Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 3)

I stand to discuss Part 2, “Miscellaneous Provisions”, and the schedules that follow at the end of the bill. Here we have once again a reminder of the changes that were made to the Accident Compensation Corporation (ACC) driven by the ideology of this Government, because one of the first things clause 52 does is to take out all references to At Work Insurance Ltd. As many listeners will recall, for a short space of time there was competition in ACC. A number of organisations entered the sector in good faith and structured their businesses to provide accident insurance. Although this system was in place for a very short space of time, the results coming through were very good and very favourable.

But when this Labour Government came to power, like a South American dictatorship it decided to nationalise the businesses that had been built up by these companies, and not only to kick them out of the sector but also to totally monopolise the sector. So what we have in clause 52 is just one of the clauses that take out any reminder of, and any reference to, the previous version of accident compensation.

What we are seeing now, I think, is just changes as a result of ideology—no changes for logic or for the benefit of New Zealanders, but some subtle changes in wording. I would like the Minister to explain the difference between an “earner premium” and an “earner levy”. Why would she expend the time of the Committee, and the time of putting together lots of paper and cutting trees, to make some very small changes, which really reflect changes in ideology and politics rather than anything else?

But there is a bit of a concerning part of this bill, and it is one that I had not considered until this evening. Schedule 2 and sections 118 through to 128, are sections in the principal Act that deal with disentitlement, I would like the Minister to take a call to explain what the impact will be of omitting the words “is not liable to” and substituting the words “must not” in the number of sections that discuss disentitlement for accident compensation.

For example section 118(1) states that the corporation, instead of “is not liable to provide a claimant with entitlements for personal injury caused by a work-related gradual process, disease, or infection, if”—and then it lays out a number of different sections—changes the wording to “must not”. It really changes the entire meaning of those particular sections. The wording “is not liable” sounds as if the corporation has more discretion. There might be circumstances where the corporation legally is not liable to provide support, but as a result of weighing up the pros and cons, and sometimes the special circumstances that often Ministers are asked to consider, the corporation might be in a situation where it does provide support for a particular person just simply because of the special nature of his or her particular situation.

Changing “is not liable” to “must not” makes it very clear that the corporation has no discretion whatsoever. I would like to hear the Minister explain the reasoning behind that, because I was not on the Health Committee at the time when it was discussed, and did not have the opportunity to ask officials. But it seems to me, although we are looking at taking out four words and putting in two words, it does change those particular sections dramatically.

I would like to take a brief call to respond to the very valid question that Katherine Rich has raised. I understand that she was not on the Health Committee because she held a different Opposition shadow portfolio at the time. It was before—

💬 Darren Hughes: What was she?

Oh she was spokesperson on social development and employment, I think, but that was before she was demoted by her leader—and in quite an unjustified way, in my view. But I know that she raised the question genuinely. Frankly, we have now substituted for the expression “is not liable to” in some parts of the legislation, as outlined in schedule 1, the expression “is not required to”, and in other parts of the legislation we have replaced those same four words with “must not”, for the very reason that Katherine Rich raised. She said that she thought that “is not liable to” meant there may be some discretion—that the Accident Compensation Corporation was not legally responsible for doing so, and could not be held to be in breach of its statutory responsibility if it did not. That is what some of us may have interpreted that expression to mean, but unfortunately legal opinion thought otherwise. In fact, two legal opinions, from my recollection, thought otherwise, and that is a clear case that one is on a hiding to nothing unless one clarifies the situation by changing the law. So that is exactly the purpose of the change in both schedules 1 and 2.

Members will notice that starting with clause 4 in schedule 1, the words “is not required to” are substituted for “is not liable to”. Therefore the discretion exists, but it is a discretion on a case by case basis. The corporation is not required to do so—it is not an automatic entitlement. A does not necessarily follow if B has happened, whereas, as outlined in the schedule that Katherine Rich referred to, from section 118 onwards the corporation must not provide that. There is no discretion and no opportunity for the corporation to do so, because we have made it very clear that the corporation must not. So it is for precisely the reason that the member has raised in her question that we have separated out the 29 examples, I think—I may be wrong about the number, but however many there are—of “is not liable to” that are in the legislation, and instead of having that term, which could mean one thing to one person and another thing to others, we are making it really clear exactly what is meant by putting it in straightforward English. I know that Peter Brown will be ecstatic at the fact that this legislation actually states directly what it means. It cannot be misinterpreted, so this is one part of the legislation that I know Mr Brown will celebrate.

I am not sure whether Mr Brown is ecstatic over that, but I am sure Ms Dyson knows better. In relation to Part 2 I would like to take up the point of my excellent colleague Katherine Rich, who reminded us that unfortunately Labour felt the need to throw common sense out the window when it got into Government at the end of 1999 and got rid of any competition in terms of accident compensation.

During the many debates in relation to accident compensation there is a lot of trouble, effort, and discourse around the Woodhouse report—a copy of which I just happen to have with me this evening. As I look again through the report, I note that it was presented in December 1967, which is almost 40 years ago. As a report it has actually held up very well. But, of course, the world and New Zealand were very different places in 1967. In 1967 the Woodhouse report talked about housewives, and women generally were not upset or insulted at being so referred to, and nor should they have been, and nor should they be now, if they are in fact housewives. But that was a completely different world. The report talks about New Zealand as it was, and even under a National Government it was a very socialistic place. Farmers were very protected by the fact that Britain was not with the Europeans. It took all our products. The world was very different in terms of oil prices. The people who had oil in their countries did not go around putting up the prices. There were no problems like that at all. So we could have a rosy view of things. That is why this particular report talks very extensively about a no-fault situation, and about how we should not, in fact, look into how accidents have occurred.

It is, of course, that rosy view of the world that has allowed all sorts of silly payments over the years to be made to prisoners who escaped from jail and got injured—thank goodness—and now, under this Government, we are talking about paying them money because their feelings have been hurt. Who cares, frankly, if their feelings are hurt, because they did not care about the feelings of the people they hurt. But this Government does care.

This particular report goes on to say that there is no place for private insurance companies in the scheme. Of course, that was because, in those days—almost 40 years ago—the thought of the private providers providing anything in partnership with a Government was utterly unheard of. The Government was, of course, doing such things in those days as giving farmers all sorts of subsidies that they did not need, to produce stock, and all sorts of silly things like that—in fact, middle-class welfare, which is very much what this Government currently does but, of course, not to farmers, just to others. The farmers are very pleased not to have it because they are proud, independent people, and do not need middle-class welfare. But this is the sort of provision that we have here, where we are, in fact, harking back to a time of almost 40 years ago and saying that everything is rosy and we do not need to change.

Yet in our electorate offices we are consistently and constantly hearing complaints in relation to accident compensation, either from people who feel they are being badly treated by the Accident Compensation Corporation (ACC), or from employers who are feeling very badly treated by their levies.

I was in private practice at the stage that the Labour Government changed the rules in accident compensation. I was one of those small-business employers who found that their premiums doubled overnight when I had to go with the Accident Compensation Corporation and could not have a private provider. Many other people found the same. Of course, with private providers one does actually have the ability to say that one is a good employer and does not have any injuries, and therefore that can be taken into account.

By using that ideological reason for changing the whole scheme back to the past again, instead of looking forward to the future in a positive way in partnership with business—by harking back to “good old 1967”—this Government demonstrates that it simply cannot see its way forward. It still ties itself to the view that all employers are evil, that they are trying to rip off their staff, and that they would rather have people working in slave conditions. In fact the vast majority of employers—any who want to stay in business in this country—understand that their employees are the most valuable people in their business, and they cannot survive without them. They do not need this monopoly.

I wish to take a very brief call. Part 2 cannot pass without the ACT party having a say about competition and choice in terms of premiums. We did see some very positive changes for a very brief period—for 9 months, I think it was—when the former National Government, at the urging of ACT for 2½ years, opened the Accident Compensation Corporation out to competition. It did that, I understand, when New Zealand First left the coalition. But, as Judith Collins has just outlined, we saw some very positive changes. Employers around the country were very happy with the changes to accident compensation around that time. As we have heard, many employers noticed quite a significant drop in their premiums, because competition was available. People were still able to insure themselves with the State provider if they so chose, but competition did drive down many of the premiums. A small number increased in price, but those were very few. I remember talking to a bookseller at the time. He complained that his premiums had gone up. It is a bit difficult to see how injuries in the workplace in a bookshop might have occurred, but presumably competition meant that his premiums needed to be higher than they were.

💬 Katherine Rich: Paper cuts.

Perhaps it was paper cuts. Now, with the provisions in this bill, I suppose those will be covered by “infection”. However, the cost of premiums did in fact go down. At the same time the number of accidents also decreased, which also tells a story. It seems that personal responsibility was involved there. Employers recognised that providing safe workplace practices and having safeguards in the workplace were of benefit both to themselves and to their employees. It also seems that the employees took some responsibility for themselves as well. It was an ideal partnership—employees and employers working well together to achieve mutual benefit. It would be nice to see a little more encouragement from this Government for this sort of thing in the workplace, because at the moment I do not think that that attitude exists.

I would also like to support my colleagues in the National Party. They have made some very valid points on Part 2, particularly in relation to competition. Choice and competition are what make business successful in this country. If the Government does change after the election, then I am sure that one of the first things to happen will be that competition is reintroduced into the area of accident compensation and that we can at that time expect to see lower premiums again for most employers, employees, individuals, and business people, and a further drop in the number of accidents.

I want to concentrate for a moment on section 87 in schedule 2. I hope the Minister in the chair, the Hon Ruth Dyson, will take a call and focus again on subsection (2), which states: “The Corporation must provide the vocational rehabilitation for the minimum period necessary to achieve its purpose, but must not provide any vocational rehabilitation for longer than 3 years …”. I find it quite curious that here we have a Labour Government that has said that one of the major aims of the Act and of these bills is to focus on rehabilitation, but it is actually putting in an exclusion to rehabilitate.

Just the other day someone with a spinal injury from about 10 years ago came to my electorate office. He had had several fusions but had continued to live a life of pain. He came into the office unable to sit down. He tells me he is unable to sleep, yet he is expected to turn up for repeated assessments to see whether he can carry out a job. Over that period of time his ability to be able to do different things has changed. Whereas 9 years ago he might have been able to work at a computer, now he cannot even sit down for longer than a couple of minutes at a time. Yet the Accident Compensation Corporation expects him to train to be a computer worker.

It seems extraordinary that the Minister is saying in section 87(2) that the corporation must not provide any vocational rehabilitation. Is it not cutting off any possibility of hope for individuals that, as the course of their disease progresses, or gets better, they might not have a chance to rehabilitate? Surely this should be one of the main aims of this bill. I hope the Minister does clarify this—

💬 Jill Pettis: Where was this man in the 1990s?

It is a pity that the member opposite continues to interject at such a pathetically low standard. This is a serious point, because this Labour Government went about saying that rehabilitation would be a focal point in this legislation. Yet here we have the Labour Government saying that the corporation must not provide any vocational rehabilitation. It is important that the Minister take a call to explain that. As both my excellent colleagues Katherine Rich and Judith Collins have pointed out, we are reminded in clause 52 of the very sad fact that this Labour Government removed choice of provision from accident compensation.

Again, we have a Labour Government that goes about saying that injury prevention is the focus of this bill, just like rehabilitation. But what is the record of this Labour Government? Serious and medium accidents have actually gone up under this Labour Government, despite its spending more.

What happened when choice of provider came in? There was a tremendous commitment by industry to put in preventive programmes. That happened throughout every part of industry, from forestry to domestic work, and the rate of accidents decreased. Along with that came much faster efforts to rehabilitate, which is the very thing that the Minister is suggesting will be removed—under certain circumstances, I must admit. Certainly, there was the tremendous result of people getting back to work faster. Also, there was the added bonus of a dramatic change in the cost of premiums being lowered.

💬 Hon Ruth Dyson: HIH—a good cut at the apple; a very good company.

I can see the Minister there presiding over the monopolistic Accident Compensation Corporation, which undoubtedly, with time, will become inefficient in the way that all monopolies do. This is exactly what this Minister wishes to happen, and it is very, very regrettable. Undoubtedly, the facts were that the most dramatic changes—[Interruption]

The CHAIRPERSON (Ann Hartley): The member knows he cannot barrage like that.

The most dramatic changes we have seen with injury prevention and rehabilitation occurred between 1998 and 1999, when choice was brought into the accident compensation arena. That was hugely positive for this country and it is very regrettable that the Minister appears to be gradually increasing the grip of monopoly.

I understand that her other plan is eventually to equate all medical problems with injury, so they are exactly the same. That is the hidden agenda. To extrapolate it even further, she will have a great National Health Service, a big monopoly, just like in Britain—the third-largest employer in the world, second only to the Chinese Red Army and the Indian Railways. That is the plan of Ruth Dyson, yet we see here in schedule 2 a requirement that the corporation must not provide rehabilitation services.

In carrying on from my colleague, what are the words that Business New Zealand said? It said that the very words used to describe the Government members are “socialisation” and “de-privatisation”, because privatisation is anathema to the current Government. The schedules talk about earnings, and I note from new clause 36A on Supplementary Order Paper 365 in the name of the Hon Ruth Dyson that the Minister does not have to comply with section 270(2) of the principal Act in having access to the employers account and the residual claims account, or to the self-employed work account, and that the Minister can direct the Accident Compensation Corporation to attribute in full, or to apportion in part, to the non-earners account the costs of lump-sum compensation for permanent impairment caused by gradual process, disease, or infection. That is part of the move to avoid having to have scrutiny of the changes by the Health Committee—to avoid that public oversight.

What has happened is that the Government has brought in a substantial Supplementary Order Paper so that it can get access to all the funding it can get its hands on, to help pay for the costs associated with the changes. I repeat my request for the Minister to take a call and actually explain some of the substantial cost implications in regard to this bill. They are substantial, and they have been reiterated already. Perhaps the Minister would like to take a call—or is it far easier to answer the other questions, and not the ones about costs? After all, this Government does not have a very good understanding of the fiscal implications of its legislation. I think the Holidays Act is a very clear example of that. The Government completely forgot about, and did not take into account, the cost implications of that Act on the health and disabilities sector.

In regard to the amendments to schedule 1 of the principal Act, I note that under clause 51A on the Supplementary Order Paper clauses 66 and 69 of that schedule are amended to add, after the word “spouse” in both places where it occurs, the words “or partner”. I just wonder what legislation that is in keeping with. Perhaps the Minister will take a call on that, although we know the politically correct response we would get. Is that amendment consistent with all the other politically correct legislation that Labour has been putting through the House and expecting the New Zealand public to swallow? It brings to mind the transgender legislation, which has been put on the back-burner, being a little too much of a hot potato just prior to the election. The Minister may like to take a call and let us know whether adding the words “or partner” after the word “spouse” is actually consistent with current legislation. After all, with all the changes that have taken place, who would know? There is so much change that it is a bit hard to keep a handle on it all.

I reiterate that given the substantial changes in the bill, and also given that we have not had a chance to put all the stuff on the Supplementary Order Paper through the select committee, the Minister may like to take a call and let us know what the cost implications are. The cost implications are great. We no longer have a choice about accident compensation levies. In my own circumstances, we pay huge premiums on our farming enterprise. We do not have a choice. As was said tonight in the Chamber by Government members, this move actually expunges it from the record. That further increases the monopolist grip on accident compensation, as my learned colleague Dr Paul Hutchison said. Where does one go from there? The terms “de-privatisation” and “socialisation” are the words used with regard to this Government, and that can be seen in every piece of legislation that it puts through this House. It is an absolute disgrace to the New Zealand public.

I move, That the question be now put.