Accident Compensation (Interest on Instalment Plans) Amendment Bill

Members, the House is in committee on the Accident Compensation (Interest on Instalment Plans) Amendment Bill. We come first to the debate on clause 1, which is the debate on the title.

Thank you, Mr Chair. When it comes to the title, we have the title as the Accident Compensation (Interest on Instalment Plans) Amendment Bill 2024. For this one I have a tabled amendment. This particular one is really important when we are talking about the title, because in fact there are two parts to this bill—the first part being the interest on instalment plans and the second part being the retrospective validation. This is going to be really important because this is where the Green Party does not support the bill, because of the retrospective validation element.

I think both parts need to be equally highlighted in the title, so I have tabled an amendment which is amending the bill title to the “Accident Compensation (Interest on Instalment Plans and Retrospective Validation) Amendment Bill 2014”—

Scott Willis: 2024.

Dr LAWRENCE XU-NAN: 2024, not 2014—2024.

Grant McCallum: Yeah—that would be retrospective!

Dr LAWRENCE XU-NAN: That would be retrospective! Thank you. This is the thing: one of the questions that we have for the Minister, when we are looking at this title and when we are looking at the broader context, is whether he has considered—in lieu of the fact that we didn’t have a select committee—the business confidence and what business says in terms of the intent of the retrospective validation of this bill. I think this is really important because of the fact that if we were able for this to go into select committee—if we were able to hear from businesses and the businesses were like, “You know what, we didn’t notice. We are really happy with paying for this and for you to retrospectively change it.”—having that community and business confidence and hearing from those employers and businesses might actually change the position that the Green Party has on this bill.

My question, first of all, to the Minister around the title is whether he has considered including both elements—which are equally important and address two very different aspects of this bill—in the title. In addition to that—because of the fact that we have, like the previous speaker has mentioned, a really, really robust regulatory impact statement which says that businesses have not been considered—the second question is whether the Minister had any conversations with businesses around whether the retrospective element should be included as part of the title and, indeed, being a really legitimate and important element of this bill, because I think that is going to be the crux of this when we are looking at the title.

To the Minister, the first question being whether the Minister would have considered including both equally important elements of this in the title. I genuinely encourage and really hope that the Minister takes my amendment seriously; that makes it a really clear, concise—maybe not concise—and obvious name that I have tabled.

The second question is whether the part around the retrospective validation, which I have tabled as an amendment to the title, has been discussed, or even in conversations that you have had as the Minister for ACC with ACC itself or, potentially, the Ministry of Business, Innovation and Employment around business confidence and the business feedback on the mistake that has been made because of the IT changes. So those are my two initial questions to the Minister, and I thank you for this opportunity, Mr Chair.

Thank you very much, Mr Chair and everyone here tonight for what I think is an important bill for an important New Zealand institution. As some have mentioned—the Opposition ACC spokesperson Rachel Boyack—ACC recently celebrated 50 years, and like any 50th birthday party, that should be acknowledged. It’s a great institution for New Zealand, and I’d just like to acknowledge my predecessor the Hon Peeni Henare, who was the ACC Minister before I took up this role.

To just respond to that member, he talked about certainty, because, of course—as we know in this House—business, whether it be small, medium, or large, needs certainty to make business decisions. We are talking here today about a levy for the work account—so that is employers or the self-employed. What this bill will bring today is certainty for those businesses to make sure that they can make decisions going forward.

Thank you, Mr Chair. Thank you for the opportunity to engage in the committee of the whole House on this important piece of legislation. Can I just foreshadow a couple of things. Obviously we are taking this debate clause by clause and to start with it is the title clause, but I understand that that actually allows broad and wide contributions from members and questions to the Minister around the purpose of the bill.

The other matter I just want to note, of course, is that we aren’t having the opportunity to take this through the select committee. So I know that a number of my colleagues have got some quite detailed questions that they do want to ask of the Minister and through the Minister his officials. So we are looking forward to being able to ask a number of questions and to be able to engage with the Minister around those answers.

I just want to touch on, I guess, that overall purpose of this bill that has come to the House. As has been traversed tonight during the first and second reading, there has been a discovery that perhaps ACC has been operating outside of its legislative scope. We’ve seen in the regulatory impact statement some commentary that has been provided to the House and to the Minister about the two sections in the Act that interact with each other, and that ACC has been operating in good faith to use the words in the Act to charge a debit interest payment. What has happened is that the Ministry of Business, Innovation and Employment (MBIE) has said, “Actually, we think there’s some grey in that area. We think there’s some grey. We don’t quite agree with ACC’s practice which has been occurring for 20 years but in good faith.” Particularly, the Act talks about an administration payment and it talks about a payment to collect the levies. Where MBIE has that concern that they’ve addressed is that that does not offer clarity about the specifics of a debit interest payment.

We have heard tonight that the purpose of charging interest on payments for those who pay by instalment is to ensure that ACC is not out of pocket as a result, because businesses, including sole traders, pay for their levies usually all at once, up front. Under the operations that ACC have been running for the last 20 years, they have allowed people to pay in instalment, but in order to do that have added a debit interest payment.

My first question to the Minister that I’d like him to give us some commentary on—and this is one of a number of matters that we will be raising with the Minister tonight—is actually about that advice that he’s received from ACC. So what advice has he received and if he can elaborate a bit on that advice that he’s received from ACC, specifically around those sections of the Act. I will just pull them out for him; I’m sure he has them available, but I’ll be helpful. We’re talking specifically about section 234(2) of the Accident Compensation Act, which states that ACC “may charge a reasonable fee to recover its costs of collecting any levy by instalments.” So what is a reasonable fee? Does that reasonable fee include a debit interest payment? But then it goes further to state that regulations may prescribe “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:”, which is section 333(1)(b)(i).

In the regulatory impact statement which, I must say, I do want to commend officials for what was a very well-worded in plain language—which, of course, most people in the Chamber know is of importance to me—regulatory impact statement that made the policy problem—

Hon Chris Bishop: We’re going to repeal that too—don’t worry.

RACHEL BOYACK: Oh, sure, because you put it in the member’s box. Yep, that’s going to work! The question that we have is we’ve got—

Hon Chris Bishop: You’ve just reminded me to get on with repealing it. I can’t wait. Thanks for the reminder. I forgot about your stupid bill.

RACHEL BOYACK: Oh look, it’s great. The interjections are really helpful. I might just need to—Mr Chair, I’m going to need to take another call.

CHAIRPERSON (Greg O’Connor): Mr Bishop. When the Chair calls—[Interruption] Stand, withdraw, and apologise.

Hon Chris Bishop: I withdraw and apologise.

CHAIRPERSON (Greg O’Connor): When the Chair calls, you will listen. I appreciate it’s late at night and we’re all a little excited, but we will still keep some order.

RACHEL BOYACK: Mr Chair, I’d just like to be able to finish my contribution, thank you, Mr Chair.

CHAIRPERSON (Greg O’Connor): I’ll give you 10 more seconds.

RACHEL BOYACK: My question was around the advice that the Minister has received about the interaction of those clauses and the advice that he’s received from both ACC and from MBIE. Thank you, Mr Chair.

Oh, look, thank you very much, Mr Chair. As that member Rachel Boyack said, first clause title, and it is going a bit wider but I’m happy to answer them because I know when we get to those specific clauses that’ll help speed them up as well.

I do want to acknowledge what Rachel Boyack said about the work that the officials have done on this bill—getting it in the shape and the advice that they have provided. And even one official who’s not in the Chamber but she actually had tickets to the Hurricanes Highlanders game tonight, and unfortunately wasn’t able to go because this bill is up at the moment. So just thank you to the officials who serve Parliament fantastically.

Look, there’s obviously been the issue raised about uncertainty, but I suppose, as a Minister, I get a range of advice. And what I can assure the committee is, in fact, there is real certainty and agreement between ACC and the Ministry of Business, Innovation and Employment, who both agreed this legislative change in the House tonight to bring certainty to this issue.

Thank you, Mr Chair, and thanks to the Minister for answering that. He didn’t quite answer the question I’d like an answer to. The regulatory impact statement (RIS), as with all the impact statements here over the past day—it has been pretty clear that they’ve been made under pressure and they haven’t necessarily explored all options. I know someone else is going to talk a little bit about legal advice, but my question is: was the option explored of actually going and getting a determination through the courts of whether or not the authority existed?

Of course, David Seymour gets mentioned all the time because of his views about good lawmaking, and the first question is: is it needed? So the best way to test whether or not it’s needed is actually to go to the courts and ask: is this within the law or not? Now, there’s a declaratory judgments procedure that would do that quite well, quite effectively, and very inexpensively. Far fewer minds than are here tonight would have to do that work, and it would actually be a lot cheaper, quicker, and more effective.

The other question I have—and I really would like a clear answer—is this: what’s the number? On page 8 of the RIS, it’s got an approximation of ACC’s instalment plan use in 2021, so let’s guess that it’s not a million miles away from that. The total revenue—and it’s made very clear that that revenue is the levies plus the 2.7-odd percent—is $1.314 million. So the question, then, to backwards account, is: how much of the $1.3 million is the levies that we’re here talking about? My rough calculation comes up with—and it’s not quite right, because I haven’t done it perfectly, but it’s $35,870. If we are here passing a bill on a Saturday night because ACC is not sure whether they can charge $35,870 or not, I think we’ve got some problems about the use of Government resources. So can we be very clear that the annual amount of the interest charged that is in question here: is it roughly $35,000, or—it is possible—have I got my maths wrong on that, Minister Doocey?

In answer to the Hon Dr Duncan Webb’s first question, the advice I received was “No need to drag the ACC through courts for a technical change.”

The second part of his question: the estimated amount of the interest debit from 2003-04 to 2022-23 is an estimated $218.6 million. It’s just unclear because of IT changes, but it’s around that amount.

Thank you, Mr Chair. I’d just like to suggest to the Minister he considers, under the title clause, changing the name to “Accident Compensation (Interest and Compounding Penalty Interest on Instalment Plans) Amendment Bill”. The reason I raise that is because, as I alluded to in my second reading speech, there’s quite a good explanation here about the interest that is going to be charged in the name of fairness, but when it comes to the penalty interest—if I can just read from the regulatory impact statement: “Those who don’t meet the instalment are charged penalty interest at a rate of 1 percent per month”, and it compounds monthly. The justification for that is the Injury Prevention, Rehabilitation, and Compensation (Interest Rate for Late Payment of Levies) Regulations 2002, which sets the rate of interest charged.

It looks to me, on the face of it, that there is a presumption under this architecture that by making this so-called administrative change that then the regulations kick in which can automatically prescribe a penalty amount. If that is the case, I think given that we don’t have select committee it would be really clear to have that recorded because otherwise what we could be doing is overreaching by saying that it’s OK to charge the interest but we haven’t actually unpacked what the sovereign power is that is providing ACC the powers to charge penalty interest at that rate—and I can see it’s under the regulations.

My second question, and I will keep my contributions short in the interest of trying to get through my 30 questions, which I won’t do all at once because it would be incredibly boring hearing my voice over 30 questions, but I would like the opportunity to ask more questions at a later stage. My second question is just how was it that after 20 years of doing this practice that nobody ever thought about, suddenly this has become topical and top of mind? The reason that that is important from a policy perspective is for us to understand that the purpose of this bill is to actually create a fair instalment process rather than to collect revenue. It seems very odd to me that suddenly, out of the blue, when there is a small amount of revenue to be gained—perhaps it was because the Government was looking under every rock and in every hidey-hole to try and find alternative sources of tax that they could, through levies and fees and so on, just to be able to try and met their $12 billion shortfall on the Budget. Or did somebody actually alert the Minister? Was it the legal team? Do they still have a legal team given the cuts to ACC?

I mean, these are real questions, because it’s very weird that after 20 years suddenly this comes up and the justification for it is about a fair instalment process. So I’ll sit down, and I do hope the Minister answers those questions and I have some more soon.

Thank you very much, Mr Chair. In response to Ingrid Leary, her first question on whether I’d considered that change to the title of the bill, the answer is no, and to the second question—why is this bill being brought to the House now?—because I said yes.

Thank you, Mr Chair. It’s been a very interesting exchange throughout the entire process of this bill. The first question I do have—and I’ll go into a little bit of context about some of why we’re here and the decisions that I certainly made when I was the Minister for ACC.

But before I do that, I want to thank the advisers, because when ACC go through a process to look towards levies—and it’s not just this levy; it’s the vast array of levies and interactions that ACC have with employers and our communities across the country—it’s quite a lengthy process. They come back to a Minister with a series of recommendations about levies and the processes by which they might change and considerations for Cabinet to, ultimately, decide upon. I can say—and Mr Bishop and Mr Doocey are right—that in my time, when presented with that, we decided not to.

The regulatory impact statement also makes quite a poignant point on that particular matter because of a number of the changes and decisions that were made that impacted businesses after COVID-19, which brings me to my first question. I want to support—only because I don’t think I heard an answer from the Minister—my Green colleague in his question about whether or not the Minister had considered his tabled amendment here. I didn’t quite hear whether it was a definitive no, but I’d welcome the Minister’s clear response and then whichever way he might go on that, of course, we’ll react accordingly.

Then the second question I have for the Minister is: as I’ve just mentioned the context about how ACC considers its levies, was there any discussion by the Minister and Cabinet and this Government about whether or not consideration towards the levy rate that it’s currently set at could be changed, given the fact that we are in a cost of living crisis? Businesses up and down the country are looking towards how we might cut more costs or how we might be able to save more dollars. I wondered, given this is a chance to change the levy—and it doesn’t come around all too often because of the process it goes through—whether or not the Minister and indeed the Government had considered tinkering or changing the levy that’s described here in the amendment bill. I think that’s really important.

The other point I want to make with respect to the title—and I heard Mr Bishop talk about plain language. Well, plain language is important, because for many business owners out there, they’re not going to sit down and read the entire ACC Act. Therefore, the title is important to make sure that you describe it for exactly what it is, and that’s really important. At a quick glance they can go, “OK, there’s a bit of retrospective activity happening here.”

That’s already been well canvassed in the House that that is a particular issue, because any time you talk about retrospectivity in this House, regardless of whether or not you’re going back on levies or it’s legislation or whatever it might be, there are always serious questions that need to be asked for a clear justification and a clear rationale from the Government on why they’ve gone and done this particular action. So those are the questions I have for the Minister in my first contribution.

Thank you very much, Mr Chair. In response to the Hon Peeni Henare: a bill that we are bringing to the House tonight that will validate past and current practice—will I be responding to the amendment around a name change, or support it? The answer would be no.

The rate of 2.73 percent, which the honourable member talked about, in a cost of living crisis: I think the reason that an employer or self-employed person would take an instalment plan of 10 months was, potentially, if they didn’t have the funds to pay a lump sum. I would probably say if they were to go to their bank to get that money to pay it without the option of an instalment, they would be paying more than 2.73 percent.

Ms Leary, I note that you said you’ve got quite a few questions. I encourage, since we seem to have a participating Minister, that this might be a good opportunity to do that—

Ingrid Leary: That sounds like a great idea, Mr Chair.

CHAIRPERSON (Greg O’Connor): —interactively, in the way of the committee stage that I have been trying to encourage.

I would hope that, in your calculations, the shorter that I speak, the longer the Minister might speak. That would be very helpful to the committee. So I do hope that he takes that on board.

CHAIRPERSON (Greg O’Connor): The Chair will judge.

INGRID LEARY: I will ask two really quick questions. One is just that I didn’t really hear the Minister rule out the question from the Hon Peeni Henare about whether he’s thinking of tinkering with the quantum of the levy. The next levy setting round is in 2024, and the regulatory impact statement (RIS) says that ACC wants to be able to charge appropriate fees. So my question is: if that’s in his thinking, will he rule out changing the quantum of the levy in the 2024 financial year? That’s my first question.

My second question is that I note that previously in ACC there was a fee charge for a three- or six-month instalment plan. The RIS mentions that some years ago, due to staff turnover—

Hon Chris Bishop: What’s this got to do with the title?

INGRID LEARY: Sorry, the member is asking what this has got to do with the title, and I’d just like to help the member out and say that, because this is in urgency, my understanding of the—

CHAIRPERSON (Greg O’Connor): The Chair will look after that. We don’t need to respond to ill-informed comments from the right.

INGRID LEARY: So, given that previously fees were charged, there doesn’t seem to be any record of when that occurred or the justification for what happened. That would have been very helpful, actually, to set the precedent for this current move to create a fee. I’m just curious to know how on earth a Government agency that has charged a levy, which is quite a specific thing, cannot have a sort of whakapapa or details of what happened previously to be able to recall. That’s institutional knowledge, which is quite important and would have helped inform the policy. So maybe the officials can help the Minister with that second question.

Just before I go on, for the consternation of the members on my right, if I refer them to Speaker’s ruling 127/1—Dean. You’ll understand why—on a clause by clause, at the first clause we’re allowing a broader discussion. It will narrow in subsequent clauses.

Thank you, Mr Chair. Thank you to the Minister for engaging in this debate. But I did want to come back to my initial question, because the Minister’s response to my question about the differing legal opinions between ACC and the Ministry of Business, Innovation and Employment (MBIE) was that, actually, they were quite close.

I wanted just to highlight what it actually says in the regulatory impact statement (RIS) on page 2. It says in the third to bottom paragraph on that page that “MBIE’s view is that the relevant sections of the Act do not provide for ACC to charge debit interest as part of an instalment plan fee.” Then it goes on to say, “ACC does not necessarily agree with this view.” So I think, given that this is grey and given that there is potential legal risk to the Crown, it would actually be really helpful, I think, to the committee to get on to the Hansard some more detail around the legal differences of opinion between ACC and MBIE, and some further detail from the Minister.

I don’t need to use my full five-minute contribution, but I do have more questions around the broad nature of the bill. The other matter I wanted just to touch on at this point for a response from the Minister was around how long ACC has started to actually differentiate in its invoices to businesses the amount that is the actual levy and the amount that is the debit interest. We can see here that ACC hasn’t always separated those out. So one of the questions I’ve got is are people who pay these levies in instalments actually aware that they’re also paying a debit interest fee on top of it? Is it actually separated out on the invoice? How long has that been happening for? Because, obviously, there is concern from the Crown, and I understand one of the reasons that stakeholder engagement hasn’t happened before this bill was drafted was because of the risk of legal action.

So I am very interested in hearing from the Minister just how much information is actually passed on to levy payers so that levy payers are actually aware how much is the actual levy, how much is an admin fee, and how much is the debit interest. So I’d be very interested to hear about that level of detail from the Minister.

Thank you, Mr Chair. In answer to that member’s second question first, the employer or self-employed person would get a schedule setting out what is being paid, and then in the invoice, that would set out the interest and the levy.

Then, in answer to the first question, I suppose some guidance on how we’ve got here today for either retrospectivity or validation, the Legislation Design and Advisory Committee guidelines say that validation legislation can be used where a practice that is “generally understood and intended to be lawful, but that are, in fact, [could be] unlawful as a result of a technical error”.

Thank you, Mr Chair, and thank you to the Minister. This is my first opportunity to speak on this bill. Considering the title, the Accident Compensation (Interest on Instalment Plans) Amendment Bill, I would like the Minister to consider either of the amendments, and I know he’s already covered off those, but I would like the Minister—yet again, this is a call to the Minister to rethink the value of considering the two distinct amendments which propose a more succinct or, at least, clarify the intent of this bill.

But my further question is really about the urgency of this bill, because the key element is the validation of changing interest, both future and past. And in the regulatory impact statement, there’s no immediate impact on the status quo. So there’s no increase or decrease to ACC revenue. Now, that seems pretty straightforward, and yet here we are on—I don’t even know which day it is. People are missing sports—

CHAIRPERSON (Barbara Kuriger): Thursday.

SCOTT WILLIS: Thursday. See, it’s Thursday; people are missing sports games; there are birthday parties held in the House.

Hon Barbara Edmonds: The Hurricanes won, though.

SCOTT WILLIS: The Hurricanes won. Well, at least we know that. So there are things happening out of the bubble, but here we are in urgency, dealing with something that has no increase or decrease to ACC revenue. Under urgency—under urgency.

Don’t get me wrong; I am a fan of ACC. Look at this. [Holds up hand] That bit of thumb that’s missing—it was an axe. And this finger—I’m sorry—was crushed with a wood splitter. So ACC has been a real friend to me, but I’m also concerned, because my wife is an artist, and she will be subject to this retrospective validation. I don’t even understand how the hell she gets charged that much for being a painter. My son is a stilt walker and a busker and has to pay an ACC bill. I don’t know how they’ll be affected by this retrospective validation.

Coming back to the title, it really helps, when we’ve got such an inconsequential bill, that we are spending time on Thursday, under urgency, to deliberate on—why on earth are we doing that if we’re not going to give it the title that it deserves? So why can’t we describe it in a way that tells us just what it does? Because we need people to understand how this is going to affect them. And if we’re not going to give them any ability to consult—because what we’ve seen in the RIS, in the regulatory impact statement, is that there’s been no meaningful consultation with the Legislation Design and Advisory Committee (LDAC). It says here that “MBIE has engaged with LDAC, who were unable to provide formal advice due to the limited time constraints and LDAC’s other commitments, but MBIE has analysed the proposals against [their] Guidelines.” So we haven’t even had that opportunity to have any real engagement with it.

So, coming back to my point, and I am aware, Minister, that we are needing to wrap this up at some point—

Hon Matt Doocey: Please! Please!

CHAIRPERSON (Barbara Kuriger): You can do it voluntarily.

SCOTT WILLIS: —but I would like the Minister to come back to a title that is going to give us some substance, some meaning to what this bill actually does. Well, thank you, Minister. Could I have an answer, please, because I’m sure I can think of another really good question.

I’m going to call Ingrid Leary, because I believe Ingrid’s got some questions and we want to get this question-answer process going, because there’s a number of them, and I know that the member stated them quite well within a short period in the last half of her second reading speech. So, hopefully, they’ll be succinct.

Thank you very much, Madam Chair, for acknowledging that. I’ll get straight to the questions for the Minister. Two of them are about the evidence base, and one is just about some drafting, and we can look at it later if it’s not the right time now. So the first one is that there seems to be an assumption that the more levy payers that take up the offer of doing instalments, the longer ACC’s revenue would be delayed, and that would disadvantage other levy payers into the account. I just wondered what modelling the Minister had actually done on that; was that done based on actuals or was it based on just, sort of, theoretical?

The second one is another assumption that people would use this service rather than go to alternative forms of finance, because the 2.73 percent instalment plan fee was lower. What evidence did he have for that? Was, again, that an assumption based on an average credit cost, or were there actually actuals gathered on that to make that cost comparison?

My third and final question for this question is that, under the Act, ACC is not required to offer instalment plans. And I just wondered if the Minister had thought about whether—while we’re tidying up the Act, which is essentially what this is doing—it would be prudent to change “may” to “must”, just from an equity perspective. It is a practice that ACC has been doing, so legislating to make sure that there is legislated equity rather than a kind of broad discretion from the Crown agency, in my view, might just help enshrine some equity and be something that we wouldn’t have to come back to. Certainly, if it had been through a select committee stage, perhaps that’s something somebody might have done an Amendment Paper on just to make it a bit more robust. So I’m keen to hear from the Minister.

Thank you, Madam Chair. Just responding to that last question from Ingrid Leary about whether we would be interested in changing the word from “may” to “must”. Because it’s a tidy-up bill, I would probably refer her to the last Green member’s contribution, which I think made it very clear that, in fact, this bill actually doesn’t intend to change any practice. Actually, all it does is validate past and present practice, which, actually, was a good platform to support the bill, I would have thought. And the question that he also raised around the advice from LDAC, or the Legislation Design and Advisory Committee: the advice I’ve received is that back in around April 2023, when the regulatory impact statement was actually written—and that’s how long this goes back—the LDAC, at the time, felt they didn’t have the time to respond.

Thank you, Madam Chair. I have been very enthusiastically seeking the call on the first clause of this bill, for the reason that I do have some questions around the regulatory impact statement (RIS), and I believe clause 1 is the appropriate time given that we’re able to discuss in this clause the bill’s wider policy context.

My questions for the Minister really are around this question of legal advice. Essentially, as I can see it, this bill has arisen due to legal advice that’s been received. Now that we’re in urgency we are being asked to essentially agree to validate retrospectively, which is against the usual rules that we use to pass laws in this place. The Minister is shaking his head, but I believe that is correct: to, essentially, validate this.

The question I have for the Minister is: on page 7 of the RIS, there is a part which has been redacted due to legal professional privilege. Now, the Minister owns that privilege as the client of this legal advice, and I want to know, given that we’re in urgency and given that we are being asked to support this bill—and the Labour Party has been quite up front with the fact that we do support the intent of this bill and from my perspective, the main reason I think we should support it is because the provision that ACC is giving people saves them money compared to their options with private providers and credit cards and that kind of thing.

Hon Chris Bishop: The Government doesn’t waive privilege. The member knows that.

CAMILLA BELICH: Yes—well, I understand that Ministers are able to contribute to the debate, and the Minister on the other side has raised a question and he said that the Minister can’t waive legal professional privilege. I want to challenge that—

CHAIRPERSON (Barbara Kuriger): Well, the member hasn’t asked her question yet, so we’re not sure what—

CAMILLA BELICH: Will he waive the legal professional privilege so we can see the actual fulsome advice that we asked for, this being passed under urgency, so we can know that we are making the right decision in supporting this bill? That is my question.

The second part to why I think that’s important is that in paragraph 41 in the RIS there is a statement, an assertion, that this is an analogous situation to when something is corrected by law, and it should be able to be done retrospectively when there is a technical error. Now I want to challenge the Minister to show where there is a technical error. I would not myself characterise this as a technical error. I would characterise it as a situation where there should have been legal authority from the beginning and there wasn’t. Is that a technical error? From my view, I would like the Minister to elucidate the committee as to why that is a technical error, because I think this is really important, and it’s important that we take the advice on this RIS seriously. Many members of this committee have thanked the officials. I think they have done a really good job in putting this together, but I would like to see the full advice.

A final question I would have is: we’re in urgency, this issue had first been raised in 2021—I appreciate the Minister wasn’t the Minister at that time; it’s being going on since 2004—so why now, under urgency, are we being asked to do this? Does the legal advice which has been redacted on page 7 hold the answer to why this particular action on this particular day is necessary?

Thank you, Madam Chair. That was an interesting question about the title. But as the member will know, as a Minister, I received a range of advice.

Camilla Belich: I raise a point of order, Madam Speaker.

CHAIRPERSON (Barbara Kuriger): I know what the point of order is going to be, and the previous presiding officer made it clear that as it’s clause by clause, it’s a bit broader. I’m watching the other clauses because there will be less debate on those other clauses because, as was just said before, this is really around validating past practice. The Minister’s already made it clear that he’s not going to change some things in some of the answers that he’s already given. So the point of order is accepted that we’re broader than just the title.

Camilla Belich: Thank you, Madam Chair. I just wonder if the Minister could acknowledge that, because we are trying to keep the rules of this debate; there is a justification for us having a wider debate on it in clause 1 and it would be helpful if our contributions weren’t undermined by lack of reference to that point of order. Thank you, Madam Chair.

Hon MATT DOOCEY: Well, in response to that, Madam Chair, if the member potentially was here to hear my opening comments when I acknowledged how it would be wider than that—

CHAIRPERSON (Barbara Kuriger): You shouldn’t refer to the absence of a member, Mr Doocey.

Hon MATT DOOCEY: In response to that question, I received much advice. I considered that to the extent that there was uncertainty it was important to put it beyond reasonable doubt, and levy payers are entitled to certainty of their obligations. Due to the uncertainty, ACC and the Ministry of Business, Innovation and Employment both agreed legislative change was required.

Thank you, Madam Chair. I was watching the Minister’s comments even though I was also watching the Hurricanes, who are now at the top of the table. I had a bit of déjà vu, actually, watching this game, because they beat the Highlanders when I was actually working at Michael Woodhouse’s office.

CHAIRPERSON (Barbara Kuriger): I know it’s 10.12 at night, but that is an indulgence. Please come back to the bill. Thank you. I come from Chiefs country.

Hon BARBARA EDMONDS: Thank you, Madam Chair, for indulging me for a moment for, again, the Hurricanes being the top of the table. Coming back to this particular bill, I actually want to speak in favour of the amendment put forward by Dr Lawrence Xu-Nan. I know the Minister has said that he wasn’t going to support it, but I want to add another reason why I think he could possibly reconsider it for the Minister. That’s because in the regulatory impact statement, it talks about the LDAC guidelines and why retrospective legislation would be allowed, which is clause 2, I understand, but this is talking to the title amendment by Dr Lawrence Xu-Nan.

The LDAC, for members of the committee, is the Legislation Design and Advisory Committee or council. They are some of the most senior legal officials within our country, and when a bill is put to the House, except for in this particular case because it’s urgency, the bill will get referred, after the first reading, to LDAC. LDAC will then provide advice to the select committee—basically a legal review of the draft legislation to ensure that it meets particular criteria. They also provide opinion and advice to the select committee, which the select committee uses to test with officials.

In this particular case, because we are going through under urgency, this bill was not able to go through the LDAC process, which is why there have been a number of contributions on this side of the Chamber. But why I wanted to put my support behind Dr Lawrence Xu-Nan’s amendment is because his tabled amendment is inserting the words “retrospective validation” after “instalment plans”, so it would read “Accident Compensation (Interest on Instalment Plans and Retrospective Validation) Amendment Bill.

LDAC, in their guidelines, say that sometimes you’re allowed to have retrospective legislation, which the member Camilla Belich has taken us through and which she does question around the technical error side. But putting that particular contribution aside, my question as to why I believe that Dr Xu-Nan’s amendment should be put through is that when you actually look at clause 2, the legislation comes into effect from Royal assent, so therefore this bill looks forward, but yet it is also retrospectively applying for interest that’s been accrued for those businesses on instalment plans. So the Royal assent basically says, “Yes, we validate that interest that has been accrued on instalment plans.” But it’s not retrospective application; it’s retroactive—it’s looking forward.

So that’s why I would actually support Dr Lawrence Xu-Nan’s amendment because it makes a small change to the title so that therefore in the future when people are looking back, they can say, “Well, this applied by Royal assent looking forward.” There’s no LDAC opinion on this because it went through urgency. The application date is from Royal assent. But yet if we could have that small change to the title, it therefore actually provides retrospective validation. I think that’s where Dr Lawrence Xu-Nan was looking when—

Dr Lawrence Xu-Nan: It’s a really serious thing.

Hon BARBARA EDMONDS: It’s quite a serious thing, the good doctor says, as to why we would allow that small change to a title which provides clarity to the public that, yes, this legislation is retrospective in application, even though it has Royal assent, which is in clause 2, which I’m sure other members of the committee will work through carefully. But I think it would be one that I would like to know whether I could convince the Minister, and even if I didn’t convince him, the Hurricanes are still the top of the table, so it’s a great night for Wellington.

Thank you very much, Madam Chair. Just a response to that member, to acknowledge that the Hurricanes are at the top of the table, and it’s just a bit unfortunate the Crusaders aren’t or they would have knocked the Hurricanes off.

My question might appear a little bit technical, and I think it’s an overarching question—it’s about the nature of the transaction that’s going on. I understand the bill permits this contractual arrangement of interest payments to be entered into. I’m aware that, back in 2003, the student loan scheme ran into this problem, and more recently local bodies ran into the problem, of charging interest in an entirely well-meaning manner, because they wanted to assist people.

The local bodies have been charging interest for home heating renovations, often at low or no interest. But the fact of the matter is that if an entity, Crown entity or not, charges interest, we’ve got a credit contract. Then, all of a sudden, you are a provider of credits. Local bodies stopped advancing money to homeowners because they realised they had to comply with the Credit Contracts and Consumer Finance Act, the Financial Markets Conduct Act, and all of the secondary legislation around the provision of credit. If the Minister for ACC would like it, the relevant provision in the Credit Contracts and Consumer Finance Act is section 15(1)(ca), which actually explicitly carves out student loans from that. In terms of local body advances for home improvements that are then repaid by an additional amount of rate—although it’s not actually a rate; they call it a rate but it’s not, it’s a loan repayment—the exemption is found in secondary legislation under the Credit Contracts and Consumer Financing Act.

Now, I put it to the Minister that ACC is in a bit of a conundrum here because either it’s going to have to meet the obligations of a lender or it’s going to have to work through this problem, perhaps by exemption or some other way. But if this bill comes into force without an exemption in place, it’s solved one problem but created another. In fact, at the moment, it’s got a problem because it has been charging interest—it’s been lending money on interest. This is why our power bills have a discount for early payment: because it’s not strictly interest. They can’t say, “We’ll charge you 10 percent more if you’re late”, because that makes them a lender or an advancer of credit under section 9—I think it is—of the Credit Contracts and Consumer Finance Act. So if ACC says “You owe us this money: $7,000. But you don’t have to pay it on the due date, you can pay it in 10-months’ time at 2.75 percent interest.”, they are a provider of credit. That’s actually a real problem, because we don’t want to have our ACC officers, case managers, or whatever they are, subject to the Financial Markets Conduct Act and all of those other things. I hope they don’t have to do the affordability testing and so on.

So, look, it’s a real question, because local bodies got absolutely caught out by this. Now, it may be that your advisors have thought about that carefully, but this should not pass the House if it’s going to stop one problem and create another.

Thank you, Madam Chair. I think the Hon Duncan Webb did raise some good points. I’ve been advised by officials that in fact no credit is being offered. It is just delaying payments, and paying for that ability.

I move, That debate on this question now close.

I’m going to take one call from Rachel Boyack, but I think we’ve really exhausted, actually, clauses 1, 2, and 3, and some of the questions are actually going further. So I’m going to take one question on that, because we’re just waiting on some advice about some amendments for clauses further down. But I think we are pretty much exhausting the first three.

Point of order. Thank you very much, Madam Chair. Could you, please, provide some clarification of what you meant by “We’ve nearly exhausted debate on clauses 1, 2, and 3.”

Well, we’re hearing the detail around validating the past practice, and questions around how we move forward based on that. The first three talk about title, commencement, and principal Act, so we have kind of defined what we’re trying to do here, and the Minister has made it clear at this point that he wasn’t—

Hon Kieran McAnulty: The question, however, Madam Chair—

CHAIRPERSON (Barbara Kuriger): Yes, we still have to put the questions. I accept that. But I’m just saying we’re actually hearing things that are related to levies being collected by instalments, which is down in clause 4.

In Speaker’s ruling 127/1, it outlines that in a clause by clause consideration, the debate on clause 1 will be a more fulsome debate around the bill. That then allows for contributions to be around the broader aspects of the bill.

CHAIRPERSON (Barbara Kuriger): Yes, I accept that.

Hon KIERAN McANULTY: Thank you for that. Given that that Speaker’s ruling is quite clear on that matter, it comes as quite a surprise to get an indication from you that, in your view, we have covered clauses 2 and 3. So the reassurance that I think the committee needs at this point is that, whilst that might be your view in terms of the topics covered in this debate, when the question for clauses 2 and 3 is put, there will still be the opportunity to contribute to that question.

Yes.

Thank you for the opportunity to have a further call. I actually just want to pick up on some of the points that my colleague the Hon Kieran McAnulty has made in his point of order. Because, as the spokesperson in this debate, I have been looking specifically at the broader issues here. I actually do have a number, quite a number, of specific questions, particularly about the commencement date. It’s actually a very critical part of the bill and I even saw the Minister nodding. So I just want to foreshadow that I have deliberately left off questions—

CHAIRPERSON (Barbara Kuriger): OK, so perhaps we can have those questions now.

RACHEL BOYACK: Well, Madam Chair, just with respect—doing our best here to actually follow the Standing Orders, and as I understand it, when we get to particularly clause 2, I will have some very fulsome questions around the commencement date.

So I have questions now—just foreshadowing that, just to be really clear, because obviously I understand it’s helpful if members can provide advice to the committee that they have a number of questions so that the Chairs can actually allow people to make further contributions.

Around the purpose, I have two further questions for the Minister. I do refer to the Legislation Design and Advisory Committee (LDAC) guidelines, but on a different matter, and this is around a strong understanding that when we’re passing legislation, we should actually understand who may or may not be affected. That is actually part of the LDAC guidelines. So one of the things that we haven’t yet engaged with the Minister about is a discussion about exactly how many people are affected. He does have his officials here, and I would very much hope that there would be some information provided about how many businesses and sole traders operate instalment plans currently, and how many have over the last 20 years. Because actually it’s an important matter for us to understand the extent of how far this bill goes in terms of those who are actually covered by it.

The second question I have, which is specific and is around the purpose of the Act, is around the penalty interest. One of my questions is whether the Minister considered also including in the regulations—and is going to consider—details around the penalty interest, whether he considered looking at those penalty interest rates in the legislation that we’re looking at tonight, and whether he would look at including them in the regulations in the future.

I move, That debate on this question now close.

The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 1 to insert “and retrospective validation” be agreed to.

Members, we now come to clause 2—

I raise a point of order, Madam Chair. Thank you, Madam Chair. I’m just wanting to seek your guidance. You accepted a closure motion, which I don’t have any comment or challenge on, but just prior to that, you did indicate from the Chair that there was advice that was still being sought. Now, the committee is at a point in time where it has now voted on clause 1 but some of that advice was not given to the committee. So I’m just wanting your clarity around that.

Just to clarify for the member, the advice that we’re getting around amendment papers is actually further down in the order. Thank you.

Clause 2 Commencement