Debate on Crown Entities, Public Organisations, and State Enterprises — Accident Compensation Corporation

The Accident Compensation Corporation is a Kiwi treasure. For 40 years now it has been providing no-fault, no-liability compensation and treatment for people in New Zealand who are injured. We all pay into it and we all expect it to be there for us when we need it, and for the most part, it is. There is almost nothing like it elsewhere in the world. It is something that New Zealanders should be immensely proud of. But over the last 5 years, under this National Government, the faith of Kiwis in ACC has been sorely tested. We know that it has been overcharging people on their levies. We know that it has been finding spurious reasons to avoid paying out compensation, to avoid providing treatment, and that it has dramatically cut its investment across the board in preventing injuries.

We know as well that people have lost their trust in ACC to keep their private details—their medical details—private and available only to the people who really ought to have them. And we know, with recent developments, that ACC has actually been collecting far too much information. For those people who actually turned round to ACC and said; “I’m sorry, but the law does not allow you to collect this much information.”, we know that under National they had their compensation cut. That is why people are losing faith in what ought to be an absolute national treasure.

But the abuse of the ACC has reached new heights this year as this Government has struggled to prove to New Zealand that it has managed to get the books back into surplus. That was the big goal for the 2014-15 Budget. It was that the National Government would get the Government books back into surplus. My goodness, it has stretched the truth in all manner of ways to try to convince New Zealanders of that, but the biggest travesty is what it is doing in ACC.

ACC came to the Government and said: “You know when you put the fees up when you first came into Government? You know when you racked everybody’s ACC levies up far higher than they needed to be? Well, we’ve taken enough money. We’re more than fully funded.” In fact, the work account has nearly 140 percent of the funding it needs not just to meet this year’s claims but all the future costs of those claims. It has not just the 100 percent that it needs to meet those claims but another 40 percent on top of that. The earners account is 130 percent funded—

💬 Dr David Clark: 130 percent?

—130 percent funded—and yet this Government continues to overcharge Kiwis on their ACC levies. Why? Because the levies that come in go towards the National Government’s supposed, made-up, phoney surplus. So New Zealanders are paying far too much on their ACC levies and $50 a year too much on their car registration just so that the National Government can pretend that it is doing a good job with the economy and that it has got the books back into surplus. Look, getting the books back into surplus was a really positive goal for this Government to have had—we applaud that—but it should have done it through economic growth. It should have done it by getting Kiwis back into work so that it was taking more income tax—so that Kiwis could afford to spend money at the supermarket so they might pay more GST. That is how the Government should have got the income up, not by charging people far more than it needed to on its ACC levies.

And the Government is not doing it just this year; it is planning to do it next year as well. ACC has said that it can cut levies by $650 million and the corporation would still be sustainable. Is the Government going to do that? No way. No way is it going to cut $650 million from those ACC levies, because it still needs that money so that it can pretend that it has got the books back into surplus.

New Zealanders love ACC. They love the fact that it is there when they need it. They love the fact that it is more cost-effective than any other insurance scheme anywhere else in the world. They hated the fact that the National Government was going to try to privatise it. Thankfully, it has given up on that idea. The National Government needs to give up on overcharging Kiwis on their ACC levies and start giving New Zealanders a fair deal.

I am very pleased to be here to speak on ACC in this debate. It is disappointing to have heard Iain Lees-Galloway, the last speaker, being so angry and frustrated, in some ways, that the National Government has actually put the ACC books in order and is competently able to actually start returning levies—[Interruption] You see, those members are yelling and screaming. They do not like it, you see, because we know exactly the Labour record on ACC. Like a number of things that we picked up when we came into Government, it was in bad shape and in disorder. We know that with the claim costs. I have just got a note here, and I was noticing that the cost of claims increased by about 57 percent in 4 years under Labour. It has an inability to actually run ACC properly and appropriately. It is a sort of cash cow approach, and it has actually taken the National Government to take the bull by the horns, tidy things up, fix things up, and not only return the books to such a state that we are able to reduce levies in order to return money to Kiwis but to actually line up and put a focus not only on the care that is required through ACC but also on prevention, and to have those two line up. So I think we can be very proud of what ACC is doing.

I know that over recent weeks, actually, in the Transport and Industrial Relations Committee we had people from the sensitive claims unit of ACC come in and give us a briefing. It was a really interesting insight into the work that they do. It is really important work. As a constituent MP, I often get people coming in on ACC issues. I think it is important to acknowledge that it is a fraught area and, more often than not, it actually causes difficulty for people. I suppose it is one of the roles as a member of Parliament to try to advocate on those issues. So nothing is perfect by any means, but ACC is actually in good shape and in good form.

We know that in the most recent Budget we have indicated another total of $480 million worth of levy cuts for Kiwis this year and into next year—really important—and a lot of that is going to actually focus on the motor vehicle account and the levies there on motor vehicles. In fact, from next year Kiwis may well find that their registration costs are down by about $130. Why? Once again, we have focused on allowing ACC to do its core job and to do it well, and, therefore, to return money to Kiwis where it is due. Unfortunately, all we have heard from the Opposition is a lot of angry vitriol that this might be done at all. So that is really important there. The levy cuts, though, that have been indicated in the Budget are sitting on top of a whole series of levy cuts so far. As of 1 April this year New Zealanders started saving about $387 million in ACC levies over the last year itself. So that has made New Zealand households about $180 better off, and, actually, large employers could have saved up to $6,000 a year as well in terms of levies. So when we look at what the Government does, it is a broad approach, and ACC has been part of that.

But a big chunk too is not simply putting the accounts in order. It is not simply trying to provide the best service to Kiwis but also focusing on that preventative side. We know that ACC spends a lot of money in this area because of the old adage that prevention is better than cure, and there has been a major reboot in the injury prevention activities of ACC. In fact, we have seen a doubling of the investment in this space. We have also seen, I think it is important to mention, particularly in the light of the report released by Sir Owen Glenn yesterday, that a big focus of ACC—and driven by this Government—is on preventing sexual and family violence. There is a lot more work working within the educative space to try to put these messages out. As I said at the start, we had the sensitive claims unit come in and talk us through the work that it does. We are also conscious of work that is happening within the integrated services for sensitive claims. This work should go live in November this year. There is really important work in that space.

In closing, I think one good thing to note in particular around this is the level of care that ACC already provides for people who are seeking assistance because of sexual abuse, domestic violence, and so forth. They can get 16 hours of immediate support from ACC. A claim has to be lodged, but they do not have to wait for the confirmation of that claim to get help. It is just a small example of the activities and the changes that are occurring in this space. So, returning to where I was at the start, I think we on this side can be rightly proud of the focus of ACC and the work that it is doing, and proud that we are returning money to New Zealanders and that they are not having to pay more on their levies than they need to. Thank you.

Report noted.

Electoral Commission