Bradford Sue: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
Bradford Sue: Injury Prevention Rehabilitation and Compensation Amendment Bill — First Reading 
[Volume:658;Page:7437] 
SUE BRADFORD (Green) 
: 
 The Green Party will oppose the Injury Prevention Rehabilitation and Compensation Amendment Bill at every step of the way. I am really sorry that National has chosen to stick to its ideological guns and once again begin the process of readying the accident compensation scheme for privatisation by cutting back entitlements and raising some levies unreasonably. 
In almost every respect this bill is a shocker and I hope all affected individuals and organisations will feel moved to make clear strong submissions to the select committee. Some of those impacted by the Government’s attacks on the accident compensation scheme notably sexual abuse survivors and those who work with them and also motorcyclists are very effectively filling MPs’ in-boxes and holding rallies already. But many more people are and will be affected than the people in those two sectors. Accident compensation is something most of us prefer not to think about until we are in a situation where we have had an accident or injury ourselves. Then suddenly it becomes a serious business in terms of whether we are eligible for cover and support and if so for how long and in which ways. Slashing people’s entitlements and making changes in the way that vocational rehabilitation works will have insidious impacts that will undermine the health and well-being of many New Zealanders for a long time to come. 
The fundamental problem with the bill in front of us today is that it is based on a false premise. The National Government has deliberately manufactured a crisis and even before the time of the shift to the new board chairmanship early this year National was cooking up this diabolical brew. All through 2009 and with accelerating intent National has been creating the notion that the accident compensation scheme has an impossibly huge deficit that its liabilities have blown out and that the only things that will save us all from impossibly huge levy rises are measures like those contained in this bill and the readying of the accident compensation scheme for partial or full privatisation. The major reason for the so-called liability blowout is not costs although there is no question that costs are continuing to rise but rather it is the change in the assumptions underlying the accounting and forecasting practices of the Accident Compensation Corporation (ACC). 
The big mistake that Labour made was to push for the full funding of potential liabilities by 2014. That was the first step on this slippery road. The one thing that National is doing that we do support is pushing out the date for fully funding the residual claims liability to 2019 although the Greens actually believe that if we are to have an honest conversation about accident compensation as the Prime Minister proposes we should look seriously at the possibility of returning completely to a “pay as you go” system. Full funding ahead traps the scheme and the Government in a private insurance accounting model. On top of that the ACC board had changed some of its other accounting methodologies. For example $1.3 billion has been added through claims experience and modelling changes $1.3 billion for revised economic assumptions $500 million for adding more safety to the risk margin and $1.3 billion for the cost of “future Cabinet and regulated rate increases” whatever that means. I thank last week’s excellent  
New Zealand Listener 
 editorial for that compilation of figures. 
At the same time as the ACC board and the Government continue to push the line that the scheme is impossibly in the red in fact this year its revenues were $4.5 billion which is $1.5 billion more than it spent on claims. As some experts keep saying—sadly like voices lost in the wilderness—ACC is a mature organisation with enough reserves to pay for around 3½ years of claims. That is the highest level of reserves the scheme has ever held. Sir Owen Woodhouse famous for the principles on which our current accident compensation scheme is founded has stated clearly that he did not intend it to be pre-funded and that the latest Government moves are beginning to undermine its very heart. 
The report of the Woodhouse commission recommended a 24-hour-a-day no-fault compensation scheme that covered people whether they were injured at work at home at play or on the roads. The underpinning Woodhouse principles are community responsibility comprehensive entitlement complete rehabilitation real compensation paid at 80 percent of previous earnings for as long as a person is incapacitated and administrative efficiency. An injury prevention rehabilitation and compensation scheme that at least strives to live up to those principles is what is at stake here today. The bill in front of us hacks into those fundamentals in a variety of ways only some of which I have time to mention here. 
One of the most pernicious changes is in relation to vocational independence assessments. They are used by ACC to decide whether a claimant who is receiving compensation is fit to return to work. Once people are considered to be ready to go back to suitable employment their weekly compensation is stopped within 3 months or sooner of course if they start a job. The bill removes the requirement that the vocational assessment takes into account what a person earned or did before the injury and reduces to 30 hours the minimum number of hours that the person can be assessed as being able to work per week. That means in practice that someone who was earning say $1500 a week before an accident will lose his or her weekly compensation if he or she is found to be able to do a job for 30 hours a week for the minimum wage—that is $375 a week. It does not matter that the job might be to do something far below the person’s experience education or capability. 
The broader impact of lowering the bar in this way is that overall people will be pushed out of the system a lot more quickly. For a number of them that does not mean necessarily that they will get a job but simply means that they will be forced into the benefit system or in the worst-case scenario which happens quite often they will end up with no work and no income because their partner is in paid employment. 
A second major area of concern for us is of course the many disentitlements that the bill contains. The cuts to sexual abuse counselling are one of the meanest attacks on people’s well-being and are deeply ironic when one considers National’s and ACT’s rhetoric about providing support for the victims of crime. That change in accident compensation policy is a deliberate reinterpretation of the law aimed at ensuring that only those sexual abuse survivors who are diagnosed as having a mental illness will receive financial assistance from the scheme. That will mean that many people who until now have had support will no longer get it. Many sexual abuse survivors simply will not seek cover and counselling for fear of the stigma of being labelled as being mentally ill. Others will go through the process and will find that they do not receive cover anyway which in some cases will actually increase the likelihood that they will go on to develop severe mental illness or even end up committing suicide in the future. 
On the subject of suicide I say this bill also goes as far as to end accident compensation entitlements relating to wilfully inflicted self-injury and suicide. That means that in future a suicide victim’s family will receive entitlements in only the very narrow circumstances of the victim’s mental injury being caused by sexual abuse or as a result of a physical injury or by a traumatic event in the workplace. The suicide victim will also need to have already gone through the process of having his or her claim for mental injury approved under the accident compensation scheme before his or her family can get any entitlement. It will not matter whether the victim was incapable of forming a rational intent or whether the suicide was caused by some abject failure of the mental health services to provide appropriate care and treatment. This law change will impact deeply on affected families especially low-income family and whanau at a time when they are most desperately in need of support. 
These disentitlements and others are why I simply cannot understand the Maori Party’s support for this legislation. Cutting back on who receives accident compensation and on how long people receive it for and lifting motorcycle levies by monstrously huge amounts will in different ways have a very damaging impact on people on low wages and benefits—a population among which sadly Maori are disproportionately represented. 
Instead of raising levies and cutting back on a whole range of entitlements we should be having the honest conversation that Mr Key referred to. For example let us talk seriously about a “pay as you go” scheme. If we reverted to that levies could be reduced in the short term because the accident compensation scheme would no longer have to add to its investment. In moving to full funding the Government is effectively borrowing in order to invest with the inherent risk of further losses being caused by investing as happened last year when the global financial meltdown added about $1.6 billion to the scheme’s liabilities. Reverting to a “pay as you go” scheme would simply mean that we would go back to seeing the scheme as being part of the functioning of the Government just as we do the provision of benefits and pensions health care and education. The reserves that have already been built up could be used to smooth out future levy increases.