Injury Prevention, Rehabilitation,and Compensation Amendment Bill

This so-called Injury Prevention, Rehabilitation and Compensation Amendment Bill in no way reflects its title, because it is a tax on ordinary New Zealand motorists. Part 2 absolutely puts that to rest. Part 2 deals with the rate of levies, the levy categories, the collection of levies, challenges to levies, power in respect of small amounts of levy, and on and on it goes to regulations relating to levies.

We have, indeed, just witnessed a rare spectacle. It is excellent to see the Minister of Health here, but it was somewhat extraordinary to see the member for Otaki, Darren Hughes, on his knees to her, and one does question her motives for being here. As my colleague Phil Heatley quite rightly pointed out, is she here because she really is looking at this bill not from the point of view of accident prevention and rehabilitation, but from the point of view of bringing in a sneaky health tax? We do not know what her reply to Darren Hughes was, but we are deeply concerned about it.

This part of the bill is the one that deals with the rate of levies. It is quite sobering reading when one looks through the details. Clause 6, “Rate of levies”, adds a new subsection: “(4) The levy payable … is payable—(a) at the rate or rates per litre or other unit prescribed by regulations made under this Act;”. Well, we have seen a 25 percent increase this year. What will we see next year under this rapacious, taxing Labour Government—the very Government that stated on its “credit card” that there would be no more taxes? Yet here is a classic example of a bill whose title totally fabricates the real meaning of this part, which focuses on how that gathering of taxes will occur.

But I do want to dwell for a minute on the technical aspects of the levy-gathering that the Government has confined merely to either fuel—which is bad enough—or the vehicle, which many people would view as also pretty bad, particularly in light of the view that this Government has encouraged a monopolistic framework instead of the competitive framework that was brought in several years ago by the National Government, and which, very sadly, reverted to a monopoly under this present Labour Government.

I say “sadly”, because when the competitive element was brought in, we saw an immediate shake-up within the Accident Compensation Corporation. We saw greater attention to case management; we saw huge attention to early rehabilitation, and we saw a great focus on improvement in the workplace. It was as though the corporation was suddenly galvanised into action to look at how best this insurance could serve the people of New Zealand, rather than the situation now where we have a monopoly very much prone to going its own way, no matter what. There are no checks and balances on it. In this last year, we have seen a 25 percent increase, and who knows what we can expect next year?

It is with great interest that I take the call and continue on with Paul Hutchison’s dissertation on the bill. It is interesting that the Accident Compensation Corporation is again levying the taxpayer—and a levy-payer is a taxpayer in this case. People who drive a car, a boat, or who ride a bike will pay more. Why is that? Why have costs within the corporation become so out of control that it has to look for more money, in order to operate and pay its ever-burgeoning staff—the bureaucracy, so to speak? That is the question before us today.

The devil, of course, is in the detail, and I can see little Lucifer right here in Part 2. Paragraph (b) in clause 6 states: “in the absence of regulations for the time being in force for the purpose of paragraph (a), at the rate of 5.08c per litre of motor spirit in respect of which excise duty … is payable under the Customs and Excise Act 1996.”

💬 Simon Power: Got it!

The member for Rangitikei has found the reference. This time, the amount chosen to tax New Zealanders is 5.08c—an added tax that will go to the Accident Compensation Corporation to spend on an ever-burgeoning bureaucracy.

But that is not what concerns me most. I noted when we were looking at subsection (b) inserted by clause 3, “Purpose”, that this Government is legislating to avoid the need for an amending Act to consequentially adjust the rates of excise duty. In other words, it is cutting through the red tape. We usually do not welcome that, but in this case we welcome it in terms of slowing down this Government’s move to tax New Zealanders and rape their pockets. But subsection 3(b), inserted by clause 5, wants to avoid the need to go through due process, and one could therefore say that this 5.08c is purely arbitrary. However, it is not only arbitrary; it represents shifting sands when it comes to levying and taxing motor vehicle users in this country. I say that by way of a warning to members of the Committee. They should not be fooled that the amount of 5.08c is set in concrete for ever and a day, because, sadly, Parliament is seeing this Labour Government make sure that there is no red tape. On a whim, it will be able to change that rate and tax New Zealanders even more.

I note that the levy payable under section 213(2)(c) of the principal Act is payable “at the rate or rates per litre or other unit prescribed by regulations made under this Act;”. I want to see what those regulations are, because I am concerned that an even clearer passage may be cut in them to enable this Government to put up the rates at any time. I put that to you, Mr Chairman. I see that you are raising your eyebrows, and that you are changing your opinion on this bill. I will be interested to see you cross the floor on this matter. You know that rates for roading tax have gone up on a whim. You have sat in the Chamber until 3 o’clock in the morning and seen tax on sherry go up on a whim. You have watched the cows and sheep scatter in the paddocks as they see themselves being taxed to death every time they let out a bit of steam—

The CHAIRPERSON (H V Ross Robertson): The member cannot bring the Chairperson into the debate.

Part 2 proposes the increased accident compensation levy. As one who really enjoys using fuel, I do not like any increases in the cost of the wonderful substance that keeps our machines going superbly on the road. But as my colleague Larry Baldock has already stated, United Future accepts that the increased costs faced by the Accident Compensation Corporation do need to be met. We also accept that increasing the petrol levy is the most equitable way of achieving that—as opposed to increasing the vehicle registration fee. However, I would challenge one aspect of the thinking in the bill that states that those who do the most mileage are those who might have the most accidents. I do not necessarily agree with that.

However, we think this increase should be absorbed into the total amount of excise duty taken by the Government, rather than allow $785 million of the $1.7 billion collected in petrol excise duties, road user charges, and motor vehicle licensing fees to be siphoned off into the consolidated account. There is no guarantee that that money will be spent on accident compensation and rehabilitation, roads, or anything else directly related to transport. Clause 6 raises the accident compensation levy to 5.08c per litre, but when we consider that 18.5c of the petrol excise duty collected from motorists at the pump already goes straight back into the Government’s coffers, we have to wonder why the increase is not taken out of that amount.

As far as the accident compensation levy is concerned, United Future likes the idea of a tax being used in such a direct way for the purpose for which it was collected. Taking the levy increase out of the money that goes to the Government would support that principle, leaving 15.7c to be diverted back to the consolidated account. Then at least a greater portion of the excise duty is guaranteed to be used for transport-related costs.

Federated Farmers pointed out in the select committee that the diversion of 18.5c per litre of fuel excise into the Crown account was initially justified on the basis that it was required to fund the medical costs of road accidents. They submitted that the subsequent introduction of the motor vehicle account invalidated that justification—to which the Government replied that medical costs were not the only justification for the diversion of the excise, citing a number of education enforcement programmes to which the excise duty contributed. But one would have to say that 18.5c for every litre of fuel purchased must buy a heck of a lot of educational programmes. In the meantime, spending on Transfund was actually cut in this year’s Budget, at a time when the Government is running Budget surpluses and the New Zealand transport infrastructure is in dire need of investment.

United Future cannot condone a further unnecessary increase in the tax burden already borne by New Zealand motorists, when there is enough to show for the money they already pay.

I have just noticed that the Minister in the chair, Judith Tizard, looks as if she is prepared to take a few questions on this part. I wonder whether she would be good enough to guide me through the reasons for the inclusion of the provisions relating to section 162, “Appeal to High Court on question of law”, in clause 4. I see that the Transport and Industrial Relations Committee chose to strike out the original appeal provisions and insert a somewhat larger set of provisions relating to appeals to the High Court on questions of law. I see that the usual leave provisions are there. I wonder whether the Minister in the chair would be good enough to take a quick call and let those of us on this side of the Committee know why a larger set of provisions has replaced the smaller set relating to questions of law.

I am not sure what the actual difference is. I am not sure whether Dr Paul Hutchison, who sat on the committee, has a view on that. However, if the Minister does not know, perhaps she could ask one of the officials and we could get a bit of a rundown as to why that clause has been replaced, and why such a large new clause on questions of law is in there now. I shall let that matter lie on the table and come back to it if the Minister is prepared to take a call on it.

My colleague Phil Heatley referred, somewhat unusually, to clause 6, “Rate of levies,” as a sort of Lucifer clause. He did make one good point in his 5-minute contribution, and it was that what the Government is doing here is introducing a non-negotiable bottom line for the levy rate whilst retaining the ability, through those other subclauses, to raise that rate at any time at all. This is not a concrete provision that sets the levy at a particular rate; rather, the clause in question states that in the absence of any other regulation increasing the levy, the amount of 5.08c will be the fall-back position for the levy.

💬 Mark Peck: Which clause number?

Had the member been paying attention, he would know that it is clause 6, which inserts subsection (4)(b)—otherwise known as the Lucifer clause. That clause states that the Government is not increasing the levy to any particular rate. All it is doing is creating a bottom line for that rate, so it is a fall-back position. It is not a new rate; it is a minimum statutory inserted rate, where the discretion remains to increase that rate at any time in the future. The motorists of New Zealand are in a less than satisfactory position when this Government can, by regulation, simply amend that rate at any time in the future. I represent a large electorate, and I do not think that is in the best interests of—

💬 Rodney Hide: And a good one, too.

—I thank the member—motorists around New Zealand. Nevertheless, to save the motorists of New Zealand, clause 11 has been inserted, and I predict that it will be the least used clause in this new amendment bill. That clause relates to refunds payable by the corporation, and I am willing to wager that it will never be used. I want to state for the record now that the day the Accident Compensation Corporation refunds anything to anybody by way of levy, or any other matters it collects under regulation, will be the day that United Future makes sense in this House and finally decides not to vote with the Government on matters of confidence and supply. The member should not look so shocked. I am sure that there is more chance of that happening—and it will be pretty rare—than there is of the corporation ever refunding anything to anybody.

But slipped in at the end is that wee clause 11. Perhaps when the Minister is explaining the reasons for the appeal to the High Court being changed, she could help the Committee by perhaps giving it a smorgasbord of events where she envisages the corporation refunding money to people under clause 11. I cannot think of one. I have spent my fair share of time with constituents in Accident Compensation Corporation offices, and they are not given to generous refunds. Perhaps the Minister would like to take a call to answer our two queries.

Today we are seeing an abuse of Parliament. Legislation is going through this House to put up the levy on motor spirits, and not one Government member has taken a call.

💬 Simon Power: Or the Minister.

Or one Minister. It is whoever gets the short straw, and now Judith Tizard has the short straw. She is just sitting in that chair. They may as well be knitting, because they are not coming down here to explain—

💬 Hon Judith Tizard: No, that would be against the Speaker’s rules.

I did not complain about the Minister knitting. She can carry on knitting. My view was that at least she was doing something useful, for a change.

💬 Hon Judith Tizard: Which is more than you have ever done in this House.

Ask the Minister Parekura Horomia who has been helping all these weeks with his portfolio.

The CHAIRPERSON (H V Ross Robertson): Can I ask the member to come to the point.

My point, Mr Chairperson, before I was rudely interrupted by the Minister in the chair, whom you did not move on, who is not allowed to sit there and interject, is, why will she not take a call? Why will not one member, like Mark Peck, take a call? I will tell members why. The ninth floor said: “Don’t speak to this bill. There’s nothing in it for us.”

💬 Simon Power: You do a radio interview, you get pulled off half way through.

A Minister is called off halfway through, because the ninth floor says not to respect Parliament.

💬 Janet Mackey: What about the bill?

We will tell that member about subsection (4)(b) in clause 6, which states that there will be a levy of 5.08 cents for every litre of motor spirits. We are prepared to talk about it. We are prepared to attack it. We are prepared to criticise it. Why is the Government not prepared to defend it? Why is the Minister in the chair not prepared to defend it? Why is the honourable Minister Parekura Horomia not prepared to ask the reason that his people, the Māori people, will have to pay 5.08 cents per litre of motor spirits? Why is that well-known petrol head the Hon Harry Duynhoven not prepared to ask why people who are petrol heads driving around in their cars should have to pay an extra 5.08 cents in a monopoly levy to the State? According to the bill the State has improved its estimates of long-term rehabilitation costs. What a load of rubbish!

I can understand why the Government does not want to talk about this. It is indefensible, it is wrong, and it is contrary to what the Labour Party campaigned on. Why do those members not come down here to respect Parliament? Why can they not come down here and give one speech in defence of the reason that every New Zealander, rich or poor, Māori or Pākehā, whether or not the treaty applies, should pay 5.08 cents minimum, as my fine colleague Mr Simon Power said, extra per litre of petrol? Not one of those members will take a call.

We have a bill going through Parliament that this Government is not prepared to explain, defend, or tell us why it has to go through. We know that the United Future party is against it. That is a good start. We know that the Greens will vote for it, because they hate the motorcar. They hate freedom. They would put up taxes on motor spirits—$10 a litre would not be too much for them. I ask Mr Tanczos whether that is right. I think the answer is yes. He is still thinking about it. I ask the member whether $10 tax on a litre of gas is all right.

💬 Nandor Tanczos: Is that your suggestion?

He says that is a good suggestion. But old Harry Duynhoven will not go along with that. I say to this Committee—

💬 Hon Harry Duynhoven: Who’re you calling old?

Well, Minister young Harry Duynhoven. Why does he not take a call to explain to all the Volkswagen lovers of New Zealand the reason they will pay 5.08 cents more for petrol?

I move, That the question be now put.

LINDSAY TISCH (NZ National—Piako): Last week I had the opportunity to talk in the second reading of this bill, and I said I was absolutely horrified that the Government talks about how it is fair, yet it is to impose a levy that is nothing more than a tax on business, on those with fixed incomes, and on the professional drivers of vehicles. And this Government says that it cares! Members should remember that Labour members said in 1999 that we should watch their lips when they said there would be no increase in taxes. What have we seen in this legislation? [Interruption] It is all very convenient for the Government, is it not?

What concerns me—I mentioned this in the debate the other night—is that by way of regulation, which comes in under clause 6, this legislation simply imposes a provision that the rate of tax can go up without it coming back to this House for scrutiny. The Government is using that technique more and more. Those who have sat on the Regulations Review Committee will know that this Government wants to bring in, by stealth, all these taxes—no scrutiny by Parliament—and it does that by way of regulation. If we look at clause 6—Simon Power and other speakers mentioned this, but I have not heard any Government speakers stand up and defend it—which relates to the rate of levies, we see it states that the rate of the levy will go up from 2.3c to 5.08c per litre.

💬 Rodney Hide: How much?

💬 LINDSAY TISCH: To 5.08c per litre. That is a 120 percent increase. How can the Government justify a 120 percent increase, from 2.3c per litre to 5.08c per litre? That is absolutely disgraceful.

This Government will hit all those people who are on fixed incomes. They have no way to recoup this tax. They will pay for this accident compensation levy to swell the coffers, so the Accident Compensation Corporation will be able to pay for the accidents. Why is the 18c per litre that is collected now and goes into the consolidated account—this came up in an earlier debate—not going towards the accidents that the Accident Compensation Corporation has to account for? We are paying for that now in the registration of our vehicles. We are already paying it there, and it has gone into the big fund. [Interruption] If the member over there on the Government benches wants to stand up and defend that, I would be really interested to know what he has to say. I know that in his electorate, in Invercargill, all the people who need to drive vehicles will be carrying the can on this levy. Maybe the Minister in the chair, the Hon Judith Tizard, can take a call on this measure, because I find it quite disgraceful and unacceptable that we have this huge increase in compliance costs. Here it is—an increase of 120 percent, with no justification for that.

I wonder why, at this stage, diesel is not included. I know that diesel in the long term will be included, but why do we not have diesel in the equation here? It will not be included at this stage; it is not subject to an excise duty. We say that if the Government is to be fair—

💬 Brian Connell: Ask Harry Duynhoven.

💬 LINDSAY TISCH: Yes, the Minister over there on the Government benches might take a call. Why are we not including diesel at this present time? Why did the Government miss it out? We have a section of the community that has no way to recover these costs. If we look at the professional drivers, we see that those people, because of the nature of their work and the training that they have, are not the ones who have the accidents—yet we are hitting those sorts of people with a 120 percent increase in the levy. I find that quite unacceptable. [Interruption] It is. It is a 120 percent increase. Putting up a 2.3c per litre levy to 5.08c per litre—that is a 120 percent increase.

💬 Rodney Hide: They call that an improvement!

💬 LINDSAY TISCH: Yes, that is right. What about these high compliance costs and regulatory regimes? If we look at this measure, we see it is an extra 3c per litre, and there is no chance of those people being able to recoup that.

I move, That the question be now put.