Goff Phil: Urgent Debates — Accident Compensation Corporation—Removal of Chair of Board 
Goff Phil: Urgent Debates — Accident Compensation Corporation—Removal of Chair of Board 
[Volume:652;Page:1760] 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. The Minister for ACC moved yesterday to sack the chair of the board of the Accident Compensation Corporation (ACC) Mr Ross Wilson. No good reason was given for that dismissal. Mr Ross Wilson is well regarded across the industry. He is regarded as competent he is regarded as efficient he has more experience arguably than anyone else in New Zealand working in accident compensation and the credits given to him by people including the Association of Salaried Medical Specialists indicate that there was huge confidence in the job he was doing. 
This dismissal mirrors a pattern of dismissal that is appearing under this Government. There was the dismissal of the Chair of the Otago District Health Board Richard Thomson. Richard Thomson was the guy who caught the crooks. The crime had actually happened before he took over the chair. He was dismissed by Mr Ryall. Richard Thomson’s successor when asked whether he would do anything different from what Richard Thomson had done said: “Nothing at all.” That is an exact parallel. Of course there was also the blunder of the Minister of Corrections in trying to sack the Chief Executive of the Department of Corrections in order to put the blame on somebody else where there was no evidence for it and no support. Mr Wilson’s dismissal is part of a trend of an arrogant Government that wants to remove anybody who might have a different view a different outlook or a different perception from that of the Government. 
What was the dismissal of Ross Wilson really about? If it was not about his competence if it was not about his efficiency and if it was not about his skill and experience why was he dismissed? He was dismissed for two reasons. Firstly it was part of the National Government’s effort to remove any obstacle to cutting the benefits of accident compensation. It wants to cut the benefits of accident compensation because it wants to privatise ACC—to pass it over to the private sector as a profit-making organisation. That is on the record. Merrill Lynch—and I ask who worked for Merrill Lynch once upon a time—last year let the cat out of the bag that National would do just that long before there were any reports about any problems or deficits. It let the cat out of the bag saying here was a big opportunity for the Australian insurance companies. Yes it is a big opportunity for the Australian insurance companies because National’s goal is to let overseas insurance companies come into New Zealand and pick out the eyes of the profitable parts of accident compensation. The inevitable consequence of that will be a system that is weakened and that does not deliver to New Zealanders the benefits the entitlements and the coverage they need. 
We have seen a consistent attempt made by Nick Smith to undermine the credibility of accident compensation. First of all he said that the deficit in the non-earners account was because Labour Ministers had suppressed it. National members were so confident that they set up a ministerial inquiry. The problem with the ministerial inquiry was that it found no fault whatsoever with the actions of Labour Ministers. It stated that Treasury should have included the deficit in the Pre-election Economic and Fiscal Update. It made no findings whatsoever against Labour Ministers. So tactic No. 1 failed. Tactic No. 1 failed but tactic No. 2 was to try to frighten New Zealanders into accepting major cuts in accident compensation coverage. That was why Nick Smith went out and talked about the motor vehicle account requiring an increase in vehicle registration fees of $500. He talked about a figure of $500. Then today he said that it would be over 5 years. What was the increase? It was $31. Again the tactic is exposed for exactly what it is—an effort to frighten New Zealanders into accepting cuts to the basic entitlements that are needed for us to have a fair and just system of accident compensation. 
It is quite clear that we have the best system of accident compensation anywhere in the world. A 477-page report from PricewaterhouseCoopers said just that. It made the point that accident compensation is serving the public better than any comparable scheme in the world. But still National wants to gut the basic entitlement to a fair system of accident compensation. I would direct the Minister—if he is interested but he will not be—to read an article written by the Rt Hon Edward Thomas a former Court of Appeal judge who gave this summary about what PricewaterhouseCoopers found. He stated that the survey “establishes that ACC leads in having higher coverage a greater range of benefits higher benefit levels lower administration costs lower premium levels a lower rate of claims disputes less delays in claim resolution better return to work outcomes and significantly superior long-term rehabilitation services.” What is it about that that Nick Smith does not understand? This system is a world-class system serving New Zealand well and giving extensive coverage at a lower cost than any other country in the world does. 
We have only to look across the Tasman to see what is happening there. Employer levies are 250 percent higher per wages earned than those in New Zealand. Let us have a look at what PricewaterhouseCoopers—[ 
Interruption 
] The Minister disputes this. Let us have a look at what the 2008 report found. In New Zealand it costs 78c per $100 of workers’ wages to fund workplace accident compensation—78c per $100. In Australia it costs $2 per $100 of workers’ wages. Does the Minister accept that? He has to; it is a fact. In New Zealand 88 percent of people return to work within 6 months of being injured. In Australia the figure is lower—85 percent. In New Zealand the cost of managing accident compensation claims is 8 percent of total expenditure. In Australia the cost of managing claims ranges from 9 percent to a whopping 32 percent. In New Zealand ACC disputes 0.2 percent of workplace injury claims. In Australia on average 9 percent of workplace injury claims are disputed by accident compensation providers. 
Most people think that if a system is working we should not tamper with it. The reason that the National Government wants to tamper with this system is to cut the benefits that are available to ordinary working New Zealanders who rely on this system to the extent of making 1.7 million claims a year. These people are ordinary New Zealanders who deserve a fair go. Dr Smith is telling us that he is going to push back the entitlements that the Labour Government legislated for. 
Hon Dr Nick Smith 
: But never funded—but never paid for them. 
Hon PHIL GOFF 
: That is nonsense. The Law Society said that what Labour had effectively done was to remove the anomalies in the system—to remove the unfairness and to give people access to just outcomes. I will give Dr Smith an example of one person who suffered under the old system—which was the reason we changed it—in terms of mental trauma. His name is Terry Bristowe. He is a former engine driver. He is a 62-year-old grandfather. He was unfortunately involved in two fatal accidents when he was driving his locomotive. Two pedestrians walked across the line in front of the train. One was a 19-year-old and one was in his mid-twenties. After the first accident he suffered 3 months of trauma during which time he stayed at home but he decided to return to work. The second accident happened in December 2002 when he hit a man on the Woburn line and killed him. After the second accident he could not return to work. 
Is Dr Smith telling the House that Mr Bristowe is one of the people who will no longer be entitled to the full range of benefits under accident compensation? Is he telling the woman who was set alight as a result of medical misadventure when she was undergoing a Caesarean—the anaesthetic caught fire—that she will not automatically be covered under accident compensation? Is he telling victims of rape that they will not be entitled to counselling for mental trauma—one of the changes that Labour introduced? Is Dr Smith telling the people of New Zealand that they will no longer get lump-sum payments for accidents that they have suffered? Lump-sum payments go back to the original Woodhouse commission scheme. They were part of the contract but they were ripped out of it by an earlier National Government. Tories never change their spots. They are at it again. Labour brought back lump-sum payments. I want Dr Smith to rise to his feet and say why justice should not be delivered to the decent ordinary hard-working New Zealanders who have those particular entitlements. 
Dr Smith would like to say that the increase in liabilities is because of inaction or inappropriate action by the ACC board. Dr Smith knows that is not true. Dr Smith knows that the major factor is that interest rates have fallen and the return on investments has gone down. That has affected not only accident compensation; actually the superannuation fund has been more affected by it. Is the Minister going to dismiss the board of the superannuation fund now? Is he going to suggest that the management of every New Zealand insurance company that is losing money because of the lower return on investments ought to be dismissed? Of course he is not saying that because he is not giving an honest answer about why the board chair has been dismissed. He knows also that some of the increases in liabilities are about changes to the financial reporting system. Those changes do not influence the bottom line at all; they just say that things that were always there but were not added in before have to be added in. There is nothing that this Minister can pin on the chair of the ACC board that in any way suggests inappropriate incompetent or inefficient handling. 
What Dr Smith wants to do along with the rest of the National Government is carve back the benefits that New Zealanders enjoy because they need them as a matter of social justice. Is Dr Smith telling the 400000 seasonal workers that they will have to go back to a system where their compensation is calculated in a way that disadvantages them in terms of the income support they receive? Is that what Dr Smith is telling the country? He needs to be upfront. When Dr Smith gets to his feet he needs to tell us the country why he wants to hive off aspects of accident compensation to the private sector to enable it to make profits at the expense of the system. 
The last time that happened the Department of Labour produced a report on it—the Blue Lotus report. That report demonstrated quite clearly that a greater amount of money was being spent on administration that more payments were being wasted and were not going to the victims of accidents that insurance companies were late in making payments and that the system was not working as well as the system that it had replaced. It was a clear report. It demonstrated that privatisation did not work for the taxpayer and did not work for the consumer. It worked for the private companies; they made money out of it. But where was that money coming from? It was coming from the benefits the entitlements and the coverage that New Zealanders who are injured at work would otherwise have got and it was coming at the expense of the employers. Even the employers know that if they lose the accident compensation system as it was set up then they will be worse off. The levies on employers will be higher the costs to workers will be higher and the costs to motor vehicle owners will be higher. 
If it works do not fix it. Our accident compensation system is fundamentally sound and the ACC board has been appropriate in its actions and its governance of the scheme and the claims that Nick Smith makes about that are quite incorrect. This is not a system that is failing to deliver to people. Dr Smith is promising New Zealanders lower entitlements at greater cost. That argument cannot be sustained.