Accident Compensation (Interest on Instalment Plans) Amendment Bill

Good morning, committee. We are resumed. When we finished last night, we were on the Accident Compensation (Interest on Instalment Plans) Amendment Bill.

I move, That debate on this question now close.

Thank you, Mr Chair. I think this is the third time that we are back talking about the ACC bill as part of the committee stage. So just to recap from last night, if I may, very briefly, so when we are looking at clause 6—now, clause 6 is the crux of the bill and one of the reasons that the Greens are not supporting this bill is because of the retrospective nature, particularly as seen in clause 18 in new Part 5 inserted into Schedule 1AA.

I know that previously the Minister for ACC has very kindly gone through some of the background and talked about the fact that this whole process in terms of the retrospectivity—and the reason that this is coming through as part of the legislation has been agreed upon by ACC and the Ministry for Business, Innovation and Employment but not necessarily had obviously the time to consult with businesses. I wanted to check with the Minister whether from a legality perspective the retrospectivity has been tested against the presumption against retrospectivity, as one of the legal presumptions. The reason I mention this is, again, like in terms of any form of presumption we’re looking at from a legal perspective, there need to be some sorts of checks and balances and some sort of accountability and some sort of scope in which case it’s not going to create a butterfly effect, so to speak, when we are introducing a particular bill into the House or that potentially has a follow-on effect in terms of both case law but also in terms of some of the other legal elements.

So I guess my question to the Minister is: from a legality perspective, has this been tested in the context of the presumption against retrospectivity, and has there been any work done in terms of checking through case law on the broader implications this will have on other potential bills in the future that will be introduced that potentially will introduce a retrospective element, or the historical context and precedence that was set as part of this retrospectivity? Yes, we have previously explored the operational and the business—and I also understand even, like, colleagues from across the House talking about the potential burden on ACC if the retrospectivity was not introduced and the kind of legal implication it may have for ACC. But, yes, we talked about the operation bit, but I wanted to ask from a legality perspective whether this is something that the Minister has considered or has been given advice on. So, yeah, that would be my question. Thank you.

Thank you very much, Mr Chair. To respond to my colleague Dr Lawrence Xu-Nan, who’s leading the charge in this epic hourly debate of the ACC bill: as he knows, because it’s been traversed many times before, retrospectivity guidelines go through the Legislation Design and Advisory Committee guidelines, and this bill meets their threshold.

Thank you, Mr Chair. I do just want to come back to contributions made last night and the Minister for ACC’s response to my question about my Amendment Paper in particular. Can I just begin by saying I did appreciate his commentary about my handwriting. When you’re the daughter of a teacher, that’s what happens. I will acknowledge I did learn cursive handwriting, but obviously that hasn’t translated into the final handwriting style that I used. But I do appreciate the very kind words about my handwriting. Thank you for the compliment, Minister.

I want to come back to my Amendment Paper around clause 17 that’s in new Part 5 inserted into Schedule 1AA. The Minister’s response as to why he wouldn’t accept my amendment, which would permanently make the percentage of interest payable on a three-month instalment period zero percent, and on a six-month instalment period zero percent, was because it wouldn’t allow flexibility going into the future. I just have to put on record that that actually concerns me. This has been the practice for some time—that if you have an instalment over a period of three months or six months, it’s only zero percent. We know that one of the reasons this legislation has come to the House is because it has been the practice for a large number of years, and what the schedule seeks to do is allow the Minister to make regulations in the future that would change that.

That is of concern to us in the Labour Party—that this has been the practice for some time—and I guess what I would like to hear from the Minister actually isn’t that he’s looking for that flexibility, but that he is actually committed to retaining the zero percent interest payable for those three-month and six-month periods. The 2.73 percent is the amount that’s currently included for a 10-month instalment, and so we accept that that is the current rate. But, throughout this debate, we have asked the Minister and just put on record those elements of concern we should always have around the use of secondary legislation. And that is, essentially, what this part does. So I and the Labour Party would like to see some more certainty, even if he actually goes as far as to say into the Hansard today that it would not be his intent to change that zero percent. I think that would provide some assurance to small businesses, who are the ones who often use this, alongside sole traders.

What it does open up is the potential for that zero percent rate to be changed, and one of the benefits of us being able to use these tools is that people can access the ability to pay for their levies over a period of time at a cheaper rate than having to use other tools. What I wouldn’t want to see is people who are doing a short three-month or six-month instalment period having to then make the choice to go and use a different type of financing tool—so, potentially, going to a bank or another financing tool that might have interest applied to it—because, for such a small period of time, three months or six months actually, there’s an administrative burden and an administrative cost to doing that, in terms of having to take the time to go and make an appointment at a bank; all of those kinds of things. So there’s some unintended consequences if we are to lift that three-month instalment interest rate above zero percent, and in the six-month as well.

I appreciate that the Minister responded, but I just was concerned about the Minister’s response that it opened us up to that flexibility. I really would like to hear from the Minister that there’s no intent to change that zero percent rate, because I think, for people listening, small businesses listening in who access this tool, having that certainty is going to be very important for them. But, as I’ve said, I do accept the 10-month instalment period—the  2.73 percent is the current rate—so I’ve no objection to that being written into the Act in that nature. I would just appreciate that clarity from the Minister. Thank you.

Thank you, Mr Chair. I understand the proposition of Rachel Boyack’s questioning, but I would just point out the advice I’ve received is that, in fact, up to 2021, under the last Government, the instalments for three and six months were 5 percent.

Thank you, Mr Chair. It’s a pleasure to contribute to this committee stage. I didn’t have the opportunity last night, but I was questioning the Minister for ACC during the Budget week about the legal advice that he had received and I don’t understand—or I haven’t had it reported to me, and I have been following this debate—the reasons that he’s unable to share even a little bit of that advice with us. Obviously, being the client of the legal advice, it’s within his ambit to do that. But I wanted to just contribute to this debate in a couple of ways: firstly, by supporting my colleague Rachel Boyack’s Amendment Paper for the Schedule, which we are debating, and, secondly, to look at the amendments tabled by my colleague Dr Lawrence Xu-Nan. First, a question—procedurally, as I understand it, the two changes that he has suggested to the schedule in new Part 5 of Schedule 1AA have now been tabled separately. That’s a kind of question to ask for the procedure of the committee, whether that has in fact occurred and whether they will be voted on separately, because I understood that was Dr Xu-Nan’s intention in relation to those two particular changes. So if we could have that confirmed, that would be really helpful.

The second question I have is in relation to the deletion that he has suggested to page 3, lines 28 and 29. In new clause 18(2) of Schedule 1AA, he has suggested, and it’s something that we support, deleting “and declared to be and … have always been lawful”. Now, I have been following the debate, and I know the Minister has said he won’t be—as I understand—supporting that particular amendment. But what I wanted to follow up with the Minister is: would he support a change to that amendment to only delete “and to have always been” in new clause 18(2) of Schedule 1AA? So the sentence would then read: “and declared to be lawful”. I think that addresses some of the retrospectivity issues that have rightly been commented on by the committee so far. We know, and we accept, that one of the principles of good lawmaking is that retrospectivity should be avoided. That would make those payments lawful moving forward and would avoid that retrospectivity. So that is what I’m suggesting. If the Minister is mindful to accept that, I would be happy to table that as an additional amendment, edited slightly from what Mr Xu-Nan has put forward.

As I’ve said, we support that but understand that it’s unlikely to succeed if the Minister doesn’t support it. So would he support a smaller reduction to that, and, if not, can he give us, if not the exact legal advice he’s received, the legal advice to show that there is a realistic risk faced by the State—and we can be aware of those risks as parliamentarians—that is so great that it then outweighs the principle of this House not passing retrospective law? Essentially, that’s what the Minister is asking us to do here: accept that the risk to the State of possible litigation moving forward in relation to these interest payments is such a grave risk that it should allow us to pass a law that retrospectively disallows that type of action. I think that is an important point. I’m not saying that his decision in the end might not be the correct one, but I think the committee and I would appreciate some additional elucidation of the reasons for that, and if in fact that is a concern, or maybe it isn’t outweighed, whether he would agree to that slightly amended change that might be more agreeable to the Minister.

Just before I call, yes there will be two—the two questions will be dealt with, so to reassure you on that.

I move, That debate on this question now close.

We come now to the Schedule. The question is that Rachel Boyack’s tabled amendment to the Schedule inserting new clause 17A to Schedule 1AA be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Schedule replacing “all actions” with “any actions” in new clause 18(2) of Schedule 1AA be agreed to.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Schedule deleting “and declared to be and to have always been lawful” from clause 18(2) of Schedule 1AA be agreed to.

Madam Speaker, the committee has considered the Accident Compensation (Interest on Instalment Plans) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

The bill is set down for third reading immediately.

Third Reading