Accident Compensation (Interest on Instalment Plans) Amendment Bill

Members, the House is committee on the Accident Compensation (Interest on Instalment Plans) Amendment Bill. When we were last considering this bill, we were debating clause 6. This is the debate on the amendment to Schedule 1AA of the principal Act and the Schedule. The question is that clause 6 stand part.

Thank you, Mr Chair. It’s a real pleasure to continue the committee stage into this bill. The last time we were debating it—I think we’d spent a significant amount of time on that committee stage, and I was reading through the Hansard from the beginning of the debate into clause 6 and just noting some of the comments I had made there, and then what I have done as a result of those comments.

One of the questions I had for the Minister, which I think is a very fair question, is: whether he would consider an amendment to the bill so that the percentage increase on levies collected by instalments over a three-month and six-month period were permanently set at zero percent.

The reason I raise this—and I am very interested in a response from the Minister, because I think this is a fair question—the practice over many years has been that there are three types of instalment payments that can be used in order to add that interest payment to the instalments, which helps compensate ACC somewhat for the reduction in revenue that they get, essentially, by having an instalment plan in place.

What clause 17A in tabled amendment D talks about is, essentially, we’re putting this into statute, but what we’re doing is we’re setting it into regulation. So the Minister will have the ability through regulation to actually set these percentages of interest collected going forward. The reason we’re doing that—just to remind the committee—is because this has actually been a practice in place at ACC for a very long time and there has been concern around the legality of that. That is why we’re here, so I’m just reminding the committee of that.

In my contribution, the last time the House was in committee on this matter, I’d asked the Minister about whether he would put an amendment in to specifically make the three-month instalment period and the six-month instalment period that are outlined there in clause 17(a) and (b), inserted by the Schedule, permanently set at zero percent. Because what the bill does is it sets them at zero percent until regulations are made, and there is a risk that when regulations are made that the Minister and ACC may determine to actually increase that from zero percent, and I think keeping it permanently set at zero percent would be a pragmatic and fair thing to do.

So I have tabled an amendment in the Chamber tonight that would add new clause 17A to the Schedule. What that would do is it would permanently set the interest payment on that instalment of the levy at zero percent for three months and at zero percent for six months, and you would continue to keep—until regulations are set—the 2.73 percent for the 10-month instalment period.

I asked the Minister about this previously. I foreshadowed during that contribution that I would put an amendment in and I’m very keen to hear from the Minister around how he seeks to look at that. I do note that my colleague from the Green Party has put a couple of amendments in tonight and I intend to speak to those as well; I’m sure we will hear from him also. So I’m just noting to the Chair that I think there’s some usefulness in discussing those amendments.

There’s one that I think could work and one that possibly won’t, so I’m quite keen to take a contribution on those as well if we have time before the House rises at 10 o’clock, but I note that my colleague will probably want to speak to both of those amendments as well. So I’m very keen to hear from the Minister on whether he would look at supporting my amendment that I’ve tabled tonight.

Thank you, Mr Chair. In terms of clause 6 of this particular bill, I also want to be given the opportunity to take a couple of calls on this, because I want to explore the different subclauses here.

The first one I want to explore is new clause 17 of Schedule 1AA, which our colleague Rachel Boyack has already mentioned as well. A couple of things on this: first of all, in terms of subclauses (a) and (b), when we are looking at the total amount of levy collected over the three-month and six-month periods—I just got myself a copy of the amendment for that as well. We will be in support of having it indicated—and I’ll also be interested to hear from the Minister. But the Greens will be in support of having the three-month and six-month options being permanently set at 0 percent. This will be something that, I think, will be really helpful, in terms of contributing and having that level of certainty around this particular aspect.

The key thing I want to kind of draw attention to is new clause 17(c) of Schedule 1AA, which is the setting of the 2.73 percent on the total of levy collected over the 10-month instalment period. Now, the reason I want to draw attention to this, the first part, is that this particular amount has been set, which is the current amount of 2.73 percent, according to the regulatory impact statement, clause 8. However, it is stated here that, in 2020, the fee for the 10-month plan reduced from 5.4 percent to 2.7 percent as a result of the COVID-19 pandemic. This is the amount that currently exists. I kind of wanted to get a sense from the Minister, since we’re putting this legislation through anyway, whether the 5.4 percent has ever been considered, since the 2.73 percent was almost an interim measure. This is one of the first questions I have for the Minister.

The second part around new clause 17 of Schedule 1AA that I want to get some clarification from the Minister on is that, as it stands, clause 6 of the bill makes this amendment and has this insertion of new Part 5 into Schedule 1AA of the primary Act. However, the amendments that follow on, in accordance with new section 239(1)(hb)—which is clauses 5(1) and (2) of the bill—say that any additional adjustments will be done as a result of making regulations. I kind of want to know from the Minister whether the making of the regulations will also be inserted as part of the primary legislation, as is indicated in what we have here, in terms of subclause 17. And also, when we are looking at regulations, when we are discussing regulations, I’m also conscious of whether we’re looking at the possibility of secondary legislation, and how that potentially works or interacts with the new Ministry of Regulations—whether there’s any discussions or conversations, or any need for some sort of collaboration or checking work that has to be done there.

So the two questions I have for the Minister on this: the first one is, for clause 6, inserting new clause 17(c) into Schedule 1AA, whether 5.4 percent has been considered instead of 2.73 percent due to the COVID interim measures. And the second question is: whether any future regulations that are made will be incorporated as part of the primary legislation or will they be in secondary legislation or a regulation, and, if so, how would that potentially work with the Ministry of Regulations? Thank you.

Thank you very much, Mr Chair. It’s great to be back, debating this bill. In response to Rachel Boyack’s amendment—the handwritten amendment with probably some of the neatest handwriting, I must say, I have ever seen. But, no, I would not support her amendment, because it would remove the principle of fairness and would potentially create a perverse incentive.

The second amendment—would I support Dr Lawrence Xu-Nan’s amendment? His amendment hasn’t been handwritten, but typed, and if he is a true doctor, that’s probably because he hasn’t got very tidy handwriting, I would have thought! But I would not support his amendment because it would remove retrospectivity, which is the intent of the bill.

Thank you, Mr Chair. This is actually a really great opportunity for me to speak on my amendment and also the rationale for my amendment, and this is to do with clause 18(2) of Schedule 1AA.

There are two parts to this amendment. The first one is around—so it states, “the instalment interest, and all actions of the Corporation”. So the first part of my amendment would replace “all actions” with “any action”. Now, the reason for that is I would be keen to hear from the Minister whether this could have been used to exploit a potential loophole when all actions done by the corporation in fixing the rate could encompass more than what is the intention of this particular legislation. So, to give an example, let’s say that in the process of the corporation fixing the rate of the instalment interest—when they are visiting a business to discuss these potential changes—they ran a red light and then they had a ticket, etc., would that be considered as an action of the corporation in fixing the rate—because it says “all actions”? So anything that can be, I guess, considered, or even encompassed in this, could be considered legal.

I would really like to hear from the Minister whether those kinds of scenarios have been suggested or teased out on what “all actions” could potentially encompass, potentially beyond the scope of what is intended in this legislation. So changing it from “all actions” to “any actions”, I understand, is not the perfect fix, but it also simply limits and narrows it down to a certain degree so that it may not be beyond the scope.

The second part of my amendment is the removal of “and declared to be and to have always been lawful”. Now, the reason I recommend this is in discussing or looking at this both in terms of clause 18(2) as well as clause 18(3), whereas—and if the Minister could enlighten us—subclause (3) already contains the retrospective nature of this bill, which is “to be treated as having been lawfully paid to, received by, and applied by the Corporation as if it were part of the levy.” So when I was looking through this legislation, having subclause (2), to include and declare the instalment interest and actions to have always been lawful, seems to be redundant—unless, again, if the Minister wouldn’t mind clarifying—in terms of when you are reading it in conjunction with subclause (3).

The only thing I could think of in this case is, legally, these two clauses perform different functions, in which case I will also be appreciative if the Minister would identify and highlight the difference of how subclause (2) and subclause (3) could be read separately and have separate meanings. So, without that level of clarification, my amendments propose to remove “and declared to be and to have always been lawful.” In this particular case, the reason I want to remove that is focusing on the word “always”. Again, without any potential analysis or modelling of the potential impact that this will have in future legal claims or legal challenges, as I mentioned in terms of “all actions” as well, what broader implications would there have been to say “always”?

Now, we already know that this particular thing first presented, as we saw in the regulatory impact statement, that the charging of interest starting in 2004 was not identified until a little while later. Although we are talking about the fact that there is this delay in identifying certain issues, I wanted to know whether the Act would also give ACC the interpretative allowance to potentially explore things that happened before 2004, with the fact that it says it’s “always” been lawful. So we potentially could be looking at up to 50 years’ worth of variations or changes or things that can be legally dubious. So that is one of the reasons why I made the second part of the amendment—it’s particularly around the word “always” and not knowing how to read subclause (2) and subclause (3) separately.

Thank you very much, Mr Chair. I think, in my first contribution, I answered the question to the second part of Dr Lawrence Xu-Nan’s questioning. In response to the first part of his amendment, I can assure him that it is specific drafting that is standard practice for the choice of those words—but to reassure him that we are not introducing anything new here but just validating past and current practice.

Thank you, Mr Chair. I just wanted to take the opportunity to make a short contribution in the committee tonight just to respond to the amendment tabled by my colleague from the Green Party. I’m hopeful that he will consider allowing a vote on his amendment where the two parts are voted on separately. The Labour Party won’t be supporting the first change that he wants to make, which would be to replace “all actions” with “any action”. The reason we won’t be doing that—and we have talked about this a lot throughout all readings of this bill, actually—is that we do support the Government’s approach here, which is to validate the previous practices. We do agree with that.

My concern, and the Labour Party’s concern, is that changing the words “all actions” to “any action” would potentially open up a stronger case for a legal challenge, and so we do agree with the Minister and with the Government on that part. However, in the next part, the extra words at the end of that clause do appear to be somewhat redundant and unnecessary, and so we’d be quite happy to support that change to the clause. So I’m hopeful that the member will be comfortable with the committee voting on each of those separately so that we can vote in favour of one and against the other.

On that note, I think I’ve made the Labour Party’s position clear, and I thank my colleague from the Green Party for putting forward these amendments and the arguments in favour of them. Thank you.

The committee is suspended, and it will resume at 9 a.m. tomorrow.

Debate interrupted.

Sitting suspended from 9.59 p.m. to 9 a.m. (Wednesday)