Woodhouse Michael: Questions for Oral Answer — Questions to Ministers 
Woodhouse Michael: Questions for Oral Answer — Questions to Ministers 
[Volume:652;Page:1621] 
5.  
MICHAEL WOODHOUSE (National) 
 to the  
Minister for ACC 
: What reports has he received on what impact the shortfalls in ACC compensation will have on levies? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 I am advised that based on the latest valuations and no change in legislation or policy the earners levy would need to increase 186 percent from $1.40 to $4 per $100 of earnings the motor vehicle levy would need to increase 129 percent from $255 to $585 and the employers’ levy would need to increase by 71 percent from $1.26 to $2.16 per $100 of earnings over the next 5 years. 
Michael Woodhouse 
: What impact would these levy increases have on the average family or employee? 
Hon Dr NICK SMITH 
: The average household income is $67000 and on average it has two cars. Based on no change in policy or law this family’s motor vehicle and earners levy would increase by $2400 per year or $46 per week by 2013-14. In the case of an average employee with a private motor vehicle the increase would translate into $1400 per year or $27 per week. Clearly these increases are untenable and that is why the new Government says change is required. 
Hon David Parker 
: Why has the Minister not already adopted Labour Party policy and extended the date for full funding of historic claims from 2014 to 2019 which the Accident Compensation Corporation (ACC) estimated in the briefing to incoming Ministers would reduce employer levies in the coming year by 20 percent and motorist levies by around 25 percent or about $80 per annum? 
Hon Dr NICK SMITH 
: I note that Labour had 9 years to make that change and did not do so. The second point I would make is that the member’s numbers are wrong and do not include the latest PricewaterhouseCoopers report. The third point I would make is that changing the date has a minimal effect on the earners account which is the account that will affect workers most adversely. The last point I would make is that by changing the full funding date we do not address the underlying issues; all that we do is shift the debt on to the Crown’s balance sheet. We have to address the underlying cost drivers that were out of control under the previous Government. 
Michael Woodhouse 
: Can the Minister—noting he has announced the levies for employers and earners for this year—advise the House when he will announce the levies for motor vehicles for this year and what impact the latest valuation has on this levy? 
Hon Dr NICK SMITH 
: The Department of Labour has advised that I need to increase the motor vehicle levy this year from $255 to $376 in order to fully fund the scheme based on these latest valuations. This increase is untenable in the current economic environment. I am looking at an amount that is significantly less although an increase is inevitable— 
Hon Maryan Street 
: The remedy lies in the Minister’s own hands. 
Hon Dr NICK SMITH 
: The greatest remedy which the previous Minister for ACC does not recognise is that her reckless management of the accident compensation scheme translates into very large costs for ordinary New Zealanders and she should be ashamed of herself. 
Hon David Parker 
: What accident compensation and rehabilitation services currently received by injured New Zealanders does the National Government intend to cut? 
Hon Dr NICK SMITH 
: We need to have an open dialogue with New Zealanders about how extensive we want accident compensation cover to be relative to the costs because a $2400 increase per family is unacceptable. It was all very well for the previous Government to extend the scheme but somebody has to pay for it. Ultimately if the costs double—as they have done—that translates into a doubling of levies and that is something this Government is not prepared to contemplate. 
Michael Woodhouse 
: What changes is the Minister proposing to make to try to contain levies— 
Hon David Parker 
: I raise a point of order Mr Speaker. I apologise for interrupting my colleague but once again we had Dr Smith taking the opportunity to give the House a speech in response to a single-faceted question. If that is to be the rule of this House that is fine but I will certainly be one member who loads my questions to that Minister with 10 or 20 parts in order to have the same rights in this House. 
Mr SPEAKER 
: The member has made his point. It is unfortunate that he interrupted another member asking his question. If the member is going to make a point of order I ask him to please do so as soon as the Minister has finished answering. I ask Dr Nick Smith to try to keep his answers a little more brief because it is hard for me to ask members asking questions to be more succinct in their questions if the answers are too long. I ask the Minister to respond more briefly. 
Michael Woodhouse 
: What changes is the Minister proposing to make to try to contain accident compensation levies and costs? 
Hon Dr NICK SMITH 
: Significant changes will be required to ensure the ongoing viability of accident compensation. A process is under way to reconfigure the board so as to strengthen its financial governance. Officials and ACC are reviewing the recent entitlement extensions and changes like the one I have mentioned in respect of physiotherapists. I also propose legislative change to push out the date of full funding and to enable better cost management of accident compensation.