Accident Compensation (Interest on Instalment Plans) Amendment Bill

Members, we come now to clause 4, the debate on the amendment to section 234—basically that levies may be collected by instalments. The question is that clause 4 stand part.

Madam Chair, thank you very much. I just want to ask the Minister about section (1B), in particular, which seems to be really broadly worded. First it says, “The Corporation must consult levy payers on the proposed rate of interest”, which seems fair, but then it goes on to say, “or the proposed method by which the rate is to be calculated”. They are two quite different scenarios, and I’m just wondering about what informed the looseness of that provision.

We know that laws around levy making need to be very tight and predictable and clear, and yet we have two very different methodologies by which the corporation can consult. I would wager that the one way of consulting with the actual numeric value would be a much fairer way to consult than to simply propose a methodology. So if there is to be a methodology, which is much more difficult, I would wager, for levy payers to understand, what is the reason behind that? There may be a good reason.

The second part of that is that then the corporation can recommend to the Minister that regulations be made prescribing both of those things again—either a rate or a methodology. But what’s missing from this is that it doesn’t link the consultation with the recommendation to the Minister. Now, I know that I’ve sat on select committees where officials have tried to say, “Oh, but it’s good practice and that’s what happens.” But, actually, we know that if it’s not prescribed in law, it is the letter of the law, and so there seems to be a disconnect in section (1B) between the consultation and the Minister having to take that into account in some shape or form. Otherwise, there could be a scenario where consultation is done on a methodology, a recommendation is made, and then the Minister goes and does something completely different.

As I say, that may not be so important in other legislation, but when it relates to a fee, a levy, or a tax, it’s incredibly important that we’re clear and precise. So I would like to hear the Minister’s answer on that.

The reference to the words “proposed method” is because there will be a public consultation.

Tēnā koe. Thank you, Mr Chair. In light of the answer given by the Minister about public consultation, I’m curious as to whether or not the Minister has any view as to the uptake of this particular bill once it’s passed, whether or not it’s been based on data, and whether or not it will be actively promoted or discussed openly when the public consultation happens.

I’m really curious, because the data is really important as we look towards what ACC needs to do and how they will interact with the businesses the data was collected about. We know the data of how many clients there are, how many businesses there are. But I’m curious, Mr Chair, through you, whether or not the Minister can describe the expectation, or if he has any expectations, of the uptake of this particular bill once it’s passed and, once again, whether or not it will be actively promoted with respect to making sure that those who are struggling out there or those who look towards ways to make their payments through instalments will be actively engaged as the consultation goes out, or if it’ll just be a broad-sweep consultation process, which generally tends to skim over the top and doesn’t actually get to many of the people that it probably should get to.

Many of the people who are busy running businesses don’t get the opportunity to get out there to be able to engage through this consultation. So if, through you, Mr Chair, I can ask the Minister to consult with the advisors there to make sure that we know, as we all return to our homes and we go out and we talk about what we did here through urgency, whether or not they can wait to expect active engagement and promotion from ACC or whether or not they have to go looking for it. Those are my questions to the Minister.

Thank you very much, Mr Chair. And just to acknowledge the Hon Peeni Henare with his contribution, I agree with him that the engagement needs to be active—just to acknowledge the work, when that member was the Minister, around looking at it through an access lens as well, and I think it’s important—clearly, organisations and entities can be awash with data; there’s no shortage of it—to ensure that we engage in good faith.

Thank you, Mr Chair. Thank you for an opportunity to take a call. My question draws a little bit further on the question around the public consultation. Just looking at clause 4, where we amend section 234, inserting subsection (1B), “The Corporation must consult levy payers on the proposed rate of interest payable on a levy collected by instalments”, and it goes on further.

I’m quite interested in the Minister’s comments earlier around public consultation, and I’ll get to that in a minute. My question is: what is going to be the methodology for this consultation? Who, out of all levy payers? What I’m quite interested to know from the Minister—because, obviously, there are thousands of levy payers; we all pay levies—is: does this particular clause refer also to employees who pay levies. Even though they’re not necessarily affected, the broad reading of this clause could suggest that they actually do need to be consulted, because it says “must consult levy payers”. So my question is: is it specific just to employers who pay levies? Again, this is the type of question that would have come up in a select committee process, so it will be very useful to get advice from officials through to the Minister. How will the ACC actually determine who needs to be consulted—who is affected? My blunt reading of this would say the corporation must consult levy payers. It doesn’t actually go on to state which levy payers. So my reading of it would be all levy payers, and that would be employers and those who pay levies as employees.

I think it’s quite an important question. It would be useful to get on the Hansard, because, obviously, if this did come to a court process whereby people said, “I’ve been required to pay a levy. I haven’t been consulted because I wasn’t considered to be needed to be consulted.”, I think if there has been a response from the Minister in the record of our debate tonight, that would be really, really useful.

I just then bring in that second piece about public consultation that the Minister noted. I would have thought that, actually, reaching out directly to levy payers—we should know who they are—would be a more useful way of engaging so that we can engage more directly with levy payers as opposed to a kind of broad-brush public consultation that may or may not miss people. Obviously, we are talking about the way this gets operationalised, but it is important because if we are going to operate under a process of consultation so that people are comfortable with the payments that are being made in terms of interest, then I do hope that the Minister is seeking some advice from officials, because I think it’s a really critical question to ask. So I’m looking forward to getting the Minister’s response.

Thank you, Mr Chair. For clause 4, which is on Section 234 amended (Levies may be collected by instalments), I want to first ask a point of clarification from the Minister around the subclause (1A), and then I have two further questions for subclause (1B).

I think the first question for subclause (1A) is something that may have been teased out before—I wasn’t sure if it’s been teased out before—which is around corporations “may”, and this was something the Minister spoke to just before as well—in terms of the use of the word “may”, in the sense that it doesn’t change what currently is happening. But I’m curious to get clarification from the Minister as to whether it is also appropriate to change it to “must”, because the fact that it—for the last 20 years, ACC, Accident Compensation Corporation, the corporation itself, has been charging this additional levy as part of instalments, and it’s a practice that ACC, from the regulatory impact report, seems unlikely that’s going to change. So although, on one hand, I appreciate the flexibility of using the word “may”, I am interested to hear from the Minister as to whether “must” is something that he has considered when it came to the drafting of the bill. So that’s my question for subclause (1A).

For subclause (1B), the first question is: “The corporation must consult levy payers on the proposed rate of interest”, and not to anticipate the kind of discussions that we might have later on when it comes to clause 6 on Schedule 1AA amended. This is really interesting to me because I would like to kind of get a clarification and sense from the Minister in terms of his interpretation of the phrase “proposed rate of interest”. Because in clause 6, and particularly when we’re looking at New Part 5, it lays out three different percentages and in three different month instalments: three, six, and 10 months, currently. I want to know from the Minister, when we’re looking at subclause (1B), whether the proposed rate of interest applies to the rate only, or it also applies to the type, as in, will it give the flexibility to ACC when they are consulting levy payers to look at more broadly not just the percentage of each of those but also the duration? Potentially they may want to introduce something else like, you know, a 12-month plan, a 24-month plan, or a 5-month plan. So that’s the second question I have for subclause (1B).

The third question I have is around this, that in subclause (1B) it says: “the rate is to be calculated before recommending to the Minister that regulations be made”. I would like to get, again from the Minister, and this is in lieu of any sort of conversation and dialogue we are able to have in a normal legislative process in terms of being part of the select committee or having a more robust discussion, what would be the time frame we are looking at when we are looking at the process of consultation and then going on to the recommendation?

So those are my three questions. The first question is: has the Minister considered the use of “must” instead of “may” under subclause (1A); or is flexibility something the Minister is interested in, or how to take priority in? And the second question is around subclause (1B), which is whether we’re looking at the proposed rate of interest, both in terms of the rate and type. And also the third question with subclause (1B) is: what is the intended duration between the consultation and the recommendation? So if the Minister is able to sort of shed some light on those three questions, that will be really appreciated.

The answer to one of those questions around the time frame of consultation would be four weeks. The other question about the proposed rates, I suppose, is an important part of why we do go out and consult, and there was a question earlier about public consultation versus consultation of people who pay levies, and both would occur.

CHAIRPERSON (Greg O’Connor): Ingrid Leary. We are on a very narrow clause.

Yep, and in the spirit of the back and forth—having heard the Minister’s answer to my question about consultation, which was really useful—I just want to clarify, if I’ve heard correctly, what he said and then also propose a drafting change, if I may, sir, because we don’t have the opportunity to do that in select committee.

So am I right—through you, Mr Chair, to the Minister—that the consultation will be both on the methodology and the quantum of the levy? If that is the case, then may I suggest that the drafting should say, instead of “levy collected by instalments or the proposed method”, there should be “and” rather than “or” in that first reference.

Then, equally, in the second half of section (1B), prescribing the rate of interest, once again strike out “or” and input “and” so that it’s unequivocal—people won’t have to go to the Hansard to hear the Minister’s statement on that. But I just want to check with the Minister, if I’ve heard that correctly, that there will be consultation on both of those elements.

Thank you, Mr Chair. Look, I’m coming back just on a question that I asked the Minister earlier because it was actually a very specific question that I haven’t yet had an answer to. It was in relation to—and I will keep it quick in the interests of trying to get an answer, but I just note that the Minister is getting some advice from officials so he may wish to just ask officials.

As well, I ask specifically about which levy payers. Because my pure reading of the new clause which is being inserted after section 234(1) inserting (1B), “The Corporation must consult levy payers”. My specific question was: is this all levy payers? Levies that are paid by employers and employees. It was a very specific question, and I think it would be useful for that to be recorded in terms of the response from the Hansard.

Well, thank you, Mr Chair. There was a question around the word “or”. I’ve been advised by the advisers: that is so the ability to put the formula in for the levy rate.