Injury Prevention, Rehabilitation, and Compensation Amendment Bill

Today we have heard a series of statements made by the Minister in the chair, the Hon Ruth Dyson, in which she indicated a complete faith in the comments made by individuals—Paul Hutchison and Gordon Copeland—and in which, at the same time, she rejected their concerns. That has also been the situation with the legislation we are debating today. The Government has gone about saying how this is good for New Zealand, how it is about equality and treating employed and self-employed people together, and how employers have nothing to fear from this legislation. But the reality is that this legislation will have a dramatic effect on many employers and some self-employed people. It will increase many of their costs of doing business, through the increase in the levy amounts. It is part of a plan that this Government has had all the way of treating everything as being equal. It thinks that there is no difference between business entities—there is no difference in the reasons why people go into self-employment or into employment relationships. We are seeing that through other parts of the employment law legislation as well, with the intention to treat contractors the same as employees.

That is all part of the mentality of this Government. It talks of removing the employers’ account and the self-employed work account and inserting a definition of a work account by omitting all references to the employers’ account and the self-employed work account and replacing them with references to a work account. We see that all through Part 2, “Transitional provisions”. That shows an intention by this Government to try to make everything the same—its kind of level playing field. The Government believes that everything is the same in this world. The reality is that it is not all the same. There are different business interests and there are different ways of structuring one’s business, because people take different actions and have different responsibilities.

Some of the implications of what the Government is doing in this grand vision of equality will have a major effect on many businesses. Businesses have paid a large sum of money into these accounts over a number of years. The employers’ account has reserves of over $500 million, and in the self-employed work account there are reserves of over $115 million. These people have paid money into these accounts under the genuine understanding that this money would be used for the purposes for which they paid it. Employers did not pay that $500 million on the basis that it would be put together at some place and point in time as part of some grand plan for equality thought up by a Government that believes it knows best. Employers paid that money in over time because they were doing what they thought was the right thing under their legislative requirements. They expect that a Government would also repay that money if, over time, it was needed. This Government has not shown the good faith that the employers have shown. Instead, it has used that money for its own ulterior motives. It has taken away the element of good faith that is essential for business to grow and prosper.

This Government has no intention of looking after the self-employed or the employed. When the business community, whether self-employed or employed, has made submissions to this Government they have been pretty well ignored and dressed up. The Government has said: “Oh, we’ll look at them as part of some review at some point in the future.” This is one of those kinds of reviews, and it has been shoved under the radar in a very short period of time. The Government has not given people the time to adjust, to make submissions, and to see what the Government is doing in this case. All it is doing is pushing this through in a very short period of time, with the intention of taking away the hard-earned money that employers have put into that account over a number of years.

That will hurt employers. It will also hurt the self-employed. Some large self-employed revenue rate increases that we have seen in the documents provided to the select committee include increases for the police. If their 2006-07 rate of $1.03 were separate it would be 73c for 2007-08, but under the merged ratio, they are paying $1.08 in 2007-08. That is a percentage change of 48 percent from having a separate account to having a merged account. The police are going through a pretty tough time at the moment with this Government, which will not resource them. It is a Government that will not stand by the police in time of need, and a Government that blames them for any driving infractions that may happen if travelling from Timaru to a game of rugby in Christchurch. But, at the same time, the Government is willing to shaft the police by putting up their levies.

I am proposing a very sensible amendment to this part of the debate. It is to defer the implementation of this bill until 1 April 2009. It is the only sensible thing to do. Judging from what some of the political parties sitting in this House—the Greens, the Māori Party, and New Zealand First—have said, I do not think they have had an opportunity to understand the implications of the passage of this bill on the supporters whom they claim to represent, the self-employed. I want to look after these party political colleagues. I do not want them or their electorate offices to be facing outraged self-employed people in the next 2 years. So I am seeking their support to make sure that this bill is deferred for 2 years so they can have time to think about the implications.

Sitting suspended from 6 p.m. to 7.30 p.m.

I am seeking for the sensible parties in this Parliament to support a very sensible amendment—to delay the commencement of this bill to 1 April 2009, for a very good reason. National will then be in Government, and when I become the Minister for ACC I will not be an apologist for the Accident Compensation Corporation (ACC). I will not put myself up there and tell the self-employed that they have to front up with $100 million extra. I will not confiscate the $500 million in the employers’ account so that ACC can feel good, smooth the levy, and not forego the opportunity to invest. According to the Minister in the chair, the Hon Ruth Dyson, she is the apologist for ACC.

It is typical of a Labour Government that it will not trust the self-employed to invest their own money. It will not trust employers and workers to know how better to spend their own money. But the contempt of this Minister towards employers was evident when she said that the employers did not deserve their rebate. She blatantly said that they did not deserve it; I am not too sure what they have done to upset the Minister. We will be very clear, when we become the Government, that ACC will serve the people it is set up for. ACC will not turn around and use its monopolistic position to basically tax people, keep the surplus of $600 million, just so that it can feel secure if it makes any calculation of premiums incorrectly. When we think of it, we remember that last week in the House we were told by the Minister that that monopoly agency, ACC, was spending $5.1 million just to market itself in a branding exercise. Yet it is a monopolistic agency; people have no choice of going somewhere else, or through various sources, to pay their premiums.

So I am seeking the support of the other parties in Parliament, because after the previous debate—or lack of debate—it seems they might not be clear that the passage of this bill will actually impose $100 million worth of surcharge in the next 2 years for self-employed people. So when all those self-employed people come knocking on the doors of New Zealand First, the Green Party, and the Māori Party, I hope those parties will be able to tell them some good reasons why they supported a bill that has imposed $100 million extra on those self-employed in order to bring the surplus on the reserve to a margin of 53 percent, although ACC has indicated all the time that an 11 percent margin would have been sufficient. The law stated very clearly that all the account had to achieve was to be self-funding. At the moment the reserve accounts are showing surpluses of 20 percent and 63 percent, yet this Labour Government is trying to push through a bill, without consultation, to impose $100 million extra on self-employed people. Members should try to explain to some of the people in the meat industry why they should pay for that.

I am pleased to have the opportunity to speak on the “Title”, “Commencement”, and “Principal Act amended” clauses of this Injury Prevention, Rehabilitation, and Compensation Amendment Bill.

R Doug Woolerton: This man should be the Opposition spokesperson on health—wonderful man.

Despite the excellent remark from my colleague over there from Hamilton, I believe that the title of the bill is clearly quite inept. I have a few suggested alternative titles that would be appropriate—for instance, “The Labour Government Defies Common Sense by Rewarding Those at High Risk and Penalising Those at Low Risk Bill”. Then we might go to the Minister herself for “The Hon Ruth Dyson and”—we will add in—“the Hon Mark Gosche Denial of Basic Insurance Principles Bill”. We have heard those members tonight absolutely denying the concept of risk rating. But they love the idea of merging things and pooling them together, of socialising, and of taking all the common-sense incentives—the time-honoured principles—that belong to insurance away from that industry. Or perhaps we could call this bill “The Labour Government’s Let’s Break Faith with Employers and Take a Few Hundred Million Dollars for Redistribution Bill”, because that is exactly what the Government has done.

I think it was very salutary to hear Gordon Copeland from United Future, the party that is partly responsible for keeping this Government in power, say that what the Government was doing was daft, and to hear the Minister first praise Gordon Copeland for his insight and intelligence but then say she was not going to follow his common sense. Mr Copeland said that the risk margin at present is 163 percent but that the Accident Compensation Corporation (ACC) itself suggested a risk margin of only 111 percent. Even if that margin were increased to 120 percent, as Gordon Copeland suggested, $468 million would still be stolen from employers—$468 million that should be given back.

What else could the title most aptly be? Well, let us call the bill “The Hon Ruth Dyson Let’s Erode the Accredited Employers’ Scheme Because it is Working Too Well Bill”, because that is the fact of the matter. I outlined earlier in the debate just how well the partnership programme is working—how there is a situation whereby 25 percent of employers are not under direct control of the Government monopoly, and how they do very well. In fact, they do so well that their costs are about one-third of those of the ACC, and, on average, they get employees back to work in about one-quarter of the time taken by the ACC. I believe that it is because of that that the Government is systematically trying to erode the programme by changing money over to the residual account so that the levies of that account will go up. It is manipulating the employers’ and self-employed workers’ levies and is artificially keeping them down so that most people out there—who do not really understand this—will think: “Aha! They have kept them down.” But the Government is only fooling itself; it will be found out sooner or later.

Perhaps the other suggestion for this title could be “The Labour Government’s Let Fiddle the Levies Bill”, because, indeed, that is what the Government is doing. It is a great shame that the Minister was firstly prepared to say that the amendments I suggested to clause 11 were useful and it was helpful to have transparency, but then said—having gone through all the amendments I wanted to make to Part 1 and suggested that it would be helpful for people to understand how the levy process worked and to make it transparent—she was sorry but she was not prepared to vote for it. She did, however, say she was prepared to ensure that this information would be available—and I very much hope she does keep to her word in that respect. I was delighted that she did see some intelligence and insightfulness in the speaker’s amendment, and I too recognise her for her insightfulness in that respect.

I guess that the other title for this bill could be “The Labour Government’s Let’s Fiddle the Residual Account Bill”. I just want to finish off the six alternative titles that would aptly replace the title we have now. Indeed, the title “The Labour Government’s Let’s Fiddle The Residual Account Bill” is quite appropriate. We know that, by legislation, the ACC should be fully funded by, I think, 2014, yet, under this Labour Government, there has been no improvement in the position over the last 4 to 5 years. That is hugely, hugely concerning.

Finally, I reiterate my colleague Pansy Wong’s plea that it would be very helpful if her amendment to delete the commencement date of 1 April 2007 and replace it with 1 April 2009 was supported. By that time there will be a National Government in place and we will bring sense to New Zealand’s accident compensation scheme.