Injury Prevention, Rehabilitation,and Compensation Amendment Bill

I thank the Committee for the opportunity to speak on the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, for which Colin James suggested in this morning’s New Zealand Herald a perfect title, when he talked about the sneaky taxes we do not see coming. Indeed, an apt name for the bill would be the “Sneaky Taxes We Don’t See Coming Bill”. This is one of a long list of the Labour Government’s stealth taxes that this nation has been subjected to. Even from the beginning, when it started to raise the general tax, it mentioned that, but then it went on to the tobacco excise tax of over $110 million, the alcohol tax, the sherry tax on the elderly, not to mention—

The CHAIRPERSON (Ann Hartley): I am sorry to interrupt the member; however, the debate is on the title.

Quite right, and indeed—

The CHAIRPERSON (Ann Hartley): Just a moment, please. I am speaking. The debate on the title clause in Committee is limited strictly to the elements of that clause—does the proposed title adequately describe the bill?—and I would ask members to keep to that please.

Thank you very much for reminding me. As I was saying, I believe that Colin James aptly described what the title should be—that is, the “Sneaky Taxes We Don’t See Coming Bill”. However, there are other possibilities for the name of the bill, and one that would be entirely appropriate would be the “Ruth Dyson Increases ACC Levies by 25 Percent This Year Bill”. The rationale behind the increase, according to the Minister, is that there are better ways to estimate the levy. It just so happens that the Government has discovered better ways to estimate the levy, 3 years in a row. This year, it has topped it off by a 25 percent levy increase. Undoubtedly, the name, the “Ruth Dyson Increases ACC Levies by 25 Percent This Year Bill”, is also totally appropriate.

But let us just look at the name of the bill as it stands: it is the so-called Injury Prevention, Rehabilitation, and Compensation Amendment Bill. We should look seriously at that title, which encompasses injury prevention, and what we do know is that while road deaths might have gone down marginally in the last few years, serious and moderately serious injuries have gone up in the last few years under the Labour Government. It was quite clear—

💬 Hon Ken Shirley: Fewer people are dying.

That may be so. It may be because fewer people are dying, but the actual figures are quite substantial. Under a National watch, moderate to serious injuries were about 79,000 in 1998-99. By 2000-01, they had gone up to 83,900, and by 2001-02, they had gone up to 93,800. It is a huge worry when the title of the bill focuses on injury prevention, yet after almost 4 years of this tedious Labour Government we have seen that very serious increase in moderate and serious injuries in this country.

However, one other absolutely appropriate possibility for the title would be the “Labour Government’s Failure to Establish Relative Risk Rating Bill”. Because all the bill does, and quite rightly so, is spread the levy between the petrol tax and the registration. What it does not do, and what this Labour Government has failed to do, is acknowledge the fact that accidents are related to a whole variety of things, and it has only that very narrow scope related to how much petrol one uses and to the type and size of vehicle. That is totally unrealistic, and unlikely to do what the title of the bill suggests, which is to achieve injury prevention, because it does not give the signals to users that they should take greater care.

In this Chamber, we have tried to establish the principle that the title of a bill is meant to reflect the purposes of the bill. The title of this bill is Injury Prevention, Rehabilitation, and Compensation Amendment Bill. Anybody hearing that title would think that Parliament was debating a bill that would have measures to help the transport or the motor vehicle industry, to lead them, and to come up with an innovative way of how to prevent injury or to reduce injuries caused by motor vehicle accidents; or a bill that contained new health initiatives to be introduced to help people who are injured during motor vehicle accidents to regain their health. But actually, this bill is all to do with enabling the following: first, to “establish as a levy under the principal Act the portion of excise and excise-equivalent duty payable on motor spirit that is paid to the Motor Vehicle Account;” and second, the bill states that because the Government does not want to come back and debate other legislation to adjust the rate of excise tax, while it is passing one piece of legislation to increase excise it might as well adjust another one. Everything is to do with increased cost, increased levy on to motor vehicle users.

Also, as my colleague Dr Paul Hutchison expertly pointed out, the interesting thing is that this increased levy, of course, is due to better estimation. All it is saying is that every time we come back to debate this legislation, it is nothing to do with how to introduce a measure to prevent or reduce injury: all it says is that the Accident Compensation Corporation probably has developed better models to estimate how much more it costs for the long-term rehabilitation costs of claimants under accident compensation. So once again the Labour Government continues to say there are no ifs and buts, the Labour Government promises there will be no increase in tax, no increase in levy. We have heard that again and again in this Chamber. It seems to me that every alternate bill introduced to this Chamber has some sort of increased cost relating to it. I think it would be appropriate that the title of this bill should be very upfront and be the “New Levy and Increased Excise Tax Bill”. There is much to be said for the title of a bill being upfront so the public would know—they might even agree—whether there needs to be an increased cost. The public might even say that at least this Labour Government is honest.

💬 Simon Power: It would never say that.

That is my point, I tell my colleague Simon Power. The point is that the public would not be able to say that, when they look at this title: the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. When they follow this debate in the Chamber they will realise that it is another increase in levy, another increased cost, but with very little effort going into preventing injury—apart from the fact that we know that the police and traffic cops have a quota of speeding tickets. That might be about the only contribution this Labour Government is trying to make, in terms of injury prevention—that when the public want the police to investigate burglary, etc., it is low priority, yet the traffic police seem to have a quota to catch people who are speeding, etc. The Labour Government should demonstrate that it is open and upfront, and change this title.

This is a bill that the ACT party will be voting against all the way. This bill is all about another tax grab by Labour. That is all it is. This is the third petrol tax increase that Labour has put on to the citizens of New Zealand. We have to say to ourselves: “Is there a good reason for bringing in this tax increase?”, and the answer is “No”. The Accident Compensation Corporation has millions and millions of dollars in its coffers. This is a way of getting more money from the motorists of today to fund a surplus into the future. It is an absolute disgrace that the Labour Party is putting yet another cost burden on to New Zealand motorists. It is an unnecessary cost burden, and it just goes to show that this is a Labour Party that does not care about families’ and New Zealanders’ rights to be able to get on with their lives in a proper manner without having all these extra taxes shoved on to them.

The title of any bill should reflect exactly what the bill is all about. The title of this bill gives us no idea at all that it is a bill that will increase levies and taxes. A better and more honest title from the Minister would have been something like the “Motor Vehicle Account Tax Increase Bill”. That would have said it exactly as it is. That would have told New Zealanders that when they went and got this particular bill out of the statute book, they were looking at a tax increase bill. If the Minister did not like that, maybe she could have just called it the “Increase in Accident Compensation Levy Bill”. Again, that would have told consumers exactly what the bill is all about. It is a rise in levies, which is a rise in taxes by stealth by this Labour Government.

Another idea I had was to call it “Another Labour Party Stealth Tax Bill.” Again, that would have told everybody exactly what it is—a stealth tax. People do not see it upfront; it just comes on quietly, and every time people go to the garage and fill up their cars with petrol, they have paid this extra money in tax, which the Labour Party wants to grab off New Zealand motorists. This is a Government that is anti-business—every New Zealander knows that. It is anti-business and anti-worker, and I think it is a shame that it has to go about doing this sort of stuff by stealth.

This bill brings in a 120 percent increase in petrol taxes. They will go up from 2.3c in the litre to 5.08c in the litre. Again, I say that that is the third petrol-tax increase by Labour since it has been in power, and I ask what on earth that party has against motorists—to keep on socking it to them with more and more tax increases. That is why New Zealanders did not want the Accident Compensation Corporation to go into monopoly control. A monopoly can do what it wants; it does not have to look after consumers. This bill is a very clear example of a monopoly saying: “Let’s get more money. Let’s grab more money off the motorists. Let’s do it by a stealth tax.” So the Government is raising money from today’s motorists to fund its organisation into the future. That is completely unnecessary.

I say to the Labour Party that the title of this bill is a lie. It does not tell New Zealanders what this bill is all about. The Government has a responsibility to be more honest to the people of New Zealand, so that when people go to the library and get out this bill—which they think is all about accident compensation, and somehow about helping to stop injuries or rehabilitate people—they will realise that it has nothing at all to do with those things. It is simply a stealth tax on every New Zealand motorist. So I ask Labour why it is not honest, and why it does not come clean. Why does it not put that in the title of the bill, so that it is being open, transparent, and accountable?

The title of this bill is absolutely wrong. The average New Zealander reading it would think it was something about injury prevention, something about rehabilitation, something about compensation, or something about all three of those attributes. In fact, it is nothing of the sort. If we wanted to retain those references in the title, this bill should be entitled the “Injury Prevention, Rehabilitation, and Compensation (ACC Levy Increase Amendment) Bill”. That would be far more honest. I believe that the public would then have made more submissions, and there would have been submissions from individuals. I think we had three submissions, all told. The most comprehensive of them was the Automobile Association’s submission, representing some 950,000 motorists, but average motorists do not have a clue that this legislation will come into being and impose another 2.38c per litre of petrol on them.

This bill could have been called the “Increased ACC Levy Bill”, the “Increased ACC Petrol Levy Bill”, or—along the lines of what the ACT member said—the “ACC Motor Vehicle Account Tax Increase Bill”. It could have had any title that reflected what it is all about. Personally, I see the bill as another attempt to slug the petrol motorist, and I would prefer it to be called the “Slug the Petrol Motorist Again Bill”. Under this Government, and under Labour in particular, the petrol motorist has had a really tough ride. That party does not give the motorist terribly much credence, at all.

The vast majority of motorists are concerned about the rising costs of running a motorcar, which increase almost monthly under this Government. The cost of fuel is now going to go up a bit. The last increase in the cost of fuel was only 2 or 3 weeks ago, when it went from 96c or 97c to nearly $1 a litre. The cost went down a little prior to that, but it has gradually crept up—when this Government came to power, I think it was 80c a litre—to $1 a litre, and this legislation will put it up yet again. On top of that, the levy contained in the registration fee has been increased significantly by this Government.

We all know that the Accident Compensation Corporation has some very hefty liabilities—I think to the tune of about $8.5 billion—but it has something in excess of $4 billion tucked away in investments. Although the corporation has been mandated to become fully funded by the year 2014—I think from memory—that date is not essential and could be extended a little bit. Certainly, as the economy dries up a little and becomes harsher, the average person should be given some consideration. We should not just impose things on people because we have a commitment to a date, or, as the Labour Party has, to an ideology.

Whatever else we say about this title, we say that it does not reflect what this bill does. In fact, it is a long way short of giving anybody the impression that it will increase accident compensation levies. When this bill goes through—and I have no doubt that it will go through, because I believe the Greens are committed 100 percent to supporting it—there will be an immediate increase in the cost of petrol, and this bill will give a blank cheque, sometime in the future, to the accident compensation levy being increased even more. The title should reflect that sort of potential action. The present title gives the distinct impression that this bill is about some form of injury prevention, rehabilitation, and, indeed, compensation.

I guess the Opposition would not be the Opposition if it did not use every opportunity there is to jump up and down and make political capital when the cost of something goes up, and to complain about new taxes.

💬 Simon Power: It’s called politics.

Of course it is called politics, and that is what the Opposition does.

The title of this bill is entirely appropriate, because it is about what the money will be spent on. This is not a new tax in the sense of gathering more Government revenue. It is not a new tax in the sense of the money going into the consolidated account. It is additional money to fund the cost of the accidents that occur this year, and if motorists want the levy to go down, all they have to do is have fewer accidents.

The Opposition members who oppose funding the full long-term costs of the accidents incurred in a year never tell the House which of the two alternatives to that course of action they would prefer. Do they believe that there should be no long-term funding for full rehabilitation of accident victims? If they believe that we should stick with the present situation—which arose under a National Government that refused to fully fund the tail of long-term rehabilitation of accident victims—they should tell the House honestly that they do not believe there should be full rehabilitation of accident victims. Then motorists could decide whether they thought that was a sensible policy. Alternatively, perhaps they think some other part of the economy—some other tax such as, perhaps, the general taxation fund—should fund the costs of road accidents, in which case they should tell the country that, as well. Then taxpayers could decide whether they wanted to be responsible for picking up the costs of people who injure themselves in accidents. Opposition members cannot have it both ways.

The Greens are supporting this bill because we believe in fully funding accident compensation. We are disappointed that there has been no progress since the bill was introduced in terms of shifting the whole accident compensation component off vehicle registration and on to fuel. That would make it easier for young people and poor people to register their cars instead of driving unregistered cars, and it would relate the payment to the risk. The car that sits in the garage all day is not having accidents; the car that is doing tens of thousands of kilometres on the road is at much greater risk, and the owner should pay more. We believe that the cost of accident compensation should be on the fuel, not on the registration. The bill goes some little way towards that, in that the whole increase is on the fuel, but the previous funding remains with the registration.

We would also have liked to see a firm commitment to extend this levy to diesel, rather than—as expressed in the bill—just having an opportunity to do so. It is quite iniquitous that petrol users should be paying this additional accident compensation levy, and not diesel users. Although the bill makes it possible to do that, it does not ensure that it will be done, and we have a certain disappointment about that.

I move, That the question be now put.

I want to raise a matter in the debate on this bill. I refer members to Standing Order 251 and to a whole series of rulings on pages 90 to 92 of Speakers’ Rulings. Members might well be advised to study the Standing Orders and the Speakers’ rulings, particularly in the context of this legislation.

I draw the House’s attention to the fact that this bill is called the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. I want members to read this bill, and maybe someone who takes the next call will be able to tell me where this bill talks about injury prevention. I have read it and I cannot find it. So if there is nothing about injury prevention in this legislation, why is it called “Injury Prevention”? That is why I refer members to the Standing Orders and to Speakers’ rulings, because the title of the bill should reflect the bill. Well, I cannot find where this bill refers to injury prevention.

I read on, because I thought that although the bill did not talk about injury prevention, it would probably talk about rehabilitation. So I went through the bill. I read and I read. Maybe there is something in the schedule and I have missed it; that is a possibility. Perhaps the next speaker will be able to point me to where the bill talks about rehabilitation, because I cannot find it. Yet the Standing Orders and Speakers’ rulings—particularly the latter—say that amendments have to be relevant. In fact, the rulings are very clear that an amendment can be ruled out if it is not relevant or if it is facetious. How can we, then, start off with a title that has no relevance to the legislation?

The title goes on in its third part to state “and Compensation”. Again, I read through the bill, and I am sure the original legislation talked about compensation—indeed, I know it did—but this bill does not. It does not refer to compensation. It talks about collecting money and it also talks about taking appeals to the High Court on a question of law.

So this legislation does two things: it talks about gathering revenue and it talks about legal procedures. I would have thought, then, that if a bill talked specifically about two issues, it would be named appropriately. The purpose of naming bills is so that when somebody in a court somewhere, or a lawyer in an office up in Kaikohe, or Kaitaia, or Whangarei, or wherever it might be—

💬 Phil Heatley: We’ve got lawyers in Whangarei.

We do not have many, because we are good people in the north, but occasionally we need them. The purpose of the title is for the lawyers or the people concerned to be able to pick up the Act and see that it is what they need, that it will take them to the issue they are looking for. This title will absolutely confuse people. People who want to know about injury prevention who pick up this Act and read it will be confused. People will want to know about rehabilitation and what Parliament did on 24 June 2003. They will want to know what we said about rehabilitation. They will be awfully disappointed, because the bill does not talk about rehabilitation at all, and it certainly does not talk about compensation. This bill talks about levies.

💬 Brian Connell: What are they?

They are taxes. They are taxes by another name. I am sure I recall this Helen Clark - led Labour Government saying that it was not going to impose any more taxes. I am sure it said that on its credit card.

I move, That the question be now put.

I would like to take up the challenge of the member who has just resumed his seat, in addressing this bill entitled the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. When he first made his rather elegant speech asking where the bill mentions prevention, rehabilitation, or compensation, I thought that he could not be right, that there was no way he could be right. I have to say I have read the bill, which is quite short, and he is absolutely right.

Under the heading “Aim of bill”, the commentary on the select committee report states: “The principal change proposed is an increase to the excise duty on petrol sales to cover increased costs to the Accident Compensation Corporation (ACC) of compensating motor vehicle injuries.” He is absolutely right; I am not disagreeing with him. It is not in the bill. I read from the commentary on the bill. One would have thought that the aim of the bill as stated there would be reflected in the purpose clause of the bill itself, but it is absolutely not.

When one reads the words of the bill itself, it becomes quite clear that it is nothing less than a tax bill. Essentially, the title says that this legislation is an amendment to the Injury Prevention, Rehabilitation, and Compensation Act, but it is a misnomer. This is a new tax bill. It is adding to the excise tax on motor spirits. We know that this Government has already increased the tax on motor spirits three times. We know that this Government has introduced a new tobacco tax and a new sherry and port tax. We also know that it is legislating for a carbon tax, and that it is talking about a flatulence tax, and even a fat tax—a food tax to try to address obesity. Yes, there are papers out on that.

Of course, when we go back to this election campaign pamphlet—

💬 Simon Power: Who is that person?

No one recognises her, but I am told that it is an airbrushed photo of our Prime Minister. People often say: “Who’s the sheila on the front?”. It is an airbrushed photograph of our Prime Minister, Helen Clark, and no one recognises it, so the member is excused.

This is the We Will Deliver pamphlet. What did Labour promise? It promised no new taxes and no increase in taxation. Well, this is the fourth increase in the tax on motor spirits, and we have had the other taxes that I have mentioned. We also know of the fiscal drag effect on income tax. We were told that only those earning over $60,000 would go up to the 39c-in-the-dollar tax rate, but, with inflation, 3 years later there are a helluva lot of people who have gone across that threshold, and there are a lot of people who have gone across the $38,000 threshold. That is the fiscal drag effect. So Labour's statement that no more than 5 percent of the population would pay this tax is no longer true. Up to 10 percent of the population is now paying increased taxes because of this Government—and the fiscal drag on income tax is the sneaky way that the Government has done that.

The title of this bill sounds so innocent, but the bill is nothing more than another tax. There is no better way to show that than to go the schedule of the bill, as it relates to the title, where we see the figures 36.2c per litre of motor spirits, plus 8c per gram of lead. We know that a considerable amount of the excise tax does not go to the roading fund, and it is the fungibility of money that is the problem. The Government is nominally saying that this money will go to the Accident Compensation Corporation as a direct levy, but how would one ever actually know that? One does not know that. Nor do we know what the exact costs of accident compensation are. The point has already been made that we have enjoyed a reduction in the number of road accidents, yet the Accident Compensation Corporation is saying that the costs are going up in spite of the reduced number of accidents. Does that not say more about the efficiency of the Accident Compensation Corporation and what it is doing, than anything else?

I move, That the question be now put.