Accident Compensation (Financial Responsibility and Transparency) Amendment Bill

I move, That the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill be now read a third time. This bill will amend the Accident Compensation Act 2001 to deliver greater transparency around the ACC levy-setting process and will, in my view, deliver more stable, fairer levies over time. It will also ensure that residual levies are not over-collected. I want to acknowledge the leadership of the board of ACC and also the chief executive, Scott Pickering, for their work in terms of the performance of the scheme. For the last 7 years the Government has been working hard alongside ACC to improve the scheme’s finances and customer services after inheriting ACC’s accounts with a $4.8 billion deficit. I was very pleased to confirm that earlier this year, for the first time in history, ACC’s three levied accounts are, essentially, fully funded. This is a huge step forward for ACC and New Zealand.

This bill builds on that achievement by providing the Government with the ability to discontinue the collection of residual levies earlier than the current date of 2019. Yesterday I announced my decision to remove residual levies for all three accounts in 2016. It is my intention, in the next couple of days, to issue a Gazette notice that will cement this decision in law. My decision to remove residual levies is supported by the most recent evaluation of residual levies and liabilities. Our ability to take this step is dependent on a range of factors. Firstly, there has been a significant improvement in ACC’s claims management. Secondly, we have seen good regulatory changes, reducing the cost of claims. We have also seen changes in discount rates, and we have seen continued performance of the ACC investment portfolio.

Removing residual levies represents another significant milestone in the history of ACC. The repeal of the residual levy provisions is of great consequence for those businesses that are currently meeting their own workplace injury costs under the Accredited Employers Programme. In return for meeting these costs, these businesses pay significantly reduced levies, but they must still pay their full share of residual levies. The repeal of this levy will be a significant cost saving for these businesses. The removal will also mean that industries with the greatest injury costs pay their true share of these costs. This will complement the new health and safety legislation to help encourage much safer workplaces. This means much fairer levies for businesses in New Zealand. Removing residual levies will, overall, have a redistributive effect that will result in a decrease for businesses in some industries, particularly for those in the Accredited Employers Programme, and some will receive an increase. As we have announced, we are fortunate to be able to confirm that it is very likely that some of those businesses will not get an increase due to excellent management and the fact that we are potentially on track for significant work account reductions.

This bill will enable successive Governments to have an appropriate range of tools available to better set levies and will smooth out the effects of economic shocks over time. The bill takes the opportunity to make a number of improvements to the approach to funding ACC’s levied accounts. A series of complementary changes will improve the framework for levy setting. To begin with, the bill clearly articulates and consolidates the principles that will guide the levy-setting process. I acknowledge that there has been some debate about how those principles work together. These principles will promote levy stability and solvency and will help to ensure the lifetime costs of claims are met for any particular year. The bill also recognises that trade-offs between these principles may be required—for example, following a significant change in the economic environment. We know too well the impact of Canterbury in the cost to the scheme. Furthermore, new governance arrangements will better reflect the Government’s responsibility for levy setting. These arrangements involve transferring responsibility for the development of the funding policy that guides levy setting from ACC to the Government. This is about responsibility. The bill implements a more robust governance structure, where the Government sets the policy that ACC, as the responsible Crown agent, will implement. Ultimately, this will promote a closer match between levies that are consulted on and recommended by ACC and the Government’s decisions.

Following the select committee process, the bill also now includes a provision requiring the Minister for ACC to undertake targeted consultation on the funding policy statement. I think it will be helpful to relevant stakeholders to present and have their views taken into account at this initial stage of the process. The targeted consultation round will complement the regular comprehensive public consultation on levy rates already undertaken by ACC. ACC has indicated that potential levy reductions next year will be based on a funding target band of between 100 percent and 110 percent of liabilities over a 10-year funding horizon. This is intended to strike a very important balance between levy stability and ensuring that the ACC accounts hold sufficient funds across generations. This is consistent with the funding policy supported by Cabinet, which, as I confirmed yesterday, I intend to consult on as a long-term funding policy for the ACC scheme. To ensure there is adequate time for targeted consultation, the bill was amended in the select committee to require the first funding policy statement to be issued within 12 months after the bill comes into force, rather than 3 months.

Finally, the bill enhances the transparency of the levy-setting process by increasing the reporting requirements on ACC. This will ensure that both the Government and levy payers are informed about the downstream consequences of funding decisions. This is very important for transparency. As well as ensuring that levies are set through a robust process, the bill introduces the kind of accountability and transparency requirements that already apply to the operations of the Government’s core Budget under the Public Finance Act. The Government is working hard to uphold the financial performance of the scheme and, ultimately, to deliver better outcomes for New Zealanders. This bill represents an important step towards furthering those objectives. The changes will allow us the benefits of improving the governance and transparency of the funding process and will support greater levy stability for individuals and businesses. This will help to ensure that the ACC scheme is financially sustainable so that future generations can continue to enjoy the benefits of having comprehensive no-fault accident compensation.

I want to conclude by thanking all members of the Transport and Industrial Relations Committee, particularly the chair, Jonathan Young, who has done an excellent job, for his careful consideration with the committee on the bill. The enhancements made at the select committee—thank you to all of the members for their contribution. I also want to thank the members of the public who contributed to the development of this bill by presenting their views to the committee.

The Government has delivered significant improvements to the ACC scheme, with more than $1.5 billion in levy reductions, and more are planned in the future. The scheme is now in a position where it is, essentially, fully funded, and the changes in this bill will help to maintain the financial performance of the ACC scheme and will deliver better outcomes for some of our most vulnerable New Zealanders. The scheme’s assets have grown from $10 billion to $31 billion in the last few years. The public can be very confident that we will ensure that cover is provided for those who are in need. The passing of this bill completes significant reform in the ACC levy-setting process. The passing of this bill means that on top of the financial achievements—taking the scheme to being, essentially, fully funded, and improving the asset management—we will see much more stable, transparent, and fair levies for all New Zealanders. I commend this bill to the House.

If only the last sentence that the Minister for ACC spoke was the true aim of this bill, we would be absolutely applauding it. As it happens, the Labour Party is supporting this bill, but we know that it could have been so much better. What an opportunity lost—what an opportunity lost to actually get the confidence of the New Zealand public and of all of those levy payers who have, clearly, been overcharged ACC levies for several years now under that Government. That is the confidence that needed to be reinstated through the third reading of this bill, and, sadly, the Government has not achieved that.

The Labour Party does support this bill, because for three decades—for 30 years—the Labour Party has fought for a robust, sustainable accident compensation system. Through all those years where the National Party has wanted to privatise it and dumb it down to being a private insurance model, through all of the twists and turns, it has been the Labour Party that has absolutely consistently stood up for the principle of having a sustainable, collective, socially responsible model of ACC.

Why is that? It is because it is the Labour Party that understands how vulnerable people are when they are hurt—when they have an injury or an accident—and how their life changes. Whether that accident happened in the workplace, whether it happened on a sports field, or whether it happened in their own home, it changes people’s lives. It changes people’s lives in a way where they need the support of their community more than ever. They need the support of their community more than ever when that happens, because they need the ability to be able to live their day-to-day lives. They need to be able to pay their bills on a day-to-day basis, even though they cannot work. They need to be able to be rehabilitated and to continue to participate in community life. These are the reasons why the Labour Party has fought for a robust ACC model.

Therefore, we are disappointed about how flimsy this attempt is to make ACC truly financially responsible and transparent, because if the title of the bill had been adhered to and that Government was really interested in fairer levies, as the Minister just said before she resumed her seat, it would have voted for an amendment that I put forward in the Committee stage just yesterday. That amendment was designed to ensure that the National Government could not continue to use ACC levies as a means to try to get its books back into surplus—because that is what it has done, not because I have accused it of that but because Judith Collins, when she was the Minister for ACC, admitted to it.

💬 Todd Barclay: Ha, ha!

Well, she did, Todd Barclay. You should read her press statement. Judith Collins, 2013—

💬 Hon Member: She was refreshingly honest about it.

She was transparent about it, actually. What she said was that she had rejected ACC’s recommendation for lower ACC levies because her Government needed to “get to surplus”.

💬 Todd Barclay: Is that a quote?

That is a quote: “get to surplus.” And because the Government could not do it by fair means, it decided to try to do it by foul means. The foul means were jacking up—every worker and every business in New Zealand—their ACC levies to higher levies than what they needed to be. My amendment would have stopped that practice, and it was very telling that the National Government, without any explanation, without any justification, stood up and voted against it. What does that tell us, Todd Barclay? It tells us it still wants the ability to actually jack up and hike up ACC levies to a higher level than is needed to pay for the outcomes of injuries and accidents—that is what it tells us. There could be no other explanation of why the Government voted against that amendment.

The other important thing about this bill and its passing—and it will pass with the Labour Party’s support—is that it absolutely proves beyond a shadow of a doubt that Nick Smith and the National Government manufactured a crisis in ACC. They manufactured a funding crisis in ACC. When National took the Government benches in 2008-09 it said: “It’s broke! It can’t be fixed.” It cried: “It’s insolvent! It’s bankrupt!”, and yet here we are, just a few years later, and suddenly the Government is able to remove the residual levy 2 years earlier than what was forecast. Why is that?

💬 Hon Members: It’s called good management.

The reason is that there has been good management over the years. By the Government’s assertion, it believes that ACC has been bankrupt since 1999. That is its analysis. In 1999 the plan was that ACC would be fully funded by 2019. The Government asserted that because it was not fully funded in 2009—10 years early—it was somehow bankrupt, it was somehow insolvent. Either those members do not know how to count and they do not know how to do fiscal management and they do not understand it or they were misleading New Zealand. I am going to be kind to the National Party and say it was the latter, not the former. I am going to say it was the latter, that they were misleading the public, not that they cannot count. So I am being kind to the National Party on that basis, but I am often generous towards the National Party in that way.

It is good that the residual levies are coming off earlier than the projections that had been planned way back in 1999, but what that does mean is that successive Governments have managed ACC in a way where that could be achieved. That is not something that has happened in the last few years; that is something that has happened and that has been worked towards since 1999, and anyone who understands the history of ACC will know that that is a correct statement. In removing the residual levy, here is what is going to happen next: some businesses will be winners and some will be losers. The ones that will be the winners are the ones that have improved their health and safety outcomes since 1999.

💬 Todd Barclay: That’s the intention.

And that is a good thing—yes, that is a good thing. The ones that will be the losers are the ones whose records have worsened since that time, and that is, perhaps, also a good thing.

But we have seen the National Government have a go at this twice in recent weeks, and it has made an absolute shambles of it. In both instances I think Nikki Kaye, the current Minister, has had her hand in there. So when is it recently that we have seen the National Government try to determine risk and what that looks like? The first example we saw was when Nikki Kaye decided to change the way that ACC levies were handed out with regard to motor vehicle registration. She decided to change it so that it was now going to be on the safety rating of the car, and how did that go? Well, within the first week of it being implemented 115,000 cars had to be reclassified because she got it wrong—she got it wrong.

That is the story so far, but what I can tell the House is that that is just the tip of the iceberg, because every week a new car is being discovered, a new model that the Government has got wrong. But instead of actually refunding people and owning up to the mistake and saying it got it wrong, the Government is now saying to people: “Go away. You are going to have to use the ACC consultation process to address that.”—even though it has got it wrong. So it has got cars that are exactly the same model—exactly the same model—but that have been badged differently in different countries, Australia and New Zealand, being assessed as being more dangerous or less dangerous than each other.

It is a complete shambles. But it is the same mistake the Government made when it decided that worm farms were more dangerous than cattle farms. It is the same technique that it used with workplace health and safety. That was a shambles. The ACC motor vehicle registration has been a shambles, and I truly hope, for all the workers and employers in this country, that the same shambles is not visited on the removal of the residual levy and what that will mean for establishing the risk ratings of all of those companies.

The Labour Party is pleased to be able to support this bill. We had hoped that it would be an awful lot stronger and that it would have brought about true transparency, but this will do for now.

Before I do call the next member, I think the Minister in charge of the bill, Nikki Kaye, was sort of slightly outside of the scope of the bill for a reasonable part of her speech; the member who followed was worse still. What I am going to rule now is that we are going to come back and we are going to talk about the bill that is before the House, not a history of the royal commission and everything that followed it.

We would expect nothing less from you, Mr Assistant Speaker. I have to say that the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill is the best thing to happen to ACC since we took over ACC from the previous Government.

What this bill does is it gives certainty to New Zealanders that there is a system of support for those who suffer accidents that is sustainable and going to be there for generations to come, and when we became the Government you could not have said that. We have seen some robust debate around this, but what we are pleased to see and say is that the strength of ACC through this legislation and the responsiveness that this legislation enables in terms of levy setting in a transparent and a clear way is going to bring such strength and solidarity. I am very pleased to commend this bill to the House.

The Accident Compensation (Financial Responsibility and Transparency) Amendment Bill has been brought before the House because the Government realised that it needed to demonstrate that it was using—

💬 Hon Maggie Barry: You’re trying to sound reasonable. You shout.

If you are heard of hearing, just be quiet and listen up.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am having no trouble at the moment, so just keep going.

If the members opposite are hard of hearing—I would not pass judgment on your hearing. This bill was brought before the House because this Government has repeatedly demonstrated that it cannot be trusted to be transparent in the way that it sets ACC levies. Members opposite were challenging my colleague Sue Moroney about the question of whether or not the previous Minister for ACC, Judith Collins, was actually transparent and upfront about the way levies were set when she was the Minister. Just in August last year, barely a year ago—is it not a surprise that it was just over a year ago—the ACC Minister Judith Collins admitted that the reason the Government—

💬 Hon Maggie Barry: Is this in scope?

This is out of an editorial in the New Zealand Herald: “ACC minister Judith Collins has admitted the reason the Government has ignored ACC’s recommendation for bigger cuts for the third year running was, ‘because we need to get to surplus. We believe the surplus is something very important for not only the Government but also for every business that has to borrow money’.” So that is where this bill came from. It was the fact that successive Ministers in this National administration have set levies in order to prop up the surplus—or to attempt to reach surplus—

💬 Jonathan Young: That’s not correct and you know it.

Jonathan Young is challenging me on this, and again I refer to his own Minister’s quote: “because we need to get to surplus. We believe the surplus is something very important…”. That was the ACC Minister’s quote about why the levies were set at the level that they were. The members opposite cannot rewrite history. They cannot give an alternative view as to why this legislation was brought before the House. That is the reason why. It is because the editorials started rolling in and the public started to react against this notion that ACC levies should be used for propping up a surplus.

The fact is that this legislation is timely and we do support it. The only thing we lament is that it does not quite go far enough. Last night we debated—

💬 Todd Barclay: One that got away.

Sorry—come again? Do you care to repeat that? No, he does not care to repeat that. Funny that. Last night we debated Sue Moroney’s Supplementary Order Paper, which was around the definition of “public good” and ensuring that when the Minister was setting policy in the public interest, it related to ACC—to raising funds to provide for the treatment and compensation that people receive under ACC—and to prevention as well. This “public good” argument is what has been used previously to justify setting levies at a higher rate than what is necessary for full funding of the Accident Compensation Corporation accounts. Combined with what is already in the legislation, that would have made this a very robust bill.

We felt that the changes that were made at the Transport and Industrial Relations Committee that gave a little bit more latitude as to how the levies are set were necessary but created the need for this backstop that Sue Moroney proposed. If the Government members were genuine about wanting to create more transparency around the way ACC’s levies are set, they would have supported that amendment, but they did not, and that is because they want to leave the door open to being able to set levies that are higher than what is necessary to fully fund ACC.

This bill does a couple of things that are necessary now because we are coming to the end of the period of transition from pay-as-you-go funding to full funding, and no matter how much rhetoric we hear from the other side, the simple fact is that in 1999 a decision was made to shift from pay-as-you-go funding to full funding. It was always envisaged that that would take about 20 years, and we are getting close to that 20-year mark, so, yes, we need to get rid of the residual levies because many of the accounts are now fully funded. And, yes, we got to full funding a little bit earlier than 2019 because of the fact that ACC has been taking far more money than it needed to over the last few years.

So, yes, the accounts are now fully funded and ACC’s investments have rebounded from the global financial crisis. ACC’s investments are actually one of the best performing investment portfolios in New Zealand—if not the best investment portfolio in New Zealand. This only goes to demonstrate that the public sector can actually run a very good investment portfolio. I know that the National Party does not like that idea, but the public sector can run a solid investment portfolio, which is why this bill is perfectly legitimate.

We agree with this bill because it goes some of the way—but not all of the way—towards greater transparency around how ACC levies are set, but it does still leave the door open to the ACC levies being manipulated and misused by a Government that still has not been able to get the books back into surplus. The other thing it does is that it gets rids of the residual levy, and, again, that would have had to happen in 2019 if full funding had been achieved over the term that it was originally envisaged. So there is nothing magic here. There is nothing extraordinary about the way National has run ACC. If anything, one of the other reasons why it has reached full funding a couple of years earlier than was ever envisaged was that it is so much harder to get compensation now under the National Government. It is so much harder to get treatment now under the National Government. It has slashed funding on programmes to prevent injuries, so that has saved a bit of money as well.

They say: “Please explain—please explain how the levies are calculated.” Are they too high? Are they too low? There are rorts, apparently.

This bill cuts through all of that debate. It closes down the debate, it closes down the arguments, and it closes down the accusations. This bill is about financial responsibility and transparency, increasing the transparency so there is no need to have speculation and accusation. This bill has three principles that must be followed and, of course, the reporting that must take place outlines quite clearly to the public the assumptions and the projections, increasing the accountability and understanding of the levy calculation for the benefit of all New Zealanders. So I commend this bill to the House.

Tēnā koe. I rise to take a call for the Greens on this, the third reading of the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. In my speech on the first reading of this bill I said that although this bill does not go anywhere near as close to our good green vision of a fairly funded, transparent, and people-focused ACC, we will be supporting it because, as a previous speaker on this side said, it does goes part of the way.

I would like to acknowledge the Transport and Industrial Relations Committee, which worked very hard on this bill. [Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sorry, I am just asking Mr Williamson to settle down. I think that the emergency mikes are working in an unusual way.

So I would like to acknowledge the Transport and Industrial Relations Committee for its good work on this bill. It was fairly complicated, I found. I would also particularly like to acknowledge my colleague Kevin Hague for his work on the committee, particularly on the way he was able to get agreement for consultation to happen around some of the regulations that will accompany the bill.

As I have said, we did find this an imperfect bill, but before I go into the areas of where we would have done it differently, I would like to speak about the parts that we do support, because we do like to work constructively as much as possible. We support the intended changes to make the levy-setting process more transparent, and we note that organisations like Business New Zealand and the Council of Trade Unions have been calling for more transparent and more effective ways of doing that. I would also like to acknowledge the fact that the Council of Trade Unions did say that it would like better and more effective consultation.

There is something else that the Council of Trade Unions said in its submission that I think we should actually acknowledge and take notice of. I would like to quote it. The council said that the “consultation process was a disrespectful waste of submitters’ time. That was not in general a reflection on the Accident Compensation Corporation (ACC) … The waste came at the end of the process: the Government was able to, and regularly did, override the Corporation’s recommendation. Submitters’ views counted for nothing.”

So although we applaud the changes in making the levy-setting processes more transparent and easier, and we celebrate our successful changes that we managed to get in, we strongly urge the Government to actually take the consultation process seriously because it does not matter how good or robust the consultation process is, if the Government is determined to ignore what is said there. We have seen the Government ignore that sort of consultation process before in other bills, like the Health and Safety Reform Bill.

We also support the provisions that are made to prevent the over-collection of levies. A lot of families out there are struggling, and the key findings section of the 2015 Household Incomes Report talked about how two in five families in New Zealand have at least one member of their household working full-time hours. But even a couple of hundred dollars or so a year might mean the difference between warm clothes, warm blankets, and a heater, and people getting sick over the winter because their wages are still so low, even with paid work.

That is why we advocated for the superior pay-as-you-go system. In my first reading speech I referred to Michael Littlewood, an expert from Auckland University. I quoted him. He said that the pay-as-you-go model has less volatility on investment returns, and less uncertainty than the current actuarial calculations, which falsely rely on the assumptions that this is a private insurance model and not a Government-run system. He also says that a pay-as-you-go system is more transparent and it is easier to understand.

For all those reasons we support a pay-as-you-go system. I just want to quote Mr Littlewood. He says: “A pay-as-you-go approach to levy setting should be simpler, more transparent, and less risky financially. It would also lower the investment risk for New Zealand.” It would also, I guess, make Government rorts less likely. My colleague Iain Lees-Galloway, in one of his speeches during the Committee of the whole House, I think, spoke about the raising of the ACC levies to cover the Government’s propensity for perpetual Budget deficits, due to its giveaways to people who already have enough. We see examples of that with the dividends from Housing New Zealand returning to the Government, rather than being reinvested to fix our leaking—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Even if the member is quoting someone when he was being irrelevant, it does not become relevant that way.

OK. It was a good point.

The ASSISTANT SPEAKER (Hon Trevor Mallard): That is right. Good try, but keep going, please.

The departure from a pay-as-you-go system has shifted ACC from being a fully funded, fair public service to one that is closer to a neo-liberal, private insurance model. We have all heard horror stories about ACC, with the most egregious one being exposed by my colleague Kevin Hague in 2012, where ACC managers’ pay was linked to the number of long-term claimants they could get off the corporation’s books. That is what I mean by neo-liberal. Kevin Hague referred to the culture of creeping disentitlement and the degradation of our public services that happens when a neo-liberal model is applied to our public services. We are seeing it elsewhere—but I will stick to the point.

So what would ACC look like under a Green Government? It would be fair. It would be comprehensive, transparent, and, most of all, people-focused. We would guarantee that all people who have genuine work-related gradual process injuries, diseases, and infections, including occupational overuse injuries and chemical poisoning on the job, could obtain ACC cover. We would ensure access to specialist assessors to ensure that people can receive full entitlement.

We would revoke co-payment requirements. We would also establish an independent ACC ombudsman to improve accountability against abuses. We would support specific risk-based levies to encourage injury prevention, where that is appropriate, and that could have a remarkable impact on those industries that are at high risk. I stress high risk, like forestry and construction—all those ones.

We would support and strengthen ACC’s focus on injury prevention, including integration with broader preventative health programmes and interventions in communities, workplaces, schools, and homes. If we prevent injuries and take the public health approach, rather than waiting to be an ambulance at the bottom of the cliff, we can provide better-quality services and save money in the long run.

This bill is imperfect. It is an imperfect improvement and a lost opportunity, but, having said that, it is a small baby step towards something a bit better, and we will support it.

I rise on behalf of New Zealand First in solid opposition to this piece of legislation. To be brutally honest, I think that this Government has got more cheek than an overweight politician’s backside. Putting lipstick on this pig and calling it somehow fiscally responsible, looking after the best interests of all New Zealanders, I think, is irresponsible.

To be brutally honest, I have been sitting here for the last 35 minutes and have been struggling. My ears have been deceiving me in hearing all of this objection towards this bill from this side of the House, and yet we are hearing a lot of support for it, with regard to the Greens and Labour. I shake my head in disbelief that we are the only party in opposition to this bill, because it does not do what the Government is saying it is going to do. I am just going to step you through that today. Government members do say one thing and they put down something completely different.

We are talking about the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill. I go back to a number of speeches that have already been made in this House over the last couple of weeks, particularly in the last 24 hours, about those two sets of words: “financial responsibility” and “transparency”. They have been heroed in the title of this bill, which, to be fair, I actually think is the best part of the bill, the title, to make it sound like this is some sort of new idea—that the Government should be fiscally responsible and transparent. In actual fact, I expect that from a Government at all times, and what we are seeing, and what we are going to continue to see, is less transparency and more muddying of the waters.

To move forward you must look behind you and find out where you have made mistakes, where you have gone wrong. You need to apologise for those mistakes, moving forward, and you need to make good on some of the issues that have caused so many problems around the country in relation to the accident compensation levies that have been overcharged. Many businesses, many people, have been overpaying these levies for such a long time, and nothing in this bill, nothing at all, suggests or says definitively that this is actually going to take place—that those levies are actually going to come down.

A transparent Government is a Government that does not hide behind the Order in Council provision. The Order in Council provision is probably one of the most insidious clauses that this Government has got the gall to put in—not just in this bill but there are but 798 other times in current legislation that the Order in Council exists. I find that absolutely abhorrent. I think the rank and file New Zealanders find it absolutely abhorrent, and I think we need to take a good hard look at the way this Government is not being transparent by using the Order in Council provision.

The Order in Council provision is a very important part. The Government is saying that those levies, the residual levies, are going to come down by 2019. It may decide by Order in Council to bring them forward. But under an Order in Council it might decide to actually extend those out. Under current charges and levies that are being charged at the moment, you can expect in New Zealand—those people back home in small businesses—between now and 2019, in 4 years, $1.475 billion to be over-collected over the next 4 years.

What about that over-collection? Where is that money going to go to? Where is the transparency to let people know that that money is going to come back to them? This is a Government that is trying to cloud the issue by trying to create a surplus moving forward to the 2017 election and taking the credit for it, using New Zealanders’ hard-earned taxpayers’ dollars to go into ACC, which should not be required.

Last night in the Committee of the whole House we raised a number of points relating to the word changes around Part 1 in the bill. This is about new section 166A(2) in clause 5: “When making recommendations in respect of regulations made under section 329 setting levies, the Minister must have regard to the following principles:”. Those are “that the levies derived for each account”—we have got “if an Account has a deficit of funds to meet the costs described” and “large changes in levies”.

You would expect with such a solid opening statement in new section 166A(2) that they would follow that through and actually consider that word “must” remaining. However, it is not remaining. The Government has changed the levies derived from each account from “must” to “should meet the lifetime cost”. New Section 166A(2)(b) also says: “if an Account has a deficit of funds to meet the costs described … or has accumulated surplus funds, that deficit or surplus should be corrected by the setting of levies”. Those are some serious changes.

We heard Mr Young stand up and justify that. I do not think that justification is anywhere near good enough. So we do have some serious concerns around the wording of this bill and, even further, around the final decisions being made about what those levies are going to look like. We have got a flow diagram that, again, I have discussed, and because this bill has been sort of rammed through just like a whiz, boing, bang, bounce game—it is very, very quick. We have rushed it through the select committee. We have had not a lot of time to consider the evidence that we have heard, and a lot of people have said themselves they have not had the time to actually bring their concerns forward and have a serious consideration of them.

But the Government’s proposed levy-setting framework starts with the Government setting funding policy targets, horizons, and transitions. ACC then calculates the levies. Public and stakeholders’ consultation—well, that sounds fantastic. Now we are talking about some engagement. So there are some positive things in this bill. Then the ACC board recommends the levies and the rates. The Minister for ACC also receives levies advice from the Ministry of Business, Innovation and Employment and from Treasury. Cabinet sets new ACC levies. But then it goes to the final stages of the levy-setting framework and it is all undone by simply “The Cabinet may follow ACC’s recommendations and the Cabinet may choose to get alternative rates.”

The term “Order in Council” is very worrying. The United Nations Convention Against Corruption has come out and said that a Government that uses this particular ideology in its legislation is one that is stepping down the pathway of corruption.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member has, I think, used a big proportion of his speech to talk about the Order in Council provisions of the bill. I have been searching the bill for them, and before the member starts on that again I would like him to point out where they are in the bill.

With regard to the residual levies, I think you will find it is in Part 2 of the bill, in new section 336A (1)(a) and (b) in clause 7—it is right there on page 5.

So just to continue with what I have got to say here, the language is very important. I think it is very important to raise that concern because that provision is in there, and the reality is there are a number of concerns within that Order in Council section, and it is not to be taken lightly. It is very much a serious concern.

We are moving forward in the bill and we hear the nonsense that is coming out now with the Health and Safety Reform Bill—and if you will bear with me for a second, Mr Assistant Speaker; I do not want you to sit me down before I get to my point. When we talked about the Health and Safety Reform Bill, we heard the comments about what constitutes a high-risk industry, if you will. We have had the same sort of cock-up, if you like, with the announcement of what cars are going to be high risk and low risk and which ones are going to be levied against. [Interruption] It does relate to ACC levies. If the Government is talking about trying to reduce those ACC levies, then the reality is that we are seeing a higher rate for cars that are far more common and therefore more affordable and cheap. To us, this is a tax on the people who can afford it the least.

We have got cars out there that are less popular and therefore cause fewer accidents on the roads, and yet you have got a little car like a Hyundai Getz. Even with the latest information that has been put forward, the Government has not come out in support of the Hyundai Getz as being a car that should have lower rates. That is an affordable around-the-town car. It is low on emissions. It is good for the environment, it takes up less car space, and it is affordable. Yet that does not show up there—in the list of new cars that are actually designed to have those lower emissions rates.

To conclude my presentation today in opposition—in true opposition—to this bill, there is a lot that is wrong with it. The Opposition has come out and said that it is not fit for purpose; it is window dressing. So I cannot fathom how Labour and the Greens cannot actually stand up here with New Zealand First and oppose it, because that is the only sensible option. However, we do support Sue Moroney’s Supplementary Order Papers 123 and 124. I think that is the most sensible thing that I have heard discussed today in this House and with regard to this bill. We will not and cannot support this bill moving forward. Thank you for your time, Mr Assistant Speaker. I hope you have a lovely afternoon.

I have to say that that speech by Clayton Mitchell was a breach of the two wonderful old adages—first, that if you do not have anything to say, you best not say anything, and, second, that a good speech is a short one. So I am going to say that I think the Government has done a bloody good job with the Accident Compensation (Financial Responsibility and Transparency) Amendment Bill and I support it fully. Thank you.