Accident Compensation Amendment Bill

I will begin by refuting some of the assertions that the Minister for ACC, Dr Smith, made, knowing them to be wrong. The first is his claim that the current Labour Opposition opposes the date for the extension to full funding. He knows that his statement to that effect in his speech a minute ago is totally incorrect. He knows that it was Labour Party policy at the election to extend the date for full funding. He knows that I have had a member’s bill in the ballot all of this year that could have made this happen a year ago. He knows that in the Transport and Industrial Relations Committee report on the Injury Prevention, Rehabilitation, and Compensation Amendment Bill we said in our minority report: “We support the extension of the date for full funding of historic claims, but oppose the bill overall.”

What Dr Smith said in his speech was the opposite of what I have just said. Listeners to this debate can judge for themselves as to whether there was a fair representation of the Labour Party position by Dr Smith. It clearly was not. We know that most of the levy reductions saved by this bill, the Accident Compensation Amendment Bill, are of a consequence of extending the date for the full funding of those historic claims that have not yet been fully funded. Yes, this party still stands for full funding. We agree with the extension of the date for full funding. We know, and the Minister knows, that that is the most substantial cause of the levy reductions occasioned by this bill. He likes to hide from that reality. That is the reason that he has not extended the date for full funding until now. He tries to use the levy reductions that are occasioned by extending the date for full funding of the tail as an excuse to cut other parts of the scheme.

Which are the other parts of the scheme that Dr Smith is cutting? Well, they are real cuts. They will hurt people. They will hurt people who have had accidents at work, especially. At present someone can be put off accident compensation cover. When that happens the person’s earnings-related compensation comes to an end, and rehabilitation treatment, physiotherapy, orthopaedic interventions, etc. come to an end, after he or she is deemed to be ready to return to the workforce. Currently people can be deemed to be ready to come back to the workforce only if they are well enough to work for 35 hours a week. Most people need to work for 35 hours a week in order to keep the wolf from the door. This bill changes that. It says that people can be pushed off accident compensation when they are capable of working for 30 hours per week.

That works in concert with another change to the rules, which says the Accident Compensation Corporation (ACC) will no longer have to have regard to pre-accident earnings. The combined effect of those changes is that someone’s income could halve after he or she comes off accident compensation. Someone can be put off the scheme when he or she is capable of working for only 30 hours a week and that person can be put into a job where he or she is earning the minimum wage. We had the example, which I think is quite a moderate example, of a moderately paid person in the banking industry who gets a computer overuse injury. He or she can be off work for a substantial period of time, so the employer needs to have someone else in that position. The contract of employment is frustrated, through no fault of the employer or the employee. That person loses his or her job and goes on to accident compensation. Now that person can be forced off cover when he or she is in a position to work as a stacker in a supermarket, working for the minimum wage. That person could be working for 30 hours on the minimum wage as a shelf stacker, and his or her income could halve when compared with that in his or her prior occupation as a bank teller. That is what this bill does.

We are told that this legislation is necessary in the name of the affordability of the scheme. That is nonsense; that is wrong. The Government did not present any information regarding the relative costs of this scheme compared with similar costs in Australia until the Opposition, as is its right, asked the officials to prepare some information comparing the costs to employers of New Zealand accident compensation with costs in the Australian schemes. I had thought that information would be prepared by the Government or for the Government by departments, but, no, we did not have it. I had thought that submitters that came from business organisations that were multinationals, or their representative organisations, which have access to that information from multinationals operating in jurisdictions like Canada, Australia, the United Kingdom, and the United States, would provide that information to us. But, no, we did not have any information on that from those submitters, despite requests from the Opposition that they provide it. The only information we got was that which the Opposition requested from the officials. When it came, it showed that levies for employers in Australia for employee risks are significantly higher than in New Zealand, sometimes twice as high. On average, they are 50 percent higher than those levies are in New Zealand. There is no justification on that basis for making accident compensation provisions more miserable for New Zealand workers than they currently are.

Let us not pretend that accident compensation is great now. Being deemed fit for work does not mean to say someone gets a new job. Already more than 50 percent of the long-term claimants that go off cover are not in full-time work. A significant proportion of them languish on the dole queue at a cost to the State, rather than to their former employer through accident compensation levies. Already a significant proportion are without any income, probably because they cannot get a job and their husband or wife is employed. Already a significant proportion are in only part-time work. The majority of people do not get back to full-time work for a very, very long time. So the Government should not give us the affordability line, because the only information we had is that accident compensation remains cheaper here than it is in Australia.

The Minister talked about accident rates and said that we have not done any work on accident prevention in New Zealand. That is rubbish. The previous Government improved the performance of the Department of Labour in terms of workplace inspections and maintaining safety standards. That did see an improvement in safety records in New Zealand. That was necessary because it is fair to say before then the trend was wrong. It is also true to say the work that was done on road safety, including improvements through better highways, better safety standards for new vehicles, educational programmes, and drink-driving enforcement, etc. saw a drop in accident rates per 100 kilometres driven—I think that is right, is it not, Annette? [Interruption] Yes, it is true that total accidents may have increased, but during that 10-year period a lot more kilometres were driven, because of the higher population, which was driving further because the economy, at least under us, had improved.

There is no doubt that this legislation makes the accident compensation system worse. In my opinion, some of the egregious changes will be taken advantage of following the privatisation of parts of the scheme. One would have to be naive to think that a private insurer will want to contribute to accident prevention work in the same way that can be achieved through a State-owned monopoly. One would have to be naive to think that one would not use the right to push people off cover once they were deemed to be work-ready for 30 hours’ work a week, if one did not have to have regard to their pre-accident earnings. One would have to be naive to think that an insurance company that has the right to push someone into a lower-paid job will not do so. The insurance companies will do so; they will act as they do in other spheres of insurance. The companies will do what is permissible within the letter of the law and within the letter of the policy, to the extent that they can, in order to minimise their costs. These changes, together with looming privatisation, which is the price that the ACT Party has exacted for its support of this legislation, mean that New Zealand workers will once again be worse off as a consequence.

Time and time again we have heard from this National-led Government that its ambition is to improve the lot of New Zealanders, especially New Zealand workers, in order to approach the position that Australian workers are in. Yet in this area, despite the facts that in New Zealand levies are cheaper for employers by quite a margin and that we already have a system that is the envy of Australia, we see that the lot of workers is to deteriorate. Their lot will deteriorate because the generosity of the provision that they get is to worsen.

I will say something briefly about Dr Nick Smith’s accusation that Labour is in favour of Graeme Burton and other criminals. That is not correct. Labour does not favour any compensation being paid to Mr Burton. He should not receive earnings-related compensation; he should not receive lump-sum compensation. He has neither of these. That issue is an absolute sideshow.

💬 David Garrett: You think he deserves a $10,000 leg.

But we have David Garrett—and other people who are as inhumane as he is—saying that not only should criminals lose compensation but they should not even get a prosthetic leg. That is where the Labour members disagree with those members, because we say a man without a leg should have a leg. Maybe he should not be given an expensive titanium one, but he should at least have a wooden leg to hold him up.

I am quite happy to stand up and be judged for saying that, because I think that that is fair and most New Zealanders agree with me.

💬 David Garrett: That’s not what you said last night.

I say to Mr Garrett that that is exactly what he said, and I tell him that he should reflect on the inhumanity of his position. That is not to deny that Graeme Burton is a bad and terrible person. But the whole issue regarding him is a sideshow created by the National Party to deflect attention away from the reality that with no justification, this legislation decreases the compensation and rehabilitation services that are needed by New Zealanders when they are injured. They gave up their rights to sue in exchange for receiving those services, and they are substantially losing them through this legislation.

Debate interrupted.