Little Andrew: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers[Sitting date: 10 March 2015. Volume:703;Page:2031. Text is incorporated into the Bound Volume.]1.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his comment that “no one’s arguing that we’re not working as fast as we possibly can” to cut ACC levies given ACC the Ministry of Business Innovation and Employment Treasury the Employers and Manufacturers Association and Infometrics are among those recommending bigger cuts?Rt Hon JOHN KEY (Prime Minister): I stand by my full statement in the interview which included “So we’ve cut over $1 billion in levies so far and we’re on track to cut more.” We did tidy up the mess we inherited from Labour—that is certainly true—but if you look at it in the early days when we were first in Government ACC wanted to massively increase its levies. It wanted to take them through the roof and as Cabinet we said “Well no I don’t think that makes sense.” So there is often a differential between what ACC thinks and what we can afford.Andrew Little: Given it is affordable and it is what ACC wants why not cut levies by $350 million a year now rather than make vague promises to cut them in the future with no time frame?Rt Hon JOHN KEY: The Government receives a recommendation on levy increases or reductions from ACC and then makes a decision based on what it thinks is appropriate. In fact actually it is not—Iain Lees-Galloway: You think ACC is wrong?Rt Hon JOHN KEY: Well actually yes it is wrong sometimes. Just to give you an example in 2010-11 ACC wanted to increase levies by $1.137 billion more than what Cabinet approved. In 2011-12 it wanted to increase them by $165 million more. In fact if you look at the time that we have been in office ACC has wanted to increase levies by $1.302 billion more than Cabinet approved and it has reduced them by $673 million less. Actually Cabinet does use discretion and thank goodness it does.Andrew Little: Is he aware that his overcharging of ACC levies will see ACC add hundreds of millions of dollars a year to reserves that are already well in excess of what it needs and why should that money not stay with businesses and workers instead?Rt Hon JOHN KEY: I do not think that is right. The Government has cut $1 billion from ACC levies so far. It has a $0.5 billion cut planned. We take the best advice and information that we can and assess things. Although I would not want to get ahead of the next levy-setting process indications are that the overall liability might in fact increase slightly over the last year—in fact Cabinet being slightly more prudent about its actions will prove to be right.Andrew Little: Given that his previous Minister for ACC said ACC’s call to cut levies was ignored “because we need to get to surplus” why is it Government policy to use ACC levies which are meant for helping injured Kiwis to fill the hole in his Budget?Rt Hon JOHN KEY: It is not. It is one of the factors that we know flows through to the operating balance before gains and losses—just one of many—but Cabinet makes a decision largely based on what it thinks is affordable and trying to smooth things out. As I said earlier ACC wanted to increase those levies in 1 year alone by $1.137 billion more than what Cabinet approved. The reality is the member cannot have it both ways. He cannot say on the one hand that he does not want levies to go up when that is what ACC recommends and on the other that he does want levies to go down faster when that is what ACC recommends. Either he is a slave to it or he is not.Tim Macindoe: What reports has the Prime Minister received calling for the Government of the time to ignore the ACC board’s recommendations on ACC levies?Rt Hon JOHN KEY: Well fascinatingly enough I have seen a report from October 2009 arguing strongly that the Government should utterly reject the ACC board levy recommendations. Those comments came in a media release issued by the then Amalgamated Engineering Printing and Manufacturing Union National Secretary Mr Andrew Little which shows you can reject the board’s recommendations one year and apparently be a slave to their recommendations another.Andrew Little: Coming to 2015 why does he think massaging the Government’s books is more important than the businesses that will see lower profits the workers who will see lower wages and the 700 people who will be out of a job because of his ACC rort?Rt Hon JOHN KEY: This is a Government that is working alongside business and New Zealanders to produce a strong economy strong growth and a strong small to medium sized enterprises sector all reflected in the fact that our country is growing and doing well. It makes sense actually for the Government to make sure it is sensible about ACC levies so that we are not driving them up massively one year and cutting them by more than we can afford the next year and having to raise them again. The member may be aware that if one looks at the discount rate and what is happening to it in New Zealand and what that might mean to the earnings of ACC and what that might mean to the liability—and actually Mr Parker knows exactly what I am talking about. Let us wait and see what the next recommendation from ACC is.Andrew Little: Is it not time for him to be straight with Kiwis—he is overcharging ACC levies and he knows it business knows it workers know it and he could stop it by ending the rip-off right now?Rt Hon JOHN KEY: If the member wants anyone to be straight maybe the member should be straight and admit that his high horse in Northland went lame and is now tripping over the white flag of surrender that is obviously happening up there. Falling off a high horse in Northland can force ACC levies up. I am fearful that a new charge is coming.