Accident Compensation (Financial Responsibility and Transparency) Amendment Bill

I move, That the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill be now read a second time. This bill amends the Accident Compensation Act 2001 by making important amendments to the existing approach to funding ACC’s levied accounts. In particular, the bill strengthens the stability of the accident compensation scheme by creating a more financially responsible and transparent approach to setting levies and enabling more sustainable and stable levy reductions in the longer term.

ACC has become a critical part of New Zealand’s economic and social fabric, providing no-fault cover for all New Zealand residents and visitors covering motor vehicle, non-work, and workplace injuries. In 2008 this Government inherited a $4.8 billion hole in the ACC accounts. The Government and ACC have worked hard over the last 6 years to improve the scheme’s finances and the way we treat injured people. The bill before the House achieves this through its objectives by making two key changes to the ACC scheme. The first change is to introduce a more principled and transparent approach to setting levies. This is achieved through Part 1 of the bill, which proposes three core measures. First, the bill consolidates and clarifies important principles of financial responsibility that will underlie the levy-setting process. These principles signal the importance of setting levies to meet the expected lifetime costs of claims, ensuring the long-term solvency of each account and avoiding large changes in levies.

Second, the bill requires the Government to set the overarching funding policy through the publication of a funding policy statement, and, in turn, requires ACC to give effect to this funding policy statement. The statement will set out the target level for the funding of each account, an approach to managing deviations from this target, any limits on annual levy changes, and any circumstances in which levy changes are not required. As such, the funding policy statement will provide the Government with a suitable method of expressing its funding preferences. It will support a closer match between the levies that ACC consults on and recommends and the final decisions on the levy rates made by the Government. Levies are significant compulsory charges and it is important that the role of the Government in setting levies be reflected from the very beginning of the levy-setting process, not just at the end.

Third, the bill increases the reporting requirements for ACC so that the public is better informed about the impacts that the new levy rates will have on future levy rates and other aspects of ACC’s funding. This will help to ensure that emerging pressures are fully transparent and can be managed.

The second change in the bill is set out in Part 2. This part helps to ensure that residual levies are not over-collected, by allowing for their collection to be discontinued sooner than is currently required in legislation. Recent evaluations suggest that the residual liabilities are now lower than the amounts specified in the Accident Compensation Act. Since 2009 there has been a significant improvement in ACC’s claims management, regulatory changes reducing the cost of claims, changes to discount rates, and continuing excellence in the performance of the ACC investment portfolio.

I turn now to thank the Transport and Industrial Relations Committee for its consideration of this bill. During the select committee process the committee received a number of submissions on this bill. Submitters generally expressed support for the reform, although they held different views on the best way to effect change. As a result of the select committee process, the bill returns to the House with a number of amendments that support the bill’s core objectives of promoting increased financial responsibility and transparency.

An important change to Part 1 of the bill is that the Minister for ACC will now be required to consult such persons or organisations as the Minister considers appropriate before issuing the funding policy statement. This requirement to undertake targeted consultation will complement the public consultation on levy rates that already takes place and that is an integral part of the levy-setting process providing key stakeholders with an opportunity to present their views on the overarching approach to funding ACC’s levied accounts. This will help to enhance the transparency of the funding process and the accountability of the Government to levy payers.

Following on from this, the Minister for ACC will be required to issue a funding policy statement within 12 months of the passage of the bill rather than 3 months. This will ensure that sufficient time is allowed for consultation and to ensure the introduction of the funding policy statement occurs before a levy round and not part-way through. A further important amendment made following the select committee process is to ensure that it is clear that the principles of financial responsibility in the bill are balanced against each other and alongside the public interest under section 300 of the Accident Compensation Act 2001.

The select committee also agreed to some important amendments to Part 2 of the bill. The first change is a consequence of a recommendation from the Regulations Review Committee. The committee recommended a change in approach to removing the residual levy provisions in order to reduce the complexity of these provisions. Rather than setting the date for removing the residual levy provisions by an Order in Council, the bill now provides for the Minister for ACC to set this date by notice in the Gazette.

I thank the Regulations Review Committee for its contribution to the bill. I want to personally acknowledge the chair of the Transport and Industrial Relations Committee, Jonathan Young, for the good work that has been done on this bill, and all of the other members of the committee. I welcome their report. I also appreciate the contribution of the Regulations Review Committee and I thank all those who made submissions on the bill.

The Government has delivered a significant reform and improvements to the ACC scheme and more than $1.5 billion of levy reductions, with more planned over the next few years. As I have noted, in 2008 this Government inherited a $4.8 billion hole in the accounts. The Government and ACC have worked hard over the last 6 years to improve the finances and the way we treat injured people. Now that the scheme is finally in a position where it is essentially fully funded, this bill will enable successive Governments to make funding and levy decisions in a more principled and equitable way and to smooth out the effect of economic shocks over time. This means more stable and certain levies for all New Zealanders. I commend the bill’s progress to the House.

If only the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill did actually reflect the title that it has been given, that would be great. That would be a really good start, because those who have been following this debate might well imagine this bill to be the bill that will actually stop the Government from overcharging ACC levies, as that Government has been doing to the tune of $350 million a year because of a decision that it made—and the decision was announced publicly; it was not even embarrassed about it. When Judith Collins was the Minister for ACC, she said that the Government had set a levy that was higher than recommended by ACC in order to get to surplus. What the Government was doing was unnecessarily hiking up ACC levies to try to get the books into surplus. And guess what? It still failed. Even though it ripped off every worker and every company right across New Zealand with higher than necessary ACC levies, it still failed to get to surplus. That is the record of this Government.

So here we are with the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. Surely this is the bill that will say to the Government: “Hands off ACC levies. They’re to be used only for the outcomes of accidents and injuries, not for propping up your failure to get to surplus.”? Sadly not—sadly not. What a missed opportunity. But the Labour Party can save the Government from this embarrassment, because at the Committee stage—

💬 Iain Lees-Galloway: Here to help.

We are here to help, and at the Committee stage, we will propose an amendment that will make it absolutely clear, with regard to this bill, that the part of the Accident Compensation Corporation Act that requires the Minister to act in the public interest is the public interest in reducing accidents and injuries. It is not the public interest in just any old thing that the Government thinks it wants to do, like propping up its failure to get to surplus. No, no, no—our amendment will ensure that the public interest argument can be used only in order to reduce accidents and injuries. That is how it should be if this is truly an Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. So I am looking forward to the Government supporting this amendment, because if the name of the bill is going to be fulfilled, the Government will genuinely do that.

I do want to put the Government on notice, because at the moment there is very tenuous agreement from the Labour Party towards this bill, and I will explain why in a minute. If the Government does not accept our amendment, then that is very likely to change, because, clearly, the bill is not going to deliver what it purports to deliver. Actually, it is even worse than that, because when people made submissions on this bill, they made submissions on the basis of the bill that came to the Transport and Industrial Relations Committee. The amendments that the Government members pursued in the select committee have, once again, fundamentally changed the bill that was supported by many of the submitters. I would hazard a guess that many of those submitters would not agree with the bill in its amended form.

Here is one submitter who I believe would not approve of this bill in its amended form: Business New Zealand. That is right—the Labour Party has found itself in the enviable position of being in agreement with Business New Zealand; or should I say that Business New Zealand has decided to agree with the Labour Party that, actually, ACC levies must not be used to prop up the Government’s fiscal position? That was, in fact, the submission from Business New Zealand. It came along to the select committee and said that it wanted a change in the bill in order to reflect that. The Labour Party is delivering exactly that change in the amendment that we will come forward with at the Committee stage, because we do not believe in cheating the system in that way. ACC levies are, in fact, for improving and treating injuries and accidents at work, on the sporting field, and in the home. That is their purpose; not propping up Bill English’s failed attempt to get to surplus.

The reason why we find ourselves inclined, though, to support this bill none the less is that, actually, what it does is expose the sham, which was started by Nick Smith and is being continued today by Nikki Kaye, of pretending that the ACC system was in deep, deep trouble under the Labour Government. The part that we strongly agree with is the part that says that the system is actually doing so well that the residual levies that were put in in 1999 in order to cover the full lifetime costs of injuries and accidents—the system is going gangbusters—are likely to be able to come off much earlier than planned. That very act exposes the sham of Nick Smith’s trying to pretend that the whole system was bankrupt. That is what he tried to tell the country. It was utterly wrong, and this bill proves it. Why would the residual levies be coming off much earlier than planned if that was, in fact, the truth? It clearly was not the truth, and this bill proves it. What did the Government do at that stage? It pretended that the system was bankrupt. It hiked ACC levies way up. The National Government hiked up ACC levies and then kept them at an unnaturally and unnecessarily high level for years, by its own admission, in order to prop up the failure to get the Government’s books into surplus. What a rip off—what a rip off—that has been for every worker and every company in New Zealand that has been paying those ACC levies.

I would be much fonder of this bill if, in dealing with accident compensation financial responsibility and transparency, this was the sort of bill that fixed up the shambles that Nikki Kaye has created over ACC motor vehicle levies, because if it did that, it would have my full support. What a shambles. It has been like watching a slow car wreck happen, actually. I was going to say “train wreck”, but in this instance it is a slow car wreck, because, before these new ACC levies with these risk ratings came in, 24 models amounting to about 115,000 cars had to be reclassified because she had simply got it wrong—she had simply got it wrong. The travesty is that she then went and convinced the Hon Michael Woodhouse to use exactly the same sort of risk rating process to decide what was a high-risk and a low-risk industry, and, wow, did that work! Now we know that worm farms are more dangerous than cattle farms, of course!

What we find out from Nikki Kaye is that cars that have exactly the same safety specifications and are exactly the same model but that have been called a different name in Australia are actually more dangerous than each other when it comes to the New Zealand environment. Simply putting that Australian information together with the New Zealand crash data has been a complete and utter shambles. It has also resulted in thousands of New Zealand motorists being overcharged for ACC levies for their motor vehicle registration, and that is continuing. Although the Minister has accepted that she made a mistake in 115,000 instances—and that was on day one—still today when people raise their issues with ACC about other mistakes that it has made with other models, it refuses to acknowledge them and it does not refund the ACC levies for those motor vehicle registrations. So, again, we have the Government overcharging thousands of New Zealanders for their ACC levies, and that needs to stop. Sadly, this bill will not achieve that, and I look forward to debating this further at the Committee stage. I look forward to the National members actually agreeing with an amendment coming forward from the Labour Party and supported by Business New Zealand to stop the rort.

I am very pleased to stand and speak and respond to some of the comments of the previous speaker, Sue Moroney. Business New Zealand made some comments when it submitted to the Transport and Industrial Relations Committee. One of the comments it made, which that member is speaking about—whether we agree with it or not, and I have no doubt that she would agree with it—was that the previous Labour Government also did what it said. It said it was across Governments. And it was not just Business New Zealand who said that; there was another submitter. That is their view—that is their view.

💬 Sue Moroney: No, they didn’t. Be honest.

Under Labour—if you go back and read those submissions, you will find what I have said is true. Under Labour the cost of claims increased by 57 percent in 4 years. We know that there was a hole. Some of it was because of that and some of it was because of the volatility of funds that ACC managed. In fact, the chair of ACC reported to the Transport and Industrial Relations Committee earlier this year and said that ACC’s equity position had worsened, from negative $108 million on 30 June 2014 to negative $600 million by 31 December 2014. Then in January this year, for reasons beyond ACC’s control, the asset base diminished by $4 billion in that month, and then bounced back by $2 billion in February.

What we are identifying is that there is a lot of volatility in managing the asset base and the resource base of ACC, which is what the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill is about. It is to smooth that out, to ensure that it is not just the Government making decisions at the end of the process of ACC’s consultation but it is the Government setting policy frameworks at the beginning of that process in order to manage that volatility. That is what this is about. It is about good management and stabilising. Under Labour, under its watch, ACC’s long-term liabilities increased to $15 billion and that is in part the reason why Nick Smith had to do what he did. It is all a matter of being able to have a system of accident compensation and care and rehabilitation here in New Zealand that the taxpayers, the levy payers, the people of this country, and even visitors who come to this country can rely on and that it is going to be there, sustainable, for the long term. All around the world people do acknowledge our ACC system and say that it is a great provision. This is why we are doing what we are doing.

I want to thank the people who came and the entities that came to submit to the select committee: Business Central, the Wellington Employers’ Chamber of Commerce, Business New Zealand, the Employers and Manufacturers Association, Federated Farmers of New Zealand, the Insurance Council of New Zealand, the Meat Industry Association, the New Zealand Association of Accredited Employers, the New Zealand Council of Trade Unions, the New Zealand Nurses Organisation, the New Zealand Automobile Association, and the Port of Tauranga. We had only 14 submitters, but they represented large workforces. They were obviously very large levy payers. We came back with four recommendations for amendment and change. One of them was around the principles of financial responsibility. There are three principles. The first principle is to provide that levies should be set so as to meet the expected lifetime costs of claims, the second principle requires levies to be set to ensure the long-term solvency of each levied account, and the third principle provides that large changes in levies are to be avoided. This is intended to safeguard or reduce uncertainty for levy payers.

A number of submitters spoke to us about that third principle, and said they were concerned that there could be adverse circumstances that affect ACC’s asset base—whether they be natural disasters or economic crises, like we have seen with the global financial crisis—and that we needed to balance that. That is where section 300 of the Act comes into play, whereby the Minister must balance all of those aspects in terms of what is going to enable this fund to be sustainable long term, for the benefit of all New Zealanders. We recommended that the bill should be amended to clarify the nature of the principles of financial responsibility in clause 5, and how they fit together. As the Minister for ACC said in her speech, we also spoke about funding policy consultations. That is a measure that has been added in, particularly in response to my colleague Kevin Hague’s request earlier on, when he attended one of our meetings.

The residual claims liability was one provision that went to the Regulations Review Committee—in fact, it had the whole bill—and it came back with a recommendation that we could have some flexibility in this, and, instead of a decision in terms of when those residual levies stop being an Order in Council, it would be decided by the Minister in an instrument published under the Legislation Act and gazetted. That does give some flexibility to that. We know that the New Zealand Association of Accredited Employers requested that. It said: “ACC has flexibility in the date when they decide to cease the payment of the residual levy. E.g. we must not have a situation of paying extra levies which would be the case if it was found to be funded in June 2016 and a full year’s levy had been paid, through to March 2017.” It is good to see that flexibility in the way in which we can approach those residual levies in the bill. I am happy to commend this bill to the House.

The Accident Compensation (Financial Responsibility and Transparency) Amendment Bill is essentially about how we fund ACC and how we maintain ACC in a good, robust financial state. There has been a lot of rot spoken about the financial state that ACC has been in in recent years. So I think the House, and particularly members on the opposite side of the House, need a bit of a history lesson about how we got to this bill. It starts back in 1999 when the Government at the time decided to shift from a pay-as-you-go model—i.e. ACC raised as much money as it needed in one year to pay the claims in that year—to a fully funded model, where ACC would have enough money in the bank to actually pay the lifetime of all claims that it had on its books. That was a fundamental shift in the way that ACC ran its books. It was always going to be something that was going to take time—to transition from the old model to the new model.

From the day that change was made you could technically have said that ACC was insolvent. If it was an insurance company, it was technically insolvent from 1999 onwards. But the National Government at the time did not have a problem with that, because it knew it was going into transition. The Labour Government of the early 2000s never raised this as an issue, because we were transitioning from the old model to the new model. Then along came Nick Smith as the new ACC Minister after the election in 2008. All of a sudden the fact that ACC was technically insolvent became a problem. It was a crisis and it was caused by the Labour Party—blah, blah, blah. We are used to the National Party blaming Labour for everything. But this had not been a problem for the 10 years previous. Suddenly, according to Nick Smith, this was a problem. And there was another issue at the time. It was a little thing called the global financial crisis, which the Prime Minister is often keen to remind us about during question time, and, yes, that had an impact on ACC’s assets.

So Nick Smith created a crisis out of nothing. Why? Because he wanted to increase the levies. Why did he want to do that? Well, actually, at the time, National’s policy was to privatise aspects of ACC—to privatise some of the accounts, particularly the work account. Unfortunately, no private provider could have competed with ACC with the levies that ACC had at the time. No private provider could compete with ACC. So National found a way to artificially increase the levies so that the private providers actually had an opportunity to compete. Then we had a good report from PricewaterhouseCoopers, I think it was. It actually came and said: “Look, don’t privatise ACC. That is madness. If you look around the world, the ACC is a world leader. There is no better way to do it. Do not privatise it.” Mercifully, I think it was Judith Collins who actually said: “We’re going to back away from this silly idea of privatising ACC.”

But we still had these elevated levies, and all of a sudden that became quite a happy coincidence for the Government because the Government needed revenue from somewhere. It was failing to meet its promise of getting the books back into surplus. It had slashed its own revenue by giving tax cuts to the very wealthy. So it needed to find a new way of generating revenue, and keeping those ACC levies artificially inflated was a very convenient way to keep revenue up in the pursuit of the surplus, which, as yet, still has not been reached by the Government. And that is the long and sordid history of how we get to this bill.

Actually, when we saw the title of this bill, we thought “Aha! The Government has actually responded to the pressure that has been applied by the Labour Party and other Opposition parties and the public”—who were becoming increasingly aware that there was a rort going on, and that we were being ripped off by a National Government that was actually taking far more in ACC levies than it needed to. We thought that this was the answer. We actually thought the Government was prepared to bring itself under control, but, unfortunately, that has not been the case.

Once again—this is becoming a bit of a mantra for this National Government—the legislation has been watered down at the Transport and Industrial Relations Committee, and, in fact, there is nothing now in the legislation that says that the levies set for ACC have to be appropriate for what ACC’s costs are. Instead, what the Government now has to do is to be prudent in managing its entire financial situation. So, quite possibly, we could carry on with the rorts that we have experienced over the last few years. [Interruption] Andrew Bayly, that is exactly what is happening.

We propose an amendment to this legislation that would sort that out, an amendment to the legislation that would actually make it do what the Government said it was going to do—

💬 David Seymour: What’s that?

—and that is to say, David Seymour, that the ACC levies must be set so that the ACC accounts can be prudently managed, because that is missing from this legislation at the moment. We agree that over time we need to set levies in an appropriate fashion, so that some of the volatility that Jonathan Young talked about can be managed. We also need to make sure that we do not have drastic changes in levies—that we do not have levies plummeting and we do not have levies being put back up again—because businesses like to have security and stability. They like to know what they are dealing with. So we agree with that.

But unfortunately that is not what this legislation provides for. This legislation allows the rort to carry on, and that is an absolute shame. The Government, as is so often the case, wants to look like it is doing the right thing, but, in fact, what is actually going on is that very, very little will change as a result of this legislation. We are continuing to support it at this stage because we want the opportunity to go to the Committee stage and make the case for the amendment that we propose—the amendment that Business New Zealand actually came and said needs to be made to this legislation to make it function properly. If the National Government is genuinely interested in ensuring that we take only enough money off ACC levy payers to ensure that ACC is in a good, robust, and stable financial state, then National will support that amendment, and so will every other party in the House if they feel that way as well. If they do not support that amendment, then it is absolutely clear that they intend for the rorts to continue in the future.

ACC should not be there to prop up the Government’s surplus. ACC is a world-leading New Zealand treasure that should be there to take a fair levy and in return provide fair treatment and fair compensation to people. That is all that people ask. People actually enjoy ACC because it does provide a level of security for people that is not available to citizens in a lot of other countries. We do not have to go through some of the rigmarole that you have to in the United States, for instance, around having to go to court just to prove that you ought to be paid out compensation because of medical misadventure or because you have been injured at work. People appreciate the fact that it is a no-fault, no-liability scheme and it is there when we need it. And we appreciate that we have to pay a levy for that—nothing comes for free. We have to pay a fair levy. But we expect to pay a fair levy and get fair treatment and fair compensation in return.

What we have got right now is that people are paying a grossly unfair levy, which is far more than ACC actually needs. Many of the accounts are now 140 percent or more funded. We appreciate that you need, probably, a little bit more than 100 percent funding, but 140 percent funding—and increasing—is a gross misuse of taxpayers’ money.

What we also expect from ACC is that people should get fair treatment. They should not be messed around by ACC, being told that, actually, their injury has been caused by a pre-existing condition, or all the myriad of other ways that are used to deny people treatment and compensation. A fair levy in return for fair treatment and fair compensation—that is what people expect from ACC, but that is not what they are getting from this Government. Only if it amends this legislation as we propose, will this bill actually do what it purports to do.

I rise in support of this bill. The words “Financial Responsibility and Transparency” in the bill’s title are absolutely appropriate. The last speaker, Iain Lees-Galloway, spent most of his time looking backwards, describing his point of view of the history of the Accident Compensation Act. I am a person who likes to look forward. I am not interested in what has been; I am more interested in what is to be.

The last speaker talked about unnecessarily high levies—artificially increasing them and elevating rip-offs was what he talked about. Well, that is why this bill is here: so that there is no debate and there is no argument. This bill is about financial responsibility and transparency, so it will eliminate the question marks about whether levies should be here or there—here, there, or everywhere. So that is what it is about, and, I guess, that is why the members on the other side are supporting this bill, which is a good thing.

I would like to point out the principles. There are principles involved in this bill. There are funding policy statements that must be made by the Minister for ACC. There are reports that must be prepared and published by the corporation. Those policy statements and reports must turn their mind to a number of things. The word “must”—Mr Lees-Galloway is looking for the word “must” in new section 166A, in clause 5, in that ACC should have no flexibility around the setting of the levies. But, as we know, the assets on the balance sheet of the ACC levy accounts move around hugely. The volatility was described by Jonathan Young earlier. Because of that volatility, because interest rates move around, because equity markets move around, and because foreign exchange markets move around, so does the liability and the asset involved, and to varying degrees. So, for that reason alone, the reports must include things like long-term projections.

The bill talks about projections. It talks about notifying key assumptions. Three times in new section 331(5B)(a)(ii), in clause 6, there is the word “assumptions”. That is because there is no crystal ball in this thing. That is why flexibility must be ingrained in this bill, because there is no certainty around the assets that are held by the corporation. That is why, again, the principles in new section 166A, in clause 5, are referred to as “the levies derived for each Account should meet the lifetime cost of claims … if an Account … has accumulated surplus funds, that deficit or surplus should be corrected … [and] large changes in levies should be avoided.”, thus giving the flexibility that is required and necessary in this bill.

That is the thrust of this bill. It is a good bill. It is similar, in my view, to the target band that the Reserve Bank should be targeting. That is the analogy that I would like to bring to the House. If we made it compulsory that the Reserve Bank be within its band and, you know, have consequences via the Reserve Bank if it was not, we would have been through many Reserve Bank Governors by now. Again, it is a target, and then when the inflation target is outside the band there is explanation, there is reporting, and there is transparency.

The Accident Compensation (Financial Responsibility and Transparency) Amendment Bill does the same thing. It gives information to the public so that they themselves can see how the levy is being collected and understand why the levies may be rising and falling, and gives the public the confidence that the ACC levies are being collected and administered fairly. I am very pleased to support this bill.

I rise to continue the Green Party’s support for the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill, and, given this is a second reading debate, I want to begin by thanking the submitters. They were relatively few in number, but their submissions were of pretty high quality. I also want to thank the officials, who served the Transport and Industrial Relations Committee very well, and I want to express my personal appreciation to the other members of the select committee and, especially, Jonathan Young, its chair, for enabling me to participate in at least part of the committee’s process. Unlike, I think, the National and the Labour parties, the Green Party policy around funding for ACC is that the scheme should be funded as it was originally intended, through pay as you go and a moderately sized reserve to be able to deal with fluctuations from year to year. We oppose full funding or future funding or, as I like to call it, full future funding for ACC—a principle that is enshrined in the existing legislation and is also specifically enumerated in this bill as one of the financial responsibility principles.

We oppose full future funding because it mimics the way that private insurance works. A private insurance company needs to use full future funding because the person who pays a premium this year and who makes a claim on an insurance policy may not be a policyholder for that insurance company next year and the liability would none the less still exist. So it needs to be able to capture that with full future funding, but that same principle does not apply to ACC because if one is intent on ensuring that ACC remains a core Government service, then the person who pays a levy to ACC this year and may make a claim will still be a levy-payer next year and the year after and the year after that. So the case for needing full future funding simply is not made out in the case of ACC, unless, that is, the intent of the Government is to privatise or at least to open up the scheme to competition from the private sector. Iain Lees-Galloway has, in fact, spoken in this debate about that dishonourable history around the ACC scheme.

I will give some of the reasons we oppose that full future funding. First of all, actually, because of the uncertainty around valuation of future liabilities that Jonathan Young and the previous Government speaker, Alastair Scott, have spoken about, that uncertainty about the value of future liability leads in fact to the kind of volatility in levies that all speakers in the debate so far have said they are interested in trying to control. This bill, contrary to what several speakers in the debate so far have spoken about, is not intended to actually address that volatility. It is about ensuring transparency, which is a different, but worthy, goal. The other problem with future full funding—funding ACC as if it were a private insurance company—is that then that starts to create some of the behaviour that you might expect to see in a private insurance company. It starts to create what I have called in this House over a number of years now a culture of disentitlement, where people working on the board of ACC, in its management, and at all levels think that their job is to be able to say no to claims rather than to honour the social contract on which this great scheme is actually founded. As I say, I think the Greens are pretty alone in the House as advocates of pay-as-you-go funding. We would, if we had the opportunity, return the scheme to that basis. But, actually, since the scheme is now more or less fully funded, that debate, for the sake of this bill at least, is largely academic. For this bill, as we have indicated and as all of the submitters indicated, the purpose of improving the transparency of the levy-setting process for ACC and making sensible adjustments around residual levies is absolutely a sensible thing to do. I think both the small number of submissions and the content of the submissions indicate that most people accept that these are worthy things to try to achieve.

I want to talk about two particular things in relation to the detail of the bill. One is around the process for levy setting. Several submitters commented that the existing process for levy setting involved a process of consultation that was sometimes tokenistic and actually bore little relationship to the results that actually came about in the levy-setting process—in other words, a disingenuous process. That is because of the conflation of both technical and political goals in the levy-setting process. I, indeed, have expressed some criticism of the Government for its use of both the ACC reserve and its levies as a kind of ballast for the Government’s overall financial position, which I believe to be inappropriate. I accept the point that Labour speakers have made that that is not properly addressed in this bill and the bill would be improved if it were properly addressed. Both unions and Business New Zealand would agree with that being done. If the Government is serious about what it said about the purpose of the bill, it too will agree to making that specific and clear.

I thank the select committee for picking up my proposal that the setting of the funding policy statement should also be the subject of consultation, because that is the political part of the process. So separating out the political part from the technical part is important, but the consultation is, actually, more important, about the political settings that levies are based on rather than the technical side of things, which, actually, is really not amenable to all that much change. So it is great that that change has been made by the select committee. The funding policy statement will then be tabled in Parliament, and I think that is a very useful stage in the process. I want to take that further still and say that once that statement has been tabled in Parliament it should then be subject to parliamentary debate. I am not sure whether it is the place of this bill to make that explicit or whether Parliament needs to express to the Business Committee, and to any future Business Committee, that it is the expectation of Parliament that there should be debate around that policy statement, but it should certainly occur.

I just want to say something briefly around the residual levies process. The changes that are being made in the bill, and actually improved by the select committee, are sensible ones. But there was also an important submission made by New Zealand Council of Trade Unions around occupational disease and the poor basis that exists in legislation and in ACC processes for setting levies appropriately to deal with occupational disease. The advice the select committee received was that that was outside the scope of this bill. I guess I have to accept that. But if that is indeed the case, then it now becomes incumbent on Government and on this House to create a process where it is appropriate to discuss the ongoing basis of funding occupational disease claims appropriately. It is certainly my hope that one of the things that can come about as a result of this bill is perhaps a cross-party negotiation so that we can achieve some consensus around the basis for ACC going forward that enables us to discuss those outstanding issues—the culture of disentitlement, the basis on which occupational disease will be dealt with, and potential expansions of the scheme—as was originally intended. In other words, we should be creating the basis and creating the platform for us to return to honour that original ACC social contract and to return integrity to the scheme. Thank you.

I rise on behalf of New Zealand First to join in the chorus of sound in opposition to this current legislation. Mr Scott, being on the select committee with me, would have read our minority view.

To be clear, I would like to take just a moment to read that out for the people back home who do not have that there. [Interruption] I know—it is very good. Here we go: “New Zealand First does not support this bill. Clearly there are benefits to businesses and individuals with the reduction of ACC levies. However, this Government should acknowledge that the reason that levies are so high in the first place is due to this Government’s unwillingness to rectify a higher than required levy problem which they knew existed, but instead increased those levies higher, and further, to offset the books. Moreover, nowhere in the bill is there a clear reference to levy reductions. New Zealand First supports open and transparent government at all times, and not just when the Government thinks that it is necessary. We support the setting of a funding policy that improves the transparency of the levy-setting process, which would ensure the public is better informed.”

Mr Scott, you talked about Labour looking back all the time, but the only thing that I was looking forward to was the end of your speech. But to be brutally honest, sometimes in order to move forward you have to look back, and what you have to do when you look back at those mistakes that this Government has made is apologise to the people of New Zealand for the muddying of the waters and the deceit that has been created under the current organisation of the running of the ACC.

There is not a New Zealander, there is not a person who enters this country, who does not think that our ACC organisation is absolutely stellar. It is a sterling organisation because, of course, it looks after those people who have accidents in workplaces, on the sports field, and in their homes. It gets them rehabilitated, mended up, and back out there into the real world. But how we are funding it is absolutely a disgrace. Many businesses around the country have been gouged, have been sent absolutely unacceptable charges—and using ACC as the way to fund it—it is just unacceptable. When I have got my ACC levies put in front of me, there is no breakdown of where this money is going. There is no breakdown letting businesses know what they are actually paying for and where it is actually going to. In actual fact, if you get anybody to do work in your business, you would expect a full breakdown of the mileage that they have travelled, the equipment that they have used, and the hourly rate that they are charging out. ACC does not give you that breakdown, because, of course, where this money has been going to is to try and balance out the books, to try and get this Government into some sort of surplus.

When we look at this, the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill—goodness me, that does sound good. I mean those words in themselves sound good: “financial responsibility” and “transparency”. Yet this Government has to put a bill together to actually be financially responsible and transparent. It is beyond me why we have even got this bill sitting here in front of us. It is an absolute nonsense. This Government should have always been open and transparent with the public, with New Zealanders. This Government should have always been responsible with the money that it has collected, and made sure that it has gone for the purposes of New Zealand.

New Zealand First is very concerned that, given a legislative stop date of 2019 for these residual levies being paid by current rates of collection, the Government will have over-collected $852 million from the work account, $155 million from the earners account, and $468 million from the motor vehicle account. What a disgrace. By 2019 that is $1.475 billion that New Zealanders are going to be forking out under this current legislation. It is $350 million a year that has been overcharged to New Zealanders, and with no apology, no looking behind themselves and saying: “Look, we might have done a little bit of a disservice to the businesses of New Zealand. We apologise to all those people who have overpaid. We would like to give you some of that money back.” But no, it has gone out into your whimsical direction, trying to somehow wastefully spend money on foreign Saudi Arabian farm deals, flag referendums, and everything else that they can waste New Zealanders’ money on.

It is not good enough, Mr Bayly and Mr Scott. You should be ashamed of yourselves, and if I was your mother, I would be looking for a disownment. At the end of the day, the Minister for ACC, Nikki Kaye, has come out and said in a statement here that this will actually reduce levies by around about $500 million. That is commendable—if I could just find my piece of paper with her comments on it; here it is—do not panic, I have found it. Here it is. I knew it was here. She said: “Budget 2015 will signal ACC is on track to provide further levy cuts to around $375 million in 2016/17 and a further $120 million in 2017/18”. It is not coming fast enough. You have been over-collecting for such a long time that this should be an immediate saving. Nowhere in this bill—nowhere—does it say that those savings are going to be coming forward immediately.

New Zealand First does have some serious concerns about the use of the term “Order in Council”. There are some serious issues with Order in Council. Just for the House’s information, in current legislation in New Zealand there are 798 references—in current legislation—referring to an Order in Council. For those people back home and those people who do not fully understand what an Order in Council means, it basically means that Cabinet gets to decide what happens and when and how. Look, it happens all the time. Orders in Council are absolutely rife in this current Government. It is interesting to note that the United Nations Convention Against Corruption came out and said that a place that corruption thrives is—hear this—in lack of transparency of decision making; for example, large numbers of decisions being made by Order in Council.

So the United Nations is concerned about it, and yet you just fob it off. You throw it into your legislation by Order in Council so that the rank and file New Zealanders are not part of the decision-making process, and that is a shame on this Government. You are talking about being open and transparent, you are talking about being fiscally responsible, but you are not doing it by putting in an Order in Council. I will settle myself.

We are also concerned in relation to the proposed levy-setting framework, which was put out in the explanatory notes or just came through with one of the briefing notes. It goes through a series of steps of how the ACC levies are going to be set. I would just like to step the people through this, if I could. So it starts off with: “Government sets a funding policy target – horizon and transitions.” It goes on to say: “ACC calculates the levies based on Government funding policy.” It moves to the next step: “Public and stakeholders consultation.” It is where the public can get involved and have its say about what is going on. To date it is ticking all my boxes; it is giving me the two thumbs up. It moves on to: “ACC board recommends levy rates.” The next box says: “Minister for ACC also receives levy advice from the Ministry of Business, Innovation and Employment and the Treasury, incorporating concentration of public interest.” The final step we go into is: “Cabinet sets new ACC levies considering recommendations from ACC, the Ministry of Business, Innovation and Employment, and Treasury.” But when we get to the very last part, it says “Cabinet may”—let me quote that—“may follow ACC’s recommendations.”, but more than likely, probably, it will not. Moving down it says: “Cabinet may choose to set alternative rates, having regard to broader public interests.”

This Order in Council, when we have got the Cabinet making final decisions on things, is exactly what has got us into this situation where we are discussing this bill in the first place. It is unnecessary. We have to go back and look at the past of this country to know where we are heading in the future. An apology and some repayments back to those people who have been overcharged those levies would go a long way in our book to resolve this.

To finish off, I just want to bring your attention to the situation that we find ourselves in under the “ACC transparency”—and whatever the nonsense that they talk about is. With regard to what is happening around high-risk cars, we know that it is a real issue. We have heard it time and time again, and I can give you an example of a very, very dear friend of mine who has two cars. He has a very high-powered 4.2 litre super-charged V8 and he has got a nice around-the-town car for a little bit of the shopping, which is a 1.3 litre Hyundai Getz. And yet, the around-the-town car is being charged the exorbitant rate of $138 for its registration fees for ACC, whereas the big 4.2 super-charged V8 is at $68. I dare say that this big piece of legislation here in itself—and with no recourse for changing that—is actually a taxation on those people who are buying affordable small cars and it is a tax on the poor, which this Government constantly does. Thank you.

What a great delight it is to speak at this time in the afternoon, when my adorable drive-time audience in Auckland will be getting into their cars—

💬 Hon Simon Bridges: Adorable? Oh.

Adoring, actually—not adorable; they are adorable as well—and I thought I may try to take these speaking opportunities to do a bit of a traffic forecast.

I am going to be quite brief on this, because I think that the specifics of the bill have been covered, but I want to bring it down to what I think is a really good thing to do in a little sort of analogy that your general public can understand. When an accident occurs it has both a time frame and so on for the injury to have a cost to it and a magnitude—sort of an “x” axis and a “y” axis.

The accident can be quite small. You could hurt a finger, go to the doctor, and 2 weeks later it is all gone, the cost was 20 or 30 bucks, and it lasted a week. Or the accident could be quite horrific, and the costs could go on for year after year after year. In fact, in many cases, some of the big costs may be in 15 or 20 years after the actual accident has occurred. So what the Government has said is that we have got to try to find a way of setting levies so that when an accident does occur, be it small, medium, or big, we have got funding now to cover the costs to fully fund the cost of all that treatment and revenue and so on for those years out in the future.

What if I asked an ordinary family: “How would you cope if you had to put some money into an account—a dedicated account—for your children’s education?”. You could have four or five kids and you have put money in, but suddenly a big hit comes because the daughter is off to play netball in England and you did not budget for it. Well, in the case of the ACC, it cannot just go and raid another account like the health account or whatever—the family would be stuck and could not do it.

So ACC has got to try to almost have the wisdom of Solomon to work out what it predicts will be the level of accidents, what it believes the severity of them will be, what it thinks the long time period for the cost of each individual accident will be, and then add them up with this ginormous sort of estimates spreadsheet and say: “Here’s where we’ll set the levies this year to try to fund the cost of those accidents.” It is not fair to ask a future generation to pay for this, and I agree with that. We should be using today’s levy payers, who are covered by it, to be funding the cost of those accidents that they have.

This bill is to try to get a better regime. It will never be perfect. There will always be a case where you have either slightly overestimated or underestimated, because it is just like the Earthquake Commission having to try to estimate the number of earthquakes that are going to happen—it cannot do it. There may never be another one or there may be a couple of massive ones, but it has got to try to make some sort of estimated guess on that.

This bill, I think, puts the ACC on a really sound footing, gives the public a really good view about the transparency of the settings, and gives some consultation process. I think the Minister for ACC is to be absolutely congratulated, and that is my 3 minutes.

I rise to take a short call for the Greens on the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. The details of the bill have been discussed in depth by previous speakers and particularly by my colleague Kevin Hague, so I will keep my comments fairly general, and quite short, I hope. We support this bill. It is not as far-reaching or, certainly, as reformative as we would like it to be, but the objectives around improving the framework for determining how ACC’s levied accounts are funded and making it clearer and more transparent are, obviously, something that we do support. We support the idea of more stable levies and we also support the idea that the residual levy is not over-collected or under-collected.

Although we acknowledge that it is a technical bill, we do sort of think that it could have gone a bit further. The Greens actually support a pay-as-you-go system of funding accident compensation, and what we are concerned about is that the current system that the Government has set up, and has been tinkering with, essentially takes it towards an insurance company model. ACC is more than that. There are, of course, the social good aspects to it, and when it was set up in 1974, after the Woodhouse report, the social good aspects were certainly a key part of this world record - breaking system that we introduced here.

One of the aspects of the social good part of the ACC is around injury prevention and using the levies to fund that. It is kind of tricky for ACC, I guess, to concentrate on funding accident prevention when at the moment we have a Government that is deliberately introducing legislation that cuts across that and creates more accidents, in lots of ways. I am referring to the relaxing of alcohol control laws, and Mr Seymour may want to comment on that. We know that when alcohol is freely available and when attitudes around alcohol are relaxed there is a huge increase in accidents and assaults, and a huge number of claims are made. Another example of how this Government has introduced legislation that cuts across the injury prevention area is the recent introduction of its health and safety reform legislation, which has the potential to undermine our workplace health and safety by basically undermining a culture of safety by, essentially, weakening what we had previously in our health and safety laws. When you consider that a couple of years ago—last time I looked—we had something like 200,000 work-related injuries, it is really essential that ACC should be funding injury prevention programmes.

So the Greens support risk-based levies to encourage injury prevention where that is appropriate. We believe that ACC should be funded through a mix of levies on employers, employees, motor vehicle users, and the like, but we certainly believe that it must be people-centred and that the financial bottom line is not the most important aspect of this. Certainly, we need to cover the basics, but actually we need a system that puts people at its heart and where their rehabilitation and their care are taken into account as primary purposes. Thank you.

I call David Seymour—5 minutes.

It is a great pleasure to rise on behalf of the ACT Party in support of this bill. I think one way that part of this bill might be characterised is that it is the fiscal responsibility legislation for ACC that is long overdue. There was a time when Governments would enter the Beehive and discover what the books really said, all too late. As Muldoon said to Lange on election night: “Ha! I’ve got a surprise for you in the morning.”

The Fiscal Responsibility Act changed that because it required the books to be open and transparent and it allowed voters, in full knowledge of the facts, to hold the Government to account. For that alone, I commend the Minister—perhaps a young Ruth Richardson—for this fiscal responsibility legislation for ACC.

But there is another aspect to this bill that is a boon to younger generations of New Zealanders. It was very interesting to listen to Kevin Hague’s contribution, which, I have to say, I thought was, in many ways, a very sound contribution right up until he arrived at his conclusions. He argued that a normal insurance company—that is, a private enterprise insurance company—would make sure that it fully funded its future liabilities because it might not have the same set of premium payers next year or the year after as it had this year. Therefore, it has to fund its future liabilities this year. It is true of ACC as well, because there are differences in the size and the activity and behaviour of different generations. There are people who enter and exit the workforce and there are people who enter and exit New Zealand—as New Zealand First knows, sometimes people with funny-sounding names come here—so it is not true to say that we have exactly the same set of levy payers from one year to the next. So it is correct that in any given year the future liabilities generated by the activities of the levy payers that year should be fully future funded, just as a private firm would do.

The most significant part of this bill is what it brings forward in terms of fairness between generations. As the much larger baby-boomer workforce retires, those of us who are a bit younger and who will be paying ACC levies for some time yet will be relieved of our smaller workforce having to pay this particular aspect of the social contract for that much larger workforce that did a lot more dangerous stuff back then.

So this is a very positive move, not only for fiscal transparency but for intergenerational fairness. However, I think we have heard, particularly in the contribution from the Labour members, an eerie warning that the politics will always be with ACC. So long as the people who contest the power to sit on these benches ultimately hold the purse strings of ACC, it is inevitable that in spite of the very able Minister’s bill to try to introduce fairness and transparency to ACC, different Governments of the day pursuing different prerogatives in different fiscal conditions will try to use ACC to either top up the surplus, as Labour accuses the current Government of doing, or to perhaps give people a discount on their ACC levies, as the current Government accuses Labour of having done.

The lesson is that so long as ACC remains an entity and a creature of the State, the politics will always be with it. Inevitably political meddling will mean that people get a little bit less sometimes and a little bit more other times, and the only people who really win are the politicians.

💬 Sue Moroney: Oh, not the privatisation? There it goes. So predictable, David.

The answer Sue Moroney gives, that it would all be better if good people like me were running it, quite frankly does not pass muster.

So I commend this bill to the House. I commend the honourable Minister for ACC, who has done some very good public policy work in introducing what is a fiscal responsibility bill for ACC, and for striking a blow for generational fairness in this very large account. None the less, it would be much better to sell it all and have a private enterprise system. Thank you.

It is a pleasure to be talking on this Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. It is interesting to hear some of the perverse sort of history that people have conjured up about ACC. Look, if you go back just a few years, back to 2008, ACC reported a deficit—a deficit—of $2.6 billion, and it had net assets or funds under management of roughly about $9 billion.

You go forward 7 years and you find that it has actually reported a surplus of $2.1 billion, and, actually, the funds under management have grown to $27 billion. So here we are: we have had major fluctuations over that period of time—that 6 or 7 years. But, as one of my colleagues explained before, even month by month, due to changes in discount rates and all those sorts of things, there can be substantial change in the value of the funds under management.

What this bill is about is that we are going to stop ACC being a whipping boy. What we wanted to do, in the spirit of the Financial Reporting Act, was to put in some framework to ensure for future Governments that they cannot play around with the ACC account and so that we get proper levy setting. My colleague on the Transport and Industrial Relations Committee from New Zealand First who talked before, Clayton Mitchell, talked in the present tense. This bill is designed to be forward looking and to be, actually, an imposition on future Governments.

In essence, it is about putting in place a framework to make sure that levy setting is set at a consistent and a stable level. It essentially has two parts to it. The first part is to have a framework that determines how that levy is set so that it is clearer, it is more transparent, it has a long-term focus, and, also, it supports a flattening of that levy change so we do not see large changes.

The second thing that it is about is ensuring that the residual levy is not over-collected, and we have heard a bit about that today. During the select committee deliberation we had quite a conversation about the level of consultation in that decision-making process, and we were pleased to receive a number of submissions from a number of parties—including the august Regulations Review Committee, which I am lucky enough to be a member of—that led to some changes to the consultation process, which I believe, personally, are much more effective and much more appropriate for future setting.

There is widespread support for this bill. I know one of the members talked about Business New Zealand. I want to just quote you something that I actually picked up from Business New Zealand: “the ACC Financial Responsibility and Transparency Amendment Bill … will ensure levies reflect sound insurance principles, and is a major breakthrough towards ensuring public trust in ACC.” I support this bill.

I understand the next call is a split call. Poto Williams—5 minutes.

ACC was set up as a no-fault, no-blame system. It is a system that is the envy of the world, in that we are able to ensure that, should we have an accident that means that we are incapacitated and we are unable to continue to earn an income or a living, we actually have the ability not only to have treatment but to be rehabilitated back into work.

But ACC also has another function, and that is around education and supporting the prevention of accidents into the future. I think that that is part of the argument that has not been highlighted today, because we have concentrated on the notion that ACC will continue to balloon out of all proportion, collecting funds. Actually, ACC has a really significant role in supporting good and safe practices, particularly at work; good, safe practices in terms of our sport and our leisure; and sometimes good, safe practices in saving us from ourselves. There is a role in ACC to support that.

We have spoken a lot about the oversubscription to some accounts through the levies, and we cannot deny that that has happened—140 percent of some accounts oversubscribed. That means that employers have been charged—and employers have spoken to me about this, about the cost of ACC, in my own electorate when I have been doing visits to businesses. The cost of ACC to business can sometimes become quite prohibitive, so why is it that we continue with a system that promotes this oversubscription to some of these accounts that actually damages the ability of businesses to perform as well as they can? We do have to look at covering the costs of future liabilities going into the future, but do we have a mechanism that actually adequately monitors these future liabilities, given the face of increased technological advances that mean that we could potentially be safer—say, for example, around the use of airbags in cars? Technology has a big role to play in this, as much as education does, as I have said.

But it does speak to having an overall look at the general health and well-being of our community, and that must include the health and safety practices of our businesses. We have had a shocking few years, I must say. We have had also legislation come to this House that could have improved the health and safety of workers, had the plans gone through as we had expected. But what has happened is that classification and categories of risk have gotten in the way of identifying where we can make adequate and good advances in health and safety practices for our workplaces. That goes hand in hand with what happens around ACC and what happens with the levies that we are going to charge into the future. I am concerned about the risk classification and the categorisation that has spilt over into this legislation, as my colleague Ms Moroney spoke of before, where in respect of classifications of vehicles, for example, the data that was collected in Australia has been forced into a New Zealand context and actually has made a mockery of safety classifications. We have seen that happen in our health and safety legislation and we are seeing it again in this piece of legislation around ACC.

I just want to say that we should all be striving to reduce the level of accidents and increase the safety in all of our activities, and thereby we can in the future hopefully reduce levies to employers and as a cost for business to the country. Thank you.

Thank you for the call on the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. Labour supports this bill, but with some reservations.

As this House has heard from other members, this bill is designed to reform how levies are set, as well as to ensure that the residual levy is not over-collected. It is about time that there is more transparency about setting ACC levies. It is also time for more fairness for businesses, as well as fairness for our workers, with regard to ACC levies. They have borne the burden of overly high levy payments over a number of years. Businesses and ordinary workers have paid this for too long, and this Government has rejected the proposal that this funding should go back to businesses and ordinary workers. I commend especially the concerted pressure that my colleagues have brought to bear on this issue, particularly my colleague Sue Moroney, who is Labour’s spokesperson on ACC. Sue Moroney has been tireless in exposing the facts and realities around the Government’s attitudes to the levies and in her strong defence of businesses and workers who have been overcharged for too long.

This is a Government of broken promises on moving into surplus not yet realised, broken promises on wage and unemployment targets not yet reached, and broken promises on no new taxes and no more asset sales. There are no plans for addressing the long-term challenges facing New Zealand at this time. The attention of this Government has been on trying to make the books look good by hook or by crook: by putting band-aids over cracks, by stripping New Zealand’s assets, and by hoping that the proceeds from their bargain bin sales will make the books look good, as well as by taking a $118 million dividend from Housing New Zealand that should be better invested in improving our State houses so that they are more fit for our most vulnerable and our children to live in. Now the Government is looking at ACC levies and at making sure that the cause of the books looking good is actually addressed.

This bill does absolutely nothing to address the overcharging of businesses and workers in respect of ACC levies to the tune of $300 million a year. The bill simply codifies the criteria that ACC has already got in place, requiring it to take into account the recommendations on the level of levies. In practical terms the Government should not be waiting. It should acknowledge that businesses and workers have been overcharged and bring some relief to both businesses and workers by cutting ACC levies immediately. The National Government has ignored the authoritative recommendations about ACC levies for several years. Treasury, ACC, and the Ministry of Business, Innovation and Employment have all been advising this Government to cut ACC levies, but it has never cut them to the extent that the advice has told it to. It has preferred instead to keep a firm grip on the overcharged cash.

It must be made as clear as day that National cannot keep collecting ACC levies to prop up its failed attempts to get the accounts into surplus. When a Business New Zealand economist came to give his oral submission to the Transport and Industrial Relations Committee he stressed that the Government’s fiscal position should not be a consideration when setting ACC levies. Labour has a Supplementary Order Paper to address this issue. Last year the Government held levies much higher than recommended by the ACC board, and it has overtly used the levies to improve its Budget numbers. The Minister for ACC admitted in answers to written questions that she has not sought Crown Law advice on the legality of collecting ACC levies for the purpose of getting into surplus. Why, then, would the Minister claim she has the legal right to do this but not test her proposition with Crown Law? It is probably because she knows that it is not, in fact, lawful. Labour supports this bill, but with reservations. Thank you.

I rise to take a very short call in support of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill.

Listening to some of the arguments opposite I find it bamboozling, actually, when it comes to our no-fault, 24/7 scheme for cover of injuries, which is the fabric of New Zealand, that anything that moves to make it more transparent and to make levy-setting more accountable and in line with the standards of our Public Finance Act—that people would have a problem with that. It is a good thing. This is a good bill. We are updating the framework so that we ensure that solvency ratios and levy ratios do not fluctuate more than necessary. This is a good thing.

But I also pick up on what the Green Party mentioned before. The Minister will be consulting with stakeholders as to the setting of those levies, finding out what they think, and explaining the situation we find ourselves in with those funds. That is about accountability. This is a good thing. This is a good bill that is moving our ACC framework forward. It is all about transparency and accountability. Again, this is a good thing, so I commend this bill to the House.