Accident Compensation (Interest on Instalment Plans) Amendment Bill

I move, That the Accident Compensation (Interest on Instalment Plans) Amendment Bill be now read a third time.

As I have mentioned, the amendment bill will make it clear that ACC has the legal authority to charge debit interest on payments of work account levies by instalments. Instalment plans are an important resource for businesses and self-employed levy payers that may otherwise be unable to pay their ACC levies on time without other more expensive forms of finance. Charging debt interest ensures that both ACC and the levy payers who pay their levies in lump sums are not disadvantaged by having the option for paying by instalments available. The amendment bill clarifies that charging this debit interest is lawful, ensuring that ACC can continue to charge debit interest in future. It also resolves an uncertainty over ACC’s past and current practice of charging debit interest and draws a line under it.

The amendment bill also provides a way for dividend interest on instalment plans to be updated in future. Any updates to the rates will only be made after public consultation on options and there will be no changes for levy payers when the amendment bill initially comes into force. The bill is preserving a reasonable and fair practice so it can continue. I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. It is a pleasure—we’ve finally made it to the third reading. I thank the Minister for ACC for his forbearance—that we have made it to the third reading of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. Labour supports this bill, but throughout the process that we’ve undertaken in discussing this bill at various readings and through the committee stage, we have made some observations and comments around some concerns we do have around how this will roll-out in future, and I will touch on those shortly.

Can I begin though by acknowledging the taonga that ACC is. ACC has been in place for 50 years now. We are very proud, as the Labour Party, to be the party that introduced the world-leading ACC scheme into New Zealand, and we are very, very lucky to have it. It does require our ongoing protection; I note that this week we are likely to see the results of consultation over job losses at ACC, which, on this side of the House, does give us some deep concern. On this side of the House, we want to see ACC continue to be strengthened, to continue to be made fairer and more equitable so that more people are able to access ACC and receive the compensation, support, and rehabilitation that they deserve.

I will now come to the bill. What the bill does, as the Minister has explained, is it introduces a regulation-making power that allows ACC to charge debit interest on levies that are paid under instalment plans. Now, this particular practice has been in operation for a couple of decades. What has led us to this legislation was that between ACC and the Ministry of Business, Innovation and Employment, there were different points of view around the legality of that practice. We’ve gone into that in quite a bit of detail, looking at the Accident Compensation Act to specifically note that the way the law is currently drafted might not quite be tight enough and might expose the Crown to some legal risk. I want to acknowledge previous Ministers for ACC from the Labour Party Carmel Sepuloni and particularly Peeni Henare, who had begun some of this policy work, and it is good to see this now come through the House. Anything that can expose the Crown to some legal risk obviously does need to be addressed, and we accept that.

I would say, though, that as part of that legal risk being addressed, the legislation has had to be made retrospective. This is why in the committee of the whole House stage we didn’t support part of our friend from the Green Party’s suggested amendment, because one of the purposes of this legislation is to reduce that risk to the Crown. Unfortunately—and I do say unfortunately—that’s meant we’ve had to apply retrospective legislation. I think the House should always be very, very careful when they do choose to do that. I note that the advice from officials was that this piece of legislation had to come through urgency to, again, avoid legal risk. I guess there could have been an opportunity for a truncated select committee process and that would have given an opportunity to have had some more debate around some of these elements. I think that when members of the public look at what the Parliament is doing and making changes to law that apply for such a broad piece of time, I think they’re right to query that, to put on record that there’s a concern. So we in the Labour Party have certainly made our concerns known around that.

The other thing that has caused us some concerns and has led to a lot of the follow-on in the committee stage is about the use of secondary legislation. We are seeing under every Government—this isn’t a criticism of the Government; this is just an observation—more of a move towards secondary legislation. In the Parliament, obviously, we make good use of the Regulations Review Committee, but I think, actually, we all need to be mindful of the use of secondary legislation and the limitations that then places on the ability of the Parliament to actually make decisions that we have been elected to do on behalf of people. And that’s, again, not a criticism, just an observation, and I think something that, actually, most of us in the House are mindful of. So on that note, I do have some concerns around the regulation-making power that might then lead to a higher interest penalty paid by those people who need to access this particular tool.

I will just cover off again quickly why the tool is so useful. When people pay their ACC levies into the worker account, you get a bill and you need to pay it all in one go. We have a very large number of small to medium sized enterprises and sole traders in New Zealand. There’s a number of people running small businesses, a number of people operating on a day-to-day basis as a sole trader. Paying all of your levies in an upfront, lump sum - type payment can have a negative impact on cash flow. And we know, for those businesses, cash is king; having strong cash flow is one of the most critical things to those businesses being able to continue operating. So it is a very pragmatic approach for ACC to say, “Yes, you can pay your levies in an instalment.” And that’s a good thing to be able to do. It’s also not unreasonable for ACC to say, “There is a cost to us for doing that, because we have the opportunity cost of not receiving that income right at the beginning and there’s an administrative cost as well.” So I would hope most people in the House would say, “That’s fair; that’s a reasonable approach to take.”

The question becomes: what is the percentage set at? That is ultimately the question about what is fair. One of the observations I make is that as we see interest rates go up and down, that’s actually a very important consideration, because what you want to do with this particular tool that ACC uses is you want to ensure that the interest rate paid is less than what you would overwise access through another source of finance, such as through a bank. You also want to consider the opportunity cost, again, of potentially having to take the time, make an appointment with your bank manager, go and have the conversation, make a loan application, or whatever it might be—all of those things that take time for a small business owner. So all of those things need to be considered. ACC, to be fair, also has to consider the impact on everybody else who contributes into that worker account and pays the full amount on time—the taxpayer, everybody else who contributes into the ACC scheme. It’s absolutely fair and reasonable to consider that.

Looking back, ACC has applied a pragmatic approach in terms of the penalty rates that have been put in place. But my concern—and I’ve raised it in the final stage of the committee stage—is that there’s now going to be the flexibility for the Minister to increase what is currently being paid, and that happens through a regulation rather than coming through to the House. I note his comments that there’ll be consultation; I think that consultation is absolutely critical. I did ask questions about how that consultation would occur, and I didn’t get enough detail. Again, these are the kinds of things that would actually be explored in great detail if the bill had had the time to come to select committee, if select committee members had had the opportunity to actually ask these questions specifically of officials, if we’d had the opportunity to have a departmental report explaining how these things would work. All of these things are part of how the Parliament operates that are useful and we haven’t been able to do here. So we have explored a lot through the committee stage because of that decision by the Government not to send this to select committee.

I do want to put on record that what I want to see, and what Labour wants to see, is very robust and strong consultation with those who are affected, with those who undertake the use of these instalment plans. We also want to ensure that the rates that are set are fair—that they actually do incentivise people to use the ACC payment plan, rather than using a different source of finance to access the cash that is needed to pay the lump sum right when it is due. I don’t think those concerns that we’ve raised are unreasonable. I want to make sure it’s there on the Hansard that that’s Labour’s position. We understand that we do need to implement this legislation; one of the reasons we are supporting it is because we do have to limit any liability to the Crown, and Labour is very supportive of that. So thank you, Mr Speaker. On that note, Labour supports this bill and I commend the bill to the House.

Thank you, Mr Speaker. We are now at the third reading of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. Thank you so much to everyone who contributed immensely during the committee stage so that we were able to clarify some elements of this bill.

I think, to start with, this bill looks at two components. The first component is giving the legal authority to ACC to be able to charge interest on instalments. That, in itself, is something that the Green Party is supportive of, and particularly in terms of when we are looking at the goal of ACC. However, the second part, around retrospective validation, which I’ll talk more about later, is an area that we have deep concerns on. Before that, I also want to mention that we are also incredibly grateful to the Minister for ACC, who has been able to be engaging and answer our questions during the committee stage, as well, as we’re going through this bill. Because of these two elements, I want to first raise the fact that one of my amendments to change the title to include both elements of this bill, which would then make it the “Accident Compensation (Interest on Instalment Plans and Retrospective Validation) Amendment Bill”, was not supported, which I think is a shame because it would clarify both elements of this bill enormously.

In terms of the first part, when we are talking about the process in which ACC is able to establish the interest plan—and part of this also comes down to clause 6, inserting new Part 5 in Schedule 1AA—one of the things that was also drawing our attention was to do with the existing instalment plan options. We talked about the fact that for three- and six-months’ stages, it is currently at zero percent interest, but for the 10-month stage, it is at 2.73 percent, which is the current practice by ACC. But, in terms of the process for setting new instalment plans, it’s something that we questioned the Minister on and tried to get additional clarification on. This is something that I kind of would like to highlight because one of the things we would draw attention to is, number one, the fact that ACC may or may not need the option to have to charge the interest. This is a flexibility that is given to ACC as indicated in clause 4 of the bill, and I think that flexibility is incredibly important to give to the corporation.

However, in clause 5, inserting new sections 329(1)(hb), 329(2)(2A), and 329(2)(2B), which talks about the process whereby consultation is needed, a four-week consultation is in fact needed by the corporation before a recommendation is made to the Minister. But in clause 5, it’s from the Minister’s perspective how the Minister takes up that recommendation and how the Minister implements that recommendation from the corporation, which generated a lot of discussion during the committee stage. Part of that is to do with the fact that it is not clear. I’m hoping that the Minister did clarify that the Minister must not—as opposed to just have to—put forward any changes to the making of the regulation or any changes to the instalment plan and instalment rate unless receiving that recommendation from ACC. I think this is incredibly crucial from the context that what we don’t want to see is a situation where, if the Minister is not taking on the ACC’s recommendation after they have conducted all this consultation with businesses etc., there is the possibility of the Minister operating ultra vires. This is something that was teased out through the committee stage. I was, again, really appreciative of the Minister being able to clarify and also kind of enlighten the House around some of these issues.

Moving on to the second part of this bill around retrospective validation, and this is the part that we do disagree with and which is, ultimately, the reason why the Greens will not be supporting this bill is because of this fact. So as the previous speaker, Rachel Boyack, mentioned, what we didn’t manage to see for this particular bill is that select committee stage where we’re able to hear from the public. Again, I appreciate the fact that this particular bill may need to be put through under urgency due to the fact that it will potentially open up to certain challenges. But, again, one of the things we drew attention to in the regulatory impact statement is the fact that this particular regulatory impact statement was something that was already available in April last year and it has taken until now, under urgency, to put this through. So, again, I would echo the previous speaker’s sentiment that even a truncated—you know, nothing has kind of happened up until now, so even if a truncated select committee process was put in place, it may have given us the reassurance needed to actually possibly support this bill if we were given the opportunity to hear from the public.

So, on that, again, the retrospective validation is something that both ACC and the Ministry of Innovation, Business and Employment agreed to, but as we heard from the Minister, it was not something that they had the opportunity to consult businesses on. In fact, there was very little data. There was data around how much of the levy would have been affected as part of this collection of the interest, but then there wasn’t enough information given on how many of them currently have to pay interest on that. It is presumed that about one third of the businesses are currently using that 10-month option. So this is one of the things that we found kind of concerning—the lack of data that was able to be put around something like this.

In terms of this, the other angle that we looked at is the fact that when we are looking at retrospectivity, this is something that must be weighed carefully. I think any legislation that does have a retrospective component to it ought to have that select committee process. I understand, for example, the potential mistakes or the legal ambiguity that something like this has created for the Crown and for the executive and for the agency. But as a legislature, our role is to hold that executive accountable, not simply sort of bailing them out when we have found a mistake was made. I think that it is incredibly concerning to us. One of our bottom lines around retrospectivity is to be able to have all of the information that we are able to get, and we weren’t able to see that.

One of the things we have also been unable to get clarification on is the breadth of that retrospectivity. One of the things to do with this was that we tabled an amendment on new section 18(2) of Schedule 1AA, inserted by clause 6, and how it says that all actions of the corporation in fixing the rate “are valid and declared to be and to have always been lawful.” There was some uncertainty, and something that we didn’t manage to get a clarification on is how much does that “all actions” encompass? Does it only encompass what we already know, or does it potentially also encompass elements that we don’t already know? So, again, this is something that we are finding incredibly concerning with that particular part of the bill.

Of course, as has been mentioned across the House, we see ACC as being a great thing and a great agency and something for us to have here in Aotearoa New Zealand, and there’s nothing that would make the Greens happier than seeing ACC one day transforming into something like the agency for comprehensive care. But when something like this happens, when we’re seeing something that they are doing that is already legally dubious and we have to use the tools available to the legislature to bail them out of a particular situation, when we’re seeing some of the cuts that are currently happening at ACC, when we’re seeing the issues around the dispute resolution process, we can’t continue to support ACC on this.

Thank you, Mr Speaker. I’m taking this call to support the third reading of the Accident Compensation (Interest on Instalment Plans) Amendment Bill, and I’m taking this call on behalf of the ACT Party. As the name says, “Interest on Instalment Plans”, so that is what this bill is to fix. This is an issue about the interest on instalment plans that has been charged by ACC and this is something that has been happening for around 20 years. So it’s not something new—Government after Government didn’t notice this—but it has been noticed now, so it is important that we fix it.

What this legislation does is it validates the practice that ACC has been practising for a number of years—that is, charging debit interest on one of the instalment plans. We know that ACC is a system that we all like, and I know that it is the envy of a number of countries around the world. So ACC provides that support that is needed by those who get injured in an accident; this is regardless of fault, and this takes cares of those bills that people might incur because of the GP visits. This also takes care of compensation for people missing out on income from their work. We want to see that the reputation of our ACC scheme is maintained, and we also want to see that we are not exposing the Crown, or ACC, to any kind of legal risk, and that’s why this legislation is really important to be passed.

It’s important to note that what ACC does is it provides that option of paying a levy—of course, people can pay their levy on an annual basis, the whole amount—but then it gives the option of taking up the instalment plan, and then people can pay in three months, six months, or 10 months. What has been happening is that for the 10-month plan, ACC has been—in that payment that they received back from these people—charging debit interest. It is not very clear—it is not in the current legislation that they could do it, and that is what we are trying to fix through this legislation. So, basically, ACC will be allowed to make the decision of charging debit interest once this legislation goes through.

I have heard from members from the other side of the Chamber, especially the Green member Dr Lawrence Xu-Nan, about the retrospective nature of this legislation. I want to emphasise that retrospective nature in any legislation is not common, but in this legislation, it’s really important because this is something that has been happening for a number of years, and it is about protecting the reputation of our ACC scheme and not exposing the Crown to any kind of risk. It’s important that we fix this. It’s not going to benefit an individual; it’s about benefiting the whole scheme to make sure that the reputation of the scheme is intact. So the ACT Party is supporting this bill and we commend this bill to the House. Thank you.

Thank you, Mr Speaker, and a pleasure it is to stand on behalf of New Zealand First in support of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. In New Zealand First, we support this bill because it ensures that ACC’s past practices of charging interest are legally validated, preventing any legal ambiguities in potential disputes—so removing that potential risk to the Crown and ACC. New Zealand First also believes that the bill will promote transparency and fairness in how interest rates are determined and applied.

Therefore, we believe that this bill actually aligns, also, with our principles as a party of fairness and transparency, providing necessary legal clarity and protecting the interests of both ACC and the levy payers as well, thereby ensuring that our compensation system, which is world renowned—and many of us have used it or our families have used the system. We’ve been reliant on it to support us through injury and into a healing pathway back to full health. So whatever we can do to ensure that our system remains robust, with that fairness and transparency as well, is going to ensure that we have a fair system for all New Zealanders. I commend this bill to the House.

Thank you, Mr Speaker. I rise to oppose the Accident Compensation (Interest on Instalment Plans) Amendment Bill. I just want to acknowledge, first of all, that this bill isn’t the worst thing in the world. I think out of all the bills that the Government has proposed, this is probably one of the most benign ones and it’s something that the Greens would have come on board to support if it weren’t for the two aspects that we found quite problematic, which previous Green speakers have already spoken at length about. This bill is relatively benign in comparison to some of the other bills that the Government has done. For example, they’ve defunded the climate emergency, they’ve cut public servants, and they’ve taken away first-home grants. But this bill is actually, from a public service perspective, fairly good.

I acknowledge the past Green speakers Kahurangi Carter, Scott Willis, and Lawrence Xu-Nan, who’ve shared their personal anecdotes about ACC—Kahurangi and her family, Scott and his finger, and Lawrence, who’s done a great job speaking on this bill and holding the Government to account. Unfortunately, I’m a gamer, so I haven’t had a chance to have many accidents, but I have worked at ACC before, so that’s kind of the experience that I bring to this as a portfolio adviser.

So just two unique features of ACC—and this bill intends to safeguard aspects of it—one of them is that ACC has a no-fault system and the other is that ACC is self-funding. Now, this bill is intended to retroactively validate the collection of fines and the interest rates that were charged on them, which makes perfect sense, right? There’s actually a real commercial benefit to businesses being able to defer payments. So that’s a very sensible aspect of the bill and one that the Greens would probably have supported if it weren’t for the kind of processes and the urgency that surrounded this, and also the retrospective validation clause, which is not inherently problematic—but when you add to the cause of the urgency.

We do want to see the definition of ACC coverage progressively expand. We’ve heard, during the debates, friendly jostling between the Opposition benches, between comrades in Labour and the Greens, about who was responsible for expanding it to cover birthing injuries—I think it’s both of us—but we do want to see it go further and faster. We do want to see it transformed into the agency of comprehensive care.

In terms of the actual urgency process, it did skip the select committee process, which we do find problematic. We did ask questions throughout the whole process and there’s still a number of unanswered questions, which I’ll go through when I describe how the urgency process went. That was a very interesting process. I’m not sure whether it’s still actually 30 May or whether we’ve skipped and it’s now 26 June again.

In the clause 1 debate, my colleague Lawrence asked whether businesses would have confidence around retrospectivity. Minister for ACC, Matt Doocey, did address it but, in my view, he didn’t provide quite a fulsome answer. My colleague Scott Willis also brought up an excellent point about the Legislation Design and Advisory Committee. We know that there’s been no consultation around it, but we do wonder whether there’s been a chance to consult since then, because it’s been nearly a month since the bill went through the initial stages.

Around clause 2, my colleague Lawrence Xu-Nan asked about why the legislation was here when the ministry had known since last year—I believe 1 April was the date—and why it was being done under urgency when none of it is necessarily time relevant. I think the Minister did give quite a fulsome answer and comprehensively answer the questions.

Around clause 3, unfortunately, no Green MP managed to get calls on it. But, you know, I think it does speak to the point that I raised earlier that there are questions that haven’t been asked, and questions that haven’t been answered because they haven’t been asked around it. Because I was here for basically all of the committee of the whole House and I think Green MPs were very active in standing up to try and take calls, but not all of us were able to get calls unfortunately.

Around clause 4, my colleague Lawrence asked about new section 234(1A) and (1B). Again, the Minister did give quite fulsome answers on that. Around clause 5, I did manage to ask a question around new section 329(1)(hb)(ii): “the circumstances in which the payment of the whole or any part … may be remitted or waived:”, when I asked for a breakdown of the 30,000 that the regulatory impact statement had addressed. The Minister did address this question and I do thank the Minister for being so fulsome in answering these questions. Thank you.

Just before I take the next call, you will note that I didn’t call the five-minute call for Te Pāti Māori. That five-minute call will now go to the end on the assumption that they may or may not be here by the end of this reading.

Thank you, Mr Speaker. It’s a good opportunity to stand up and summarise, I think, the fact that the Minister for ACC has answered plentifully any concern raised from the opposite side. This is a very important administrative bill, to make sure that it goes through, and I’m very pleased, on that note, to be able to commend it to the House.

Thank you, Mr Speaker, and thank you for the opportunity to say a few words about the Accident Compensation (Interest on Instalment Plans) Amendment Bill. It’s one of those bills that feels like it has been around for a while, because there’s been a stop-start process that has traversed a couple of late nights and various urgency arrangements, but it hasn’t really, and we haven’t had that long to consider the information, to ask questions, and to sort of ventilate and mull over some of the implications. As I said, it has gone through an urgency process, which has meant that this House hasn’t been afforded the opportunity to have a select committee process—the way in which we do things—and to get that departmental report and to have those questions that we may have liked to have lingered on answered in a little bit more of a robust way. But never mind; this is where we are.

I’d like to acknowledge what my colleague Rachel Boyack said earlier on today: we need to remind ourselves that ACC—the Accident Compensation Corporation—is a taonga. It is so incredibly important, and it is quite a unique and groundbreaking and innovative mechanism through which many people in this country have been able to have compensation, have been able to have support, and have been able to manage their rehabilitation when accidents occur. And, of course, it came via the very real desire to avoid a faults-based system, where we could rely upon that compensation when we needed it without having to go through such a litigious process, as we see happening in many other places in the world.

With that in mind, I recall on Monday—which was only two days ago, so one would hope I would—talking to a small-business owner in the Banks Peninsula electorate, in Woolston, specifically about ACC. I had reached out to Rachel Boyack, who, I know, is very passionate about ACC, to see if she had any advice about the specific concerns that this small-business owner was raising. She wasn’t attempting to disparage the system, in so far as a small-business owner who works closely within the system; she wanted to provide some feedback. We acknowledge that ACC is such a mammoth kind of beast, almost, that there’s always going to be amendments and there’s always going to be improvements and changes that we can make to ensure that we do the best by it and make sure that it’s in tip-top shape. So it was lovely to speak to her and to gather that feedback, which I will be duly passing on to my colleague Rachel Boyack, to feed into our bevy of information about what Labour will do differently in Government next time.

The specific aspects of this bill that required tinkering with, and required a change and an amendment, were a little bit more pressing and a little bit more serious, so to speak, because they had, essentially, shown that ACC had been acting in a way, arguably, in the past, that was not necessarily consistent with how it should have been. We note that certainly the Ministry of Business, Innovation and Employment (MBIE) and ACC had slightly differing views about whether ACC had been acting outside its legislative scope, and the advice from MBIE was to amend the Act, and here is where we find ourselves today, in order to provide that legislative clarity about the interest that has been charged when businesses—small businesses in particular—make the most of and take the opportunity to pay off those levies via instalment. So the broad purpose of the bill was, essentially, to introduce that regulation-making power so that they could do that in relation to that debit interest on levies, and they could also have prior behaviour retrospectively validated. The bill would introduce a regulation-making power that sets out the circumstances.

On the surface of it, when we look at it both in terms of the three instalment plans and the zero percent, zero percent, and 2.73 percent interest rates respectively that are applied to those three instalment plans, and also the retrospectivity, it doesn’t seem like it’s particularly contentious, in so far as the fact that we said, from the outset, it was something that we would support. We know that previous Ministers for ACC had identified that there was work required here, and so it shouldn’t be particularly onerous to get this across the line. But I do note that our colleagues in the Green Party took particular exception to the retrospectivity, which, I think, has been an issue that we have had somewhat of an opportunity to talk about through this process, but probably not as much as we should have.

I note my colleague Camilla Belich had raised some very good points about how this concept relates not just to this bill in particular, and whether the detrimental aspects or the erroneous aspects of what had been happening in the past—the consequences—truly do warrant setting a precedent for making and passing a piece of legislation that has that retrospective aspect to it. And, again, that would be something that I know I, for one, would have liked to have heard from some more people about and been able to ventilate a bit more and hear from some experts and kick around a bit, just so that as lawmakers, as is our obligation in this House, we could have all been fully, fully comfortable with the ramifications and the nuances of what this means, not only for this bill but for everything else that we do.

I also note that my colleague Rachel Boyack had put forward an amendment, which I think is worth talking a little bit more about, because the amendment—this one in particular—essentially said that it would have given the opportunity for the Minister for ACC to ensure that the three- and the six-month instalments that were relative to this instalment plan could have been set at zero percent permanently. She mentioned that there has, obviously, been custom and practice involved in that. But given there’s now going to be the mechanism in place for a regulatory process that means that could be changed in the future, I think it would have been a really good step forward in so far as assuring not just some continuity but some confidence, particularly from small-business owners, that that wasn’t something that was immediately going to change post the regulatory process.

She made that point, I think, very well, in so far as we want people to be able to make the most of the tools that we provide them. We don’t want them to have any kind of reason to be able to go outside that tool framework and go look for those advantages perhaps elsewhere when there’s uncertainty. The last thing we want our small businesses to do is to get themselves into situations that are not necessarily advantageous for them, are not necessarily what they should be doing in the best interests of their businesses, simply to avoid some interest on a long-serving process that had before that been at zero percent.

When the Minister was asked about this—and, again, if we had had the opportunity to have a select committee process, we probably could have teased it out a bit further—the Minister, who engaged very well in answering questions, which should be said, on this particular occasion didn’t really provide that much information, but he did mention the perverse incentives that could therefore exist. I don’t feel any more informed now that I’m standing here halfway through the third reading, in so far as what he actually meant by that. I would have liked to have had that as one of the half a dozen things I have circled on my piece of paper—to have been able to cross that off as something that I fully understood and was happy with.

I’d just like to finish off by acknowledging all the people that have taken part in this process. As many great philosophers have said over the years, not probably quite so well as Francisco Hernandez has just mentioned, this isn’t the worst bill in the world. Of all the bills that this Government has introduced, it is the most benign. And, on that very profound observation, I would like to reiterate that Labour does support this bill, and therefore we commend this bill to the House.

Thank you, Madam Speaker. Business appreciates certainty; this bill provides certainty and clarity. I commend it to the House.

This is a split call. Camilla Belich.

Thank you, Madam Speaker. That was an incredibly short contribution from that last speaker, Carl Bates, and I—

Carl Bates: Short, sweet, and effective.

CAMILLA BELICH: Well, was it effective? I don’t know. I’m not sure if people looking over the Hansard in later years will have that same reflection, Mr Bates, but I am happy to elucidate, for the benefit of those future readers, in more detail about the Accident Compensation (Interest on Instalment Plans) Amendment Bill.

This is, as people have said, a relatively uncontroversial bill. The reason for that is there is general consensus that the procedures that ACC have been conducting in relation to interest appear to be reasonable and fair. However, that doesn’t mean that there aren’t important issues raised by the effect of this bill and the way that this bill is brought into law, which will be very soon because this bill comes into force the day after Royal assent. So there isn’t a long period of time before this is actually the law of the land.

Now, because of the change in Government, this is something that was looked at by the previous Labour Government and raised when—originally, it went through this procedure when we were under Budget urgency. It was picked up, I think, through an audit process in relation to questioning the authority for the charging of interest. So it’s regretful that it’s taken 20 years of this practice for that to be raised and put before the House. I think we can all agree that it’s something that should have been looked at earlier on—and I can’t recall exactly who was in Government 20 years ago, but that’s beside the point. Governments from both sides of the House have presided over this practice, and the whole House has an interest in making sure that there is clarity moving forward.

However, there are some concerns that were raised, which were briefly touched upon, I think, by the Minister for ACC in the committee stage. But because this bill does introduce retrospective legislation and does, effectively, cut off a possible legal remedy—and that is very openly discussed, not only in the regulatory impact statement but, in fact, in the explanatory note of the bill—there are concerns around the use of urgency for that process and the fact we didn’t have a select committee process. I want to ask the Government parties to reflect on whether this was an appropriate thing to put through urgency. They may have justified at the time through the urgency motion—and I can’t recall if this point was specifically made—that the reason for introducing this bill was, in fact, to circumvent any legal challenges by putting it through urgency and not having a select committee process, and so people who were charged interest weren’t alerted to the fact that they could perhaps sue ACC for the interest that they were wrongly charged. I’m not aware if that has occurred; I haven’t heard that that’s the case. But, obviously, because the urgency process wasn’t completed, we’re now in a situation where it is some weeks after the original urgency motion was put, and this hasn’t been concluded.

I think it’s for the whole House to reflect on whether, in those particular types of instances where the Government cannot be assured that urgency is particularly necessary for a bill or that it in fact would be passed, urgency should be afforded to this type of bill. If they do consider it is necessary, then why was it not put further up the Order Paper? I mean, I think these are genuine questions for the Government. It won’t affect the overall bipartisan—in terms of National and Labour—support for this bill and the Government parties’ support for this bill, but I think it is a fair thing to reflect on.

We did suggest some things to make the retrospectivity of this bill less severe. That was suggested in the committee of the whole House. It was removing some of those words that would have said that the practice was always lawful, which is a bit of a truism when you have parliamentary supremacy. If Parliament says something was always lawful, because of parliamentary supremacy, it is always lawful. Does that mean that it is a true fact, looking backwards? I question whether there could have been better wording in that part of the bill, and I did ask the Minister about that and he didn’t respond. So I’m disappointed about that.

I agree that ACC is a taonga. There has been bipartisan support for ACC moving forward, and I would hope—and I ask both parties in the House—that when there are issues around the function of such an important thing in ACC, it is important to try and have as bipartisan an approach as possible. So I will commend this bill to the House, but, I think, in the future, there are lessons to be learnt from this process.

Thank you. This bill is pretty straightforward, really. It’s about common sense. It’s about practical amendments that provide clarity. Therefore, I commend it to the House.

Thank you, Madam Speaker. Look, it is a pleasure to take a call on the Accident Compensation (Interest on Instalment Plans) Amendment Bill, and I say that because the Accident Compensation Corporation, which has been in place of course for over 50 years now and was put in place by a previous Labour Government, is one that is unique to us, it’s world leading, it was revolutionary at the time and I think remains so. It, of course, provides accident insurance cover for accidental injuries to virtually everyone—New Zealand citizens, residents, and even temporary visitors—and I think that’s what makes it incredibly special.

I do want to acknowledge the fact that work on this technical bill began under previous Ministers as well, both the Hon Peeni Henare and the Hon Carmel Sepuloni, who were also intending to rebalance the Act and, well, did rebalance the Act to an extent by extending cover to parents giving birth and by also reviewing the Accredited Employers Programme. There was a new framework that came into play sometime back—from memory—that would be used to review Schedule 2 of the Accident Compensation Act 2001 to look at what other occupational injuries or diseases could be covered in the future as well. Those sorts of pieces of work were truly revolutionary in terms of extending ACC and what it could achieve. This bill that we’re here to debate in the House today is really just a technical fix, not quite that revolutionary, but important none the less.

Just a little bit of context as to why we’re here today: the cost of the cover of injuries that I mentioned previously—which is, of course, the primary benefit of ACC—is funded from five accounts. Now, three of those accounts—work, earners, and motor vehicle accounts—are funded solely through levies that are charged to employers, to earners, and to motorists. Most businesses, I understand, or at least a large number of them, do make their levy payment in one single payment on the annual deadline that is stipulated by legislation. But I also understand that there are many businesses, largely small businesses—and bearing in mind that about 97 percent of businesses in New Zealand are small to medium sized enterprise, there are some who then use the instalment plan that the ACC Act allows for as well. And therein lies a little bit of the issue and why we’re here today.

This bill, as I mentioned, is pretty technical. It will allow the Accident Compensation Corporation to charge debit interest when an employer or self-employed levy payer pays levies using the instalment plan, and there are a few different instalment plans that are allowed for; from memory there are three-month, six-month, and 10-monthly plans. It will also validate ACC’s past and continuing practice of charging debit interest in some cases where these levies are paid by instalment. And I will go into a little bit of that because it was quite interesting to see in the regulatory impact statement (RIS) that the Ministry of Business, Innovation and Employment (MBIE) and ACC had slightly differing views on the interpretation of the legislation, and so I will go into that a little bit.

What is the problem definition? What are we here to fix? Why are we here with the debate on this bill? It’s basically that there are strong policy reasons; so there is quite a strong rationale for ACC to be able to collect an appropriate charge, particularly on the longer instalment plans as well, just to make sure that there is equity between levy payers. If this wasn’t in place, from the reading of both the RIS and the bill, my understanding is that if the instalment plans weren’t an option, then it would lead to some issues, particularly with smaller businesses perhaps being forced to take on unsecured involuntary debt—whether it’s through alternative finance means, bank cards, overdrafts, and so on and so forth—which would then mean that they incur, typically, a higher rate of interest than they would have been charged if they had paid through the instalment plan with the debit interest component. So it is important that we are able, through the ACC Act, to allow for this as an option—for instalment plans as an option for businesses, particularly smaller businesses. So as a result of this, it’s more likely that businesses that are currently using that 10-month instalment plan are potentially better off financially than if they were not offered this instalment plan option and had to go down the pathway of a bank loan or an overdraft or things like that. So this is necessary.

Now, what’s the problem here? One of the issues, as I alluded to previously, was the fact that MBIE and ACC have had a slightly differing view on the interpretation of this legislation. There are two parts of the problem, as the regulatory impact statement lays out as well. So firstly, ensuring that ACC’s levy collection power is, I guess, fit for purpose, and then addressing the risk that potentially, and this is where the retrospectivity of this bill comes into play—ensuring that what ACC has been doing for approximately 20 years or so no longer incurs a legislative risk to the Government. So now the power for ACC to accept that payment—that levy payment, particularly—is provided for in the ACC Act as I mentioned, and I’ll just read the bit that is related to it. It says, ACC “may charge a reasonable fee to recover its costs of collecting any levy by instalments.”—that’s section 234(2) of the Act. The empowering provision provides that regulations may prescribe, and I quote, “the matters in respect of which fees or charges are payable under this Act, including any administration fee payable in respect of levies paid in instalments:”—that’s section 333 (1)(b)(i).

Apparently, when the two sections that I’ve just mentioned are read together, there is a discrepancy between the two agencies’ views—between MBIE and ACC. MBIE doesn’t consider that the “reasonable fee to recover its cost of collecting” and an “administration fee” provide the basis for ACC to be able to charge the debit interest payment. So therein lies the issue here. And I do take the point that there is a legislative risk. There was a rationale provided in the RIS for this bill to go through this House under urgency. I will, however, also point to the fact, again laid out in the RIS, that putting this bill through or passing this bill through all stages under urgency has meant that there’s a limited amount of time for formal advice to have been provided by the Legislation Design and Advisory Committee (LDAC). So there is an issue there. The time frames, they have said in the RIS, “short timeframes to support this bill being passed under urgency”, has meant that there was no possibility for formal advice to be provided. However, from the reading of it, MBIE has considered the LDAC guidelines as best as they can, and provided that this legislation is necessary, it is important, and this is the most appropriate way, according to them, to be able to achieve the policy objectives of this bill.

I will also make mention of new Part 5, inserted into Schedule 1AA by clause 6, and that is the fact that nothing really changes in terms of rates for business owners, for those using the instalment plans, as a result of this bill passing—which it will, given that both National and Labour are supporting it. So, currently, there is no amount of levy that’s collected on the three-month or the six-month instalment plans. The 2.73 percent is only collected on the 10-month instalment plan. That will not change as a result of this bill. I am really pleased to see that it is sort of baked into legislation that ACC must consult levy payers to ensure that the rates that are finally set through regulations are ones that are fair. That is important because while ACC does need to recover some of the costs or charge the debit interest fee for the reasons that I’ve outlined previously, it does need to be set at a rate that is fair—one that isn’t too high and one that isn’t too low. And the risks of both are laid out quite well in the regulatory impact statement as well.

So, while consultation could not be conducted because of the fact that this bill is passing through the House under urgency, through all stages, it is a good thing that consultation will need to occur before the rates are set to ensure that the rates that are finally set are fair. Thank you, Madam Speaker.

Well, we are a Government that believes in delivering and fixing problems, unlike the previous Government, who procrastinated. I commend this bill to the House.

I call Tangi Utikere—this is a contested split call from earlier call No. 6, and Tangi was the first person to stand up and call.

So observant, Madam Speaker—can I thank you and send a kia orana your way. It’s a pleasure to rise and speak in support of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. Listening to colleagues all around the House as this bill has progressed through the Parliament and the suggestion that the way in which ACC conducts its business and its functionality needs to enjoy a “by all” or multipartisan level of support—it’s on that basis that we will be supporting it, but there are some caveats that I do want to just very briefly cover off this morning.

I think my colleague the Hon Priyanca Radhakrishnan has just summarised a few key points there that relate to the key differences between, essentially, the two main Government entities or organisations, ACC and the Ministry of Business, Innovation and Employment, and the point of difference that they’ve had in terms of interpreting what the current practice is—not just the current practice but the practice that seems to have been adopted over a period of more than 20 years. As my colleague has indicated, there is a legislative risk from that. It’s always really important, I think, for the House to spend some time seeking to address legislative risk where possible, but on this occasion it really needs to, I think, be weighed up whether, yes, there are time sensitivities in needing to progress this, but whether the use of the House’s time in urgency is a good one for that. Members and people listening and watching—albeit in the morning—will no doubt draw their own conclusions from that.

I do want to acknowledge the work that my colleague the Hon Peeni Henare has done on a lot of the groundwork in bringing this legislative change to where it is at the moment. The real question, I think, is around—and these words have been used in the House already—what is “fair and reasonable” when we’re talking about an instalment plan that’s been put in place for businesses, for small businesses, for entities, and where they engage in a contractual arrangement around interest rates that would be due on that. What this bill seeks to do is set anything less than six months at an interest rate of zero and then, as Dr Xu-Nan has said, that the 2.73 percent over the 10-month instalment period is what is, effectively, the current rate.

The fact that we are progressing this legislation through urgency means that it has not been subject to a select committee process, and I’m sure we would have heard from those submitters around what it would mean for them. We would have heard from small business entities. We would have heard, perhaps, from those who have had their own experiences. The deficiency in the process, of course, at the moment, is that we haven’t had that opportunity. So to my mind, what’s really important is when the Minister for ACC is exercising what will be their right under regulation to set what those interest rates for instalment plans will be, that they really do consider and actively go about consulting. I do encourage Ministers in the future to reflect on the fact that this is a piece of legislation that has moved through urgency, and I think that means that it provides a higher threshold for Ministers to ensure that when they are exercising their regulatory powers and functions, they consider the views of the community and others in reaching determinations before they do that.

I also think that there is a real need for a degree of incentivisation. My colleague Rachel Boyack touched on this. I absolutely think that is needed because the reality is this: when we look out as to what some of the options are for businesses and others who are finding some financial hardship, it’s very easy to see a lot of the communications that are out and about, and people get locked into particular arrangements where the interest rates are actually quite exorbitant and quite high. So if this is going to be an opportunity that’s offered by ACC that’s at a fair and reasonable rate that is, effectively, set by regulation after adequate and appropriate consultation has been met, I do think there is a real need and a responsibility on ACC to ensure that the communication with small businesses and entities is such so that they know that this is an absolute opportunity for them and that the rates that are set and are on offer as a result of instalment plans are fair and reasonable.

So, just in summary, I think when we approach matters that concern the Accident Compensation Corporation, it is important to ensure a wide range of support by the House, but that has to be supplemented and supported by good process. We haven’t had the opportunity to engage with the community, but I do hope that the Ministers in the future, in exercising these regulatory powers, consider to consult and do so actively. I commend this bill to the House.