Fenton Darien: Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) — First Reading 
Fenton Darien: Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) — First Reading 
[Volume:644;Page:13946] 
DARIEN FENTON (Labour) 
: 
 The Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) is a bill to be proud of and I congratulate the new Minister for ACC my friend and colleague Maryan Street on its introduction. The bill deals with some of the harder issues for workers facing work-related injury or disease. It keeps pace with the changing world of work and work arrangements and ensures that our world-class accident compensation scheme continues to be fair and sustainable. 
As we head towards the summer holidays when most of us are able to have at least some time off I am particularly conscious that there will be many New Zealanders working during this period. Retail workers hospitality workers care workers transport workers and tourism workers—many of whom are casual and seasonal workers—will all be at work. This is a time when there is a greater risk of work-related injury because of extra workloads longer working hours and fewer breaks. Sadly some of these workers will become work-related injury casualties. But the good news is that we have an accident compensation scheme that is the envy of the world. We can be confident that most workers who find themselves in this situation will be adequately cared for. This Government is committed to ensuring that our accident compensation system is fair and responsive to all. The bill will close the gap for those workers who may in the past have been deprived of fair compensation. The Labour-led Government continues to work hard to eliminate any arrangement where workers can be disadvantaged whether it be in relation to accident compensation or other minimum rights. 
Concerns have been raised that workers whose earnings fluctuate through the year because they are on casual or seasonal employment or some other form of non-standard work are being disadvantaged by the current rules for calculating weekly compensation. Although the current rules continue to meet the needs of people in standard work nearly 21 percent of our workforce or around 457000 people are in non-standard work. If they are unfortunate enough to have a work-related injury the current calculations do not cut it. Weekly compensation is paid at 80 percent of a claimant’s pre-injury earnings. It is intended to provide real and actual compensation so workers can meet their everyday living expenses and get on with their recovery. The reality in today’s labour market for around one-quarter of the workforce is that current arrangements can put these workers at risk of receiving inadequate or no weekly compensation. The bill addresses this by changing the way weekly compensation is calculated for casual and seasonal workers so that the compensation is based on their earning periods rather than on a combination of earning and non-earning periods. This is a particularly welcome amendment given that casual and seasonal workers are more likely than permanent workers to face work injury. I know the amendment will be widely welcomed. 
The bill also makes changes to cover for work-related gradual process disease or infection. The ministerial advisory panel has highlighted that the three-part test is a barrier for cover for payments with a work-related gradual process disease or infection. The burden of proof currently rests with the claimant and this can be hard to meet. The Government’s commitment to making these changes is reflected in the bill. It amends the three-part test of causation to clarify the threshold of allowable non-work exposure. In addition the bill clarifies that the responsibility and cost for investigating a claim rests with the Accident Compensation Corporation. 
The bill also addresses cover for mental injury arising from traumatic events in the workplace. No cover is currently available for mental injury caused by a sudden traumatic event while that person is at work. We are all aware of awful situations that have occurred at work—shocking accidents or crimes that have been witnessed by workers. I ask members to just go and talk to a train driver who has been in that situation. This exposure can lead to the development of long-term mental or psychological problems that impact on a person’s ability to function day to day. This is an important and essential addition to the accident compensation scheme. 
As has been mentioned this week is the 40th anniversary of Sir Owen Woodhouse’s recommendation to introduce what became one of the most revolutionary and innovative systems for accident compensation in the world. New Zealand’s universal no-fault accident compensation scheme has stood the test of time and is still a landmark social insurance scheme of international significance. Since the 19th century decent people have accepted that common law claims do not provide an equitable and socially desirable response to the industrial injuries of workers. Even way back then there was a growing belief that industry needed to have better regard for the welfare of its workers and that the costs of injuries should be borne as part of the costs of production. The first legislation in New Zealand to provide workers with a right to compensation for work injuries was the Workers’ Compensation for Accidents Act in 1900. But New Zealand claimants had to prove injury by accident arriving out of and in the course of employment before they were eligible for cover. Cover for disease was precluded. 
From 1940 coverage for industrial disease was gradually introduced. After the passing of the Workers’ Compensation Act 1947 compensation became payable in respect of any disease contracted in the course of employment and due to the nature of employment. The Workers’ Compensation Act 1956 provided a system of insurance at the expense of the employer of the worker against accidents arising out of and in the course of his or her employment. The benefits available under the Workers’ Compensation Act 1956 proved far from satisfactory. The maximum compensation corresponded to approximately 52 percent of average weekly earnings and could be paid for only 6 years after which it ceased automatically. Injured persons could sue for damages but they had to prove fault and if they could not they got nothing. Of course there was nothing available for those not in paid employment. 
The dissatisfaction with that scheme led to the establishment of a royal commission of inquiry chaired by the Rt Hon Sir Owen Woodhouse. As we all know a key recommendation made by the commissioners was the abolition of common law claims for compensatory damages. It was recommended that New Zealand should replace the common law lottery with a comprehensive meaningful no-fault compensation scheme in exchange for which those who had cover would surrender their right to sue. It is interesting to note that the 1972 Parliament voted unanimously to pass the Accident Compensation Bill into law which demonstrates the consensus there was around the Woodhouse recommendations. Unfortunately that all changed under the National Government of the 1990s. Listeners should have no doubt that if it gets the chance the National Party will wreck our accident compensation system again. It will privatise the system and sacrifice on the altar of privatisation the social contract that New Zealanders entered into all those years ago. 
John Key has recently confirmed that National’s policy is to re-establish a competitive market to provide accident insurance. When Murray McCully was the Minister for ACC he said that creating a competitive environment is a vital part of the reforms— 
Hon Murray McCully 
: She’s namedropping! 
DARIEN FENTON 
: Mr McCully should listen to what he said: “Insurers like everyone else are in business to make a buck.” I respect Shane Ardern but even he said that accident insurance should be no different to any other form of insurance and that the most price competitive way of making this cover available to any industry in New Zealand is to let the insurance market compete for this business. He said it worked before and that it would work again. The truth is it did not work. It was a mess—a major botch-up—and the only people who did well out of it were the insurance company mates of the National Party. 
I welcome this bill; it is another step in this Labour-led Government’s commitment to that very important social contract Sir Owen Woodhouse introduced 40 years ago. As a member of the Transport and Industrial Relations Committee I look forward to hearing submissions and progressing this bill.