Accident Compensation (Interest on Instalment Plans) Amendment Bill

Members, we now come to clause 3. This is the debate on the principal Act. It’s a very narrow clause.

Point of order, Madam Chair. Thank you very much. Could you, please, inform the committee which of the brief number of contributions in the previous clause were repetitive and irrelevant. Whilst I do not intend to challenge the ruling, it did come as some surprise. We do want to contribute alongside—

There were not irrelevant calls. It was that the Minister had answered a very important question about why this needed to be done urgently and clarified those questions. I don’t believe anything that was asked was irrelevant but the Minister did answer them.

On that basis then, it surely would be in order to meet the criteria or qualify for a closure that contributions were no longer meeting what is required. If it was simply a case that in your view you felt the Minister had answered the questions, then it is impossible for both the Chair or the committee to determine whether those that were seeking the call would not be able to introduce new material, which up to this point has been the requirement.

Yeah, it was based on my judgment of the urgency around the question that particularly Ms Boyack was asking. And it was my judgment that that had been satisfied. It was urgent and the Minister took a lot of advice and answered the question. So we’ll move on to clause 3.

Speaking to the point of order—thank you, Madam Chair; thank you for elucidating on that—I guess the struggle that some members on this side of the House might then have is that there were members who were seeking the call, but without being granted the ability to take the call, the committee was then not in a position to adjudicate as to whether what that member was going to say would be considered repetitive or anything else. So I guess we’re trying to seek some guidance—yes, yes, we understand the House is in urgency, but at the same time it’s very difficult to understand what calls might be repetitive or not if they haven’t been given an opportunity to seek that.

OK. So I made a decision, and under Standing Order 137(3) “The Speaker may accept a closure motion if, in the Speaker’s opinion, it is reasonable to do so.” I’ve made that decision that it was reasonable under the circumstances of what was being asked, so the question is that clause 3 stand part.

Thank you, Madam Chair. I do have a few questions in relation to clause 3 of the Accident Compensation (Interest on Instalment Plans) Amendment Bill, which relates to the principal Act. As you will see, clause 3, “Principal Act” states: “This Act amends the Accident Compensation Act”.

I have looked at the purpose of the Accident Compensation Act, just in preparation for this contribution, and I have a question for the Minister as to whether this particular bill—although I appreciate it deals with matters to do with the Accident Compensation Corporation and their ability to charge interest on instalment plans. I can’t see, when I look at the principal Act, which is what we’re discussing, that this particular activity is envisaged by that Act. So what I wanted to know from the Minister is: did he receive advice about possibly having the same needed—I think, on the Labour Party, at least, we agree that this does need to be done, but whether he received advice on doing that by some other mechanism, perhaps under a different Act, which does deal with interest payments, which does deal with loans?

For the Minister’s benefit, the aspect of the accident compensation scheme that I was looking at in terms of the primary piece of legislation, which is the 2001 piece of legislation; it looks primarily at injury prevention and rehabilitation of injured workers and entitlements following injuries. I know this is related—and I’m not saying that it isn’t proximate—but what I want to know is: in the design of this legislation, in amending this principal Act, were other mechanisms looked at? I also wanted to ask the Minister whether, in fact, he looked at perhaps doing this another way through perhaps regulation instead of amending the principal Act—[Interruption] It’s my question. That’s my question, and it’s relevant to the clause that we’re discussing.

So I’d quite like to know, firstly: is it the Minister’s advice that it fits neatly within this Act? Was he looking at, perhaps, other ways to implement apart from an amendment to the principal piece of legislation? If he could just explain it. I mean, I think one of the problems that we’re having today is that perhaps it wasn’t envisaged that the Accident Compensation Corporation would actually be doing these loans and therefore need to charge this interest. So my question really is: are we fitting the correct puzzle piece back into the correct puzzle with amending this primary piece of legislation?

Thank you very much, Madam Chair. I’d remind the member that under section 266 of the Accident Compensation Act, the purpose of ACC is actually to collect levies. I’m also mindful that by people not paying a lump sum, then ACC is actually forgoing interest that it would have earned.

Thank you, Madam Chair. I’d like to ask the Minister in the chair, Matt Doocey, about the way that this bill relates to the principal Act, and he has just very helpfully explained the purpose of that Act, which is to collect levies. If I look at this Act, it is about doing that in a way that’s fair, and we’ve heard that in the regulatory impact statement (RIS). When I look at the RIS—the very helpful RIS that we have acknowledged officials for—in section 2 it talks about the criteria that would be used to compare options, and it states fairness, transparency, legal risk, and alignment. In fact, further in the RIS there is a table that goes through each of those quite carefully, and it even calculates pecuniary benefit as well as non-pecuniary, so that is incredibly helpful.

But I do have a question from a policy perspective, because a lot of this debate and a lot of the new Act is being predicated on fairness—that’s the nexus with the Act that it is amending; both Acts are about fairness. We have had legislation in this House that has really shone a light on fairness, because different people have different criteria for fairness. That was the tax principles Act, that mentioned vertical equity, horizontal equities—so, vertical is the same classes of people being treated the same; horizontal is across everybody, that if you look across, there is fairness. There’s also certainty—so, how certain is the fairness or the action that is to be taken? How predictable is it? There’s fairness around compliance in administration, and some questions have come up to do with—for example, the really good question from Rachel Boyack about—

CHAIRPERSON (Barbara Kuriger): The questions around fairness seem to be more general than how does—can you relate that to the principal Act, because that’s what we’re trying to have questions on here.

INGRID LEARY: Thank you for that guidance, Madam Chair. The nexus, as I had mentioned, in my view, is that both of these Acts are about fairly collecting levies. This Act purports to change the earlier Act, which the Minister helpfully said is about collecting levies, and the purpose of that Act is to do it in a fair way, and so is this one.

I did point out that I would have a number of questions, and I didn’t get to the policy question around fairness and the basis on which these decisions are being made. I think it is really timely to do it, because otherwise I’d have to do it in the next section—just really picking out whether fairness is an appropriate and well enough understood basis from which to make this kind of table and schedule. Perhaps had he thought about crossing it out and just looking at transparency, the legal risk, which has clearly come through the debate, and also the alignment, because it’s unhelpful, I would contend, for us to have passed legislation that has laid out very clearly six principles of fairness, under the taxation principles Act—that has now been repealed, but there was a common understanding of what that involved. Now we have fairness, which is explained in a different way and there are assumptions around it.

This is an important question, because both of these Acts, the thing that links them together is the fact that they are trying to collect levies in a fair way, and so it is really appropriate for the Minister to be able to explain to us: on what basis, what policy basis, were those evaluations made? I can understand, on the table, transparency, legal risk, and alignment; they’re very clearly set out. I’d just like to know whether fairness is the right criteria. Did he turn his mind to whether that was appropriate, and what other ways could it be looked at to make sure that the same principle of fairness applied both to the principal Act and to this amendment?

Thank you very much, Madam Chair. As that last member alluded to, the Accident Compensation Corporation is built on the principle of fairness, and also raised awareness of the principle that debit interest, which we’re talking about tonight, also disincentivises instalment options that could be used as a cheaper source of finance.

Thank you, Madam Chair. Look, I do just have a quick question relating to—

Hon Member: Quick question.

RACHEL BOYACK: —clause 3. And it will be a quick question. I just note, of course, that we are in urgency, so the need to actually interrogate and ask questions is of vital importance so that we can actually have a strong—

CHAIRPERSON (Barbara Kuriger): That’s true—so ask the question.

RACHEL BOYACK: —understanding of the bill. I’m getting there. I want to come back to some questions I asked earlier, actually, because they do relate to the fact that clause 3 talks about amending the principal Act. I come back to the fact that we’ve got these two sections sitting inside the Accident Compensation Act 2001: one is section 234, around ACC “may charge a reasonable fee to recover its costs of collecting any levy by instalments.”; and the second section that is relevant is that the empowering provision provides that regulations may prescribe, and then I quote, “the matters in respect of which fees or charges … payable under this Act, including any administration fee payable in respect of levies paid in instalments:”, which is section 333(1)(b)(i).

Stuart Smith: What’s the question?

RACHEL BOYACK: Just to members opposite, sometimes you need to preface a question. But my question to the Minister for ACC is: did he consider whether amending the Act was the best process by which to go about making these changes? Colleagues have asked about regulations, and we had questions on this earlier but I’m bringing them back into the debate because we didn’t get a satisfactory answer—did he consider testing this in the court? We have noted previously, and we still haven’t received that information about the legal advice that is redacted within the regulatory impact statement. We are in urgency, we don’t have an opportunity to solicit a departmental report or to receive advice in private from officials in a select committee process, so I’m asking the Minister again, just having gone through the sections of the Act that are to be amended, whether there was any other option that he considered, either through secondary legislation or whether he did look at getting a decision from a court, and what was the advice that he received on that?

In response to the several times I’ve been asked those questions about options and the court, my answer stays the same. When I’ve been asked previously, I’ve said that I believe there was no need to drag ACC through courts for technical change. Around the options I considered: to the extent that there was an 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.

I move, That debate on this question now close.