Adams Paul: Questions for Oral Answer — Questions to Ministers 
Adams Paul: Questions for Oral Answer — Questions to Ministers 
[Volume:619;Page:14893] 
12.  
PAUL ADAMS (United Future) 
 to the  
Minister for ACC 
: Does the Minister believe that the proposed increases to ACC premiums for farmers are fair? 
Hon RUTH DYSON (Minister for ACC) 
: 
 The Accident Compensation Corporation’s (ACC) proposed increase in self-employed farmers levies is based on the increasing cost of injuries to that group combined with a decline in the pool of liable earnings for livestock farming since 2002 from $2 billion to less than $1.5 billion now. At the same time ACC is proposing a 3 percent drop in the employer levy for farmers which will affect close to half the industry calculated on liable earnings. Public submissions on the levy proposals close on 16 September after which date the ACC board will give me its final recommendations. The Department of Labour will provide me with separate actuarial advice. I will consider all that information before making a final recommendation to Cabinet on the levies. 
Paul Adams 
: How can a 74 percent hike in farmers’ accident compensation levies over 3 years be considered fair when ACC is expected to make a surplus of over $850 million from increased levy revenue and from playing the sharemarket and when it continues to hold a monopoly on workplace safety insurance? 
Hon RUTH DYSON 
: I have seen the 74 percent quote from Federated Farmers and it is incorrect. The total accident compensation levy for self-employed farmers has increased by 28 percent. It has been caused by the legal requirement for ACC to collect levies each year on a fully funded basis—that is to ensure that the total cost of all claims incurred and reported in that year are fully funded. That is unlike the previous National administration which lowered the levies and put the cost on to future generations. Labour fully funds the scheme. The increase is also contributed to as I said in answer to the primary question by a combination of a decline in the pool of liable earnings and the increasing cost of injuries. 
Hon Mark Gosche 
: How do New Zealand’s accident compensation levies compare with similar costs overseas? 
Hon RUTH DYSON 
: They compare extraordinarily well. In Australia where a private market operates accident compensation levy rates for farmers—and actually for most occupations—are at least twice those of New Zealand according to the Australian Government’s annual report comparing the two markets. 
Hon David Carter 
: Does the Minister accept ACC’s justification for this proposed increase with its suggestion that farmers are failing to take safety seriously when more than 10000 farmers have attended FarmSafe courses in the past 18 months? 
Hon RUTH DYSON 
: Not only do I believe that farmers make a significant and valued contribution to our economy but I also agree with the suggestion made by that member that farmers have been working well with ACC to get their rate of injuries down. Despite that work their injury rate is still nearly double the average for all industries combined. 
Gerrard Eckhoff 
: Why should a farmer with a perfect safety record pay this increase of 9 percent; and what more can those farmers who have a perfect safety record do? 
Hon RUTH DYSON 
: As the member knows we have been developing since 2000 a series of programmes that ensure that as the injury rate goes down it is reflected directly in the levies that are incurred by that industry. 
Paul Adams 
: Is the Minister aware of a mass survey of farmers’ compliance costs that found that accident compensation levies are the biggest single compliance cost that farmers face and that farmers believe they could obtain private insurance cover for about half the cost of their accident compensation premium if the monopoly was removed? 
Hon RUTH DYSON 
: Although I am not aware of that particular survey quoted by the member I am reasonably familiar with the private versus public insurance argument. Australia provides a very good example of how the private market works. As well as resulting in considerably higher levies than New Zealand’s the Australian market collapsed catastrophically— HIH being a prime example—and had to be bailed out by Government intervention to the tune of millions of dollars. It is now heavily regulated by state Governments. 
Mr SPEAKER 
: That is sufficient. The Minister’s answer was too long. 
Paul Adams 
: Why does ACC not have a levy discount programme for small businesses like farms when medium and large employers can access levy discount incentives through the Workplace Safety Management Practices programme in light of the fact that small businesses make up over 90 percent of all businesses in New Zealand? 
Hon RUTH DYSON 
: I agree that this is a programme that needs to be extended and I am delighted to inform the House that work is under way. 
Hon Dr Nick Smith 
: I seek the leave of the House to table a report in the  
Nelson Mail 
 that Richmond’s Riding for the Disabled Association is to be forced to close by a 12-fold increase in its accident compensation levies. 
Mr SPEAKER 
: Leave is sought to table that article. Is there any objection? There is.