Scott Alastair: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — First ReadingText is incorporated into the Bound VolumeScott Alastair: Accident Compensation (Financial Responsibility and Transparency) Amendment Bill — First Reading[Sitting date: 02 June 2015. Volume:706;Page:4207. Text is incorporated into the Bound Volume.]ALASTAIR SCOTT (National—Wairarapa):The last speaker Sue Moroney was obviously a little confused a little bit concerned. She thought that the levies relating to ACC were related to the Budget surplus or deficit or the books. This is exactly why the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill is being put in place—to remove confusion to increase the transparency to increase the governance and to strengthen the framework under which ACC levies are calculated. It is necessary because as an employer myself I get bills from ACC. They are often not explained. It is difficult to work out where they come from and why the increase or the decrease has come about. This bill will increase the transparency and understanding for employers. The bill will improve the governance around the levy structure and this is so that we can continue to have fully funded accounts. Most of the accounts are almost fully funded and that is a good thing because it reduces the volatility in the levy setting when it is year to year. Some of the confusion comes about from a year-to-year levy setting or finalising as we heard in the select committee just recently. There was a strong debate on how the levies were calculated and whether they should be higher or lower. As I say that is a very good reason to bring this legislation through.The Government does not always go with the ACC recommendations. ACC recommended much bigger increases in fact in 2010-11 and again in 2011-12. Had we accepted those increases they would have cost levy payers $630 million more. We chose not to accept those recommendations. Again the reason for this legislation is to make it clear what the parameters are what the levy-setting characteristics or prerequisites have to be before levies can be changed. That again is important for the employer because employers are budgeting for their businesses. They need to know their costs. They need to look ahead and understand what the cost of ACC what the cost of having staff will be and ACC particularly in businesses where there is a higher risk of injury is significant.I am pleased just to clarify that injury prevention investment by ACC has increased by $10 million. That is for some of the stuff that the ACC is doing in injury prevention. There is also legislation that is not so much a parallel piece of legislation but rather health and safety law reform going through the House as we speak. If we can get that right and we encourage people to take greater responsibility for their own health and safety—again we will have fewer injuries fewer long-term injuries and fewer deaths in the workplace. We know that New Zealand does not have a great record when it comes to health and safety. That piece of legislation will aid encourage and support businesses and individuals to protect themselves and their families in the workplace. Again that can only be good for putting more pressure on a lowering of ACC levies simply because there will be fewer injuries in the workplace.There is another piece of this legislation that relates to the residual levies. It is a bit of a tidy-up I guess because at the moment those levies must continue to be collected until 2019. This piece of legislation allows those levies to be cancelled or rescinded or discontinued at an earlier date. When that liability diminishes so the liability to ACC diminishes and that can be terminated prior to the current cut-off date of 2019. That is a good thing.I just want to make a couple of points around the volatility of these funds and why it is important to consider and understand these fully funded assets. The current asset base of the ACC is over $30 billion. That is bigger than the Government’s superannuation fund—or as it is affectionately known the Cullen fund which is around $26 billion - odd. So we are talking big numbers here. That has risen from 2009 when it was $10 billion. That fully funding programme—and we are just about there—has created this nest egg if you like. But the swings and roundabouts of interest rates—with we know and as the Minister for ACC mentioned herself a $3 billion swing on a 1-month interest rate variation—are huge. So you can see the need to think well ahead of just this year to set your levies. You cannot say that we are down 10 percent so we need to increase the levies to recover the $3 billion loss that is just as a result of the interest rate fluctuation. That would be ludicrous. That would be unaccepted by the general public and the ACC levy payers. This governance and this governance framework will ensure that consideration is given to the long-term view the long-term understanding of the marketplace the interest rates and the term structure of interest rates as well as things that are going on in the public arena.I have mentioned health and safety law reform. That is just one thing. We are going to have safer cars for example. Again all these things in the long term will reduce accidents. We continue to invest in speed reduction in drug and drinking and driving programmes. All these things continue to educate the public and continue to reduce the burden that is the responsibility of ACC. That long-term approach is what is required. Currently as we have already heard from the other side there is this debate this argument and misunderstanding of how levies are calculated. That is not good. That is not a good thing and that is why this legislation is here to support the transparency and the strengthening framework of the legislation so that people can plan ahead so that there can be discussion and transparency. That is why I am pleased to support this piece of legislation.We have already heard of the $500 million planned reduction in ACC levies over the next few years and that will continue. We have talked about the reduction in the motor vehicle levy and that is a good thing. We will continue to see improvements in reductions in levies as those assets are managed in a more financially responsible manner. We will have increased transparency so there is less confusion about how the money is raised where the money is spent and where the money is invested and there will not be the confusion that was exhibited from one speaker at least on the other side. I commend this bill to the House.