced it in the 1999-2000 period their enthusiasm has waned too. In October last year Paul Jarvie occupational health and safety manager for the Employers and Manufacturers Association (Northern) Inc. said: “The single year when we had a private market for ACC turned into a bun fight between insurers trying to capture business and employers trying to get accident insurance within prescribed time frames. Insurers at the time cut premiums to capture market share early on. Most commentators agreed at the time that the ensuing years would have seen large premium increases to offset the low entry price points. Having a full private insurance market won’t provide stability in the premium setting market and it would make more forecasting and budgeting work for employers.” 
With employers less than enthusiastic about the privatising of accident compensation who wants it? The unions do not want it and claimant advocacy groups having experienced the rigours of 1999-2000 do not want it. I guess that leaves the ACT Party whose members nod their heads in Pavlovian automatism every time the word “privatisation” is mentioned and of course the insurance industry. Back in 2005 a memorandum from the Insurance Council to its industry members was leaked to the media. It stated: “Attached is a statement made today by the National Party on its Accident Insurance policy. It indicates competition will be introduced into all accounts except the non-earners account. This obviously means the motor account will be opened along with the earners and self-employed. The details of the policy have been deliberately kept out of the announcement after consultation with the Insurance Council.” That suggests government of the very worst sort. It suggests decisions may have been made not in the interests of this country but as a result of secret deals with corporate interests who very likely but we will never know were significant contributors to the National Party’s election coffers. 
Whatever the motivation behind the National Party’s smoke and mirrors exercise to manufacture a crisis in accident compensation the Green Party will continue to oppose this mean-spirited bill and work towards the restoration of the Woodhouse principles and the fundamental right to a fair go upon which our accident compensation scheme was founded. Thank you.