Injury Prevention, Rehabilitation, and Compensation Amendment Bill

Hon RUTH DYSON (Minister for ACC) Link to this

I move, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill be now read a third time. This bill merges the Accident Compensation Corporation’s (ACC) self-employed work account and the employers’ account into a single work account, so that levies better reflect industry risk and are more stable. The bill also renames the medical misadventure account as the treatment injury account.

Under the current ACC account structure, the use of self-employment as a rating factor results in the different treatment of small businesses that carry out similar activities that entail similar risks. For example, self-employed plumbers currently pay a different levy rate from that paid by sole-trading plumbers who have set themselves up in a company structure, even though they face exactly the same risk of workplace injury. The basis for this unfairness lies in the failed privatisation attempt made by the previous National Government. The insurance industry did not want to insure all self-employed people, because they knew that they would not be able to make enough money from them due to administration costs. So an arbitrary distinction was made based solely on business structure, and the self-employed work account was thus created.

With coverage for personal injury being renationalised, the self-employed work account is no longer needed. The account merger will allow levies paid by businesses to be paid on the industry risk associated with their industry grouping, rather than on their business structure. In its time, the self-employed work account has been very unsuccessful. It has high volatility due to its small earnings combined with a high turnover of levy payers from year to year. Small businesses in the self-employed work account, particularly, have cited levy instability as having created problems for their business cost planning.

Merging this account with the employers’ account will ensure that the levies are more stable for both the self-employed and employers. The merger will also improve the focus on reducing the risk of injury by encouraging industries to better coordinate health and safety across their workplaces, regardless of their business structure.

This merger is not intended to redistribute the excess reserves currently in the employers’ account to the self-employed. The bill, therefore, provides for a 3-year transition period for self-employed and employer levy rates in each industry or risk class, and the relative funding positions of the employers’ account and the self-employed work account to be equalised. This provision enables the Government to ring-fence the difference in the funding contributions between the self-employed and employers—approximately $100 million of the excess reserves in the employers’ account—and reimburse these funds to employers through rebates during the transition period.

I know that the Opposition will again try to pick out the businesses that may have a levy rate next year that has increased on this year, and blame it on the bill. The fact is that the indicative average levy rate under the new merged work account has been calculated at 89c per $100 of liable earnings for employers and the self-employed. This rate is based on the same funding target that is currently set down for the separate accounts, and is considered to be sustainable over 3 years. After the transition period is complete, employers and self-employed people in the same industry or risk class will pay the same levy rate.

The Government intends that the remaining overfunding in the merged account be returned to levy payers during the 2007-08 levy year and out-years. If, as some have requested, the entire excess reserve in the employers’ account were to be refunded to levy payers in one levy year, employers would experience a significant increase in levy rates in years to come. That is because the ACC would not have any excess to fund the future cost of claims. What many—including the Opposition spokesperson—do not understand is that levies are collected each year in order to fund not only the cost of claims for that year but also what the claims would cost across the lifetime of the injury. If the excess in the account was fully refunded to employers next year, levies would need to be dramatically increased in future years in order to pay for the ongoing cost of the claims that were made.

Using the bill to destabilise levies from year to year would be totally inconsistent with the objective of levy stability, which is a fundamental principle of both this bill and the Injury Prevention, Rehabilitation, and Compensation Act, which it is amending. If the amount levied from employers was lowered significantly more than is planned, ACC Partnership Programme employers would be more likely to exit the programme to take advantage of the rebate of the excess funding. That would obviously jeopardise the functioning of the programme, and it would also give financial advantage to partnership programme employers who had not financially contributed to the account from which they were benefiting.

This merger is also likely to have a positive impact on injury prevention in workplaces. By bringing self-employed people and employers together at the risk-class level, the experiences of the respective groups would come to bear on the levy rates. This will incentivise a greater level of cooperation on injury reduction between employers and the self-employed within the industry groupings of the new work account.

As both of the accounts are projected to be adequately funded for 2007-08, merging the accounts to take effect from 1 April 2007 will make the transition to a single work account easier by reducing the impact of the merger on levy payers. During the 2007-08 levy round ACC provided levy payers with information on the proposed policy package, including indicative levy rates for the merged work account to assist those seeking to understand the impact of the merger proposal.

Following the levy consultation, ACC published updated indicative levy rates on its website. The Department of Labour also wrote to each of the organisations that provided a submission on the bill, and to those who had made submissions on the proposal during the levy consultation, with further information on how the merger of accounts would be implemented.

I note that the two amendments in the name of Dr Paul Hutchison, the former National spokesperson on ACC, were defeated in the Committee of the whole House. What Dr Hutchison was asking for in his amendments will be provided, under my assurance to the House—and I repeat this in my third reading speech—on the ACC website. In my view the proposal was sensible, but it does not need to be in the legislation. However, it is something that I would be happy to reconsider in the future.

As mentioned, the bill also renames the medical misadventure account as the treatment injury account. This renaming of the account is appropriate, as the terminology in the Act was changed from “medical misadventure” to “treatment injury” some time ago. The reason for leaving the name of the account at the time was to allow health professionals and health professional organisations to become familiar with the treatment injury regime. Now that a sufficient period has passed for these groups to come to terms with the new terminology, the time is right to rename the account.

This bill builds on the framework provided in the existing legislation by ensuring that our accident compensation scheme is funded in a fair and sustainable manner. I conclude by thanking all members of the Transport and Industrial Relations Committee for their careful consideration of the bill in a short time frame. I also thank the officials from both ACC and the Department of Labour for their fine work on the bill. I commend this bill to the House.

PANSY WONG (National) Link to this

That was an appalling contribution from the Minister for ACC, Ruth Dyson, who is no more than an apologist for the State-owned monopoly agency the Accident Compensation Corporation (ACC). This bill does nothing more than legalise stealing from both the employers’ account and the self-employed work account, and I will seek to explain that point further.

First of all, today Treasury released the 6-month account to December of the Government account. Once again, that account recorded an operating surplus that was $1 billion up on the forecasts. But Treasury went on to say that most of the extra money could not be spent, because the surplus was mainly due to increases in investment return from the New Zealand Superannuation Fund, the Government Superannuation Fund, and ACC. Actually, that additional contribution from ACC amounted to $254 million. How appropriate it is for Treasury to go on to say in its press statement that those entities will hold on to any gains that are made.

Let us now come back to ACC. Apart from holding on to that $254 million, it is holding on to a $688 million surplus in the employers’ account, which represents a 63 percent margin. It is also holding on to the $60 million surplus that is in the self-employed work account before it is merged, which is a 20 percent margin. Even the Minister herself said that ACC wanted eventually to operate to an 11 percent margin on the account. But before the merger it insists that the surplus margin needs to stay at 53 percent so that in future it can make rebates to those people. But why in future? Which other entity in New Zealand has the luxury of taxing people, holding on to the surplus, and not paying interest? Even the Inland Revenue Department would pay interest on the use of taxpayers’ overpayment of tax—it would rebate that.

This illogical, ridiculous stance of ACC and the Minister seeks to penalise those hard-working self-employed people, because for the next 2 years they will be asked to front up with the additional $100 million so that their account, which sits at a 20 percent margin, will go up to a 53 percent margin. How logical is that? Well, let me give the public, and those poor self-employed people in the meat industry, a taste of what is to come for them in the next 2 years. Self-employed people in the meat industry, if there were to be no merger, would have to pay a levy of only $6.57 per $100. I ask members to guess how much they pay—[Interruption] Well, I am glad that Mr Peter Brown is at last speaking up on behalf of those self-employed people! He supported that—he thought that the rate of $6.57 was too expensive. But I ask members to guess what he did. He supported this bill so that that rate could go up to $8.83 per $100. I am looking forward to those poor self-employed people in the meat industry knocking on the doors of New Zealand First members’ electorate offices and asking them who put them into Parliament so that they could penalise those hard-working self-employed people.

How illogical this bill is, which the Minister insists is helping the self-employed! The Meat Industry Association wants an answer from the Minister, which is still to come. It pointed out that under this bill, members of the Meat Industry Association would have to pay an additional $360,000 for the next 2 years, though past history has shown that claims are only $25,000. So I am really looking forward to Mr Peter Brown of New Zealand First, who has no sympathy and no empathy for hard-working self-employed people, taking a call to justify his party’s position.

It is outrageous for this Government and the parties that support the passage of this bill to impose, on the one hand, a surcharge of $100 million on the self-employed, and, on the other hand, to hold back the $688 million surplus from the employers’ account contributors. I proposed a sensible amendment during the Committee stage. ACC says it wants to achieve a margin of only 11 percent. I was being conservative; as a National member I feel apologetic towards my colleagues for saying that ACC might get it wrong, so we should give it a 9 percent additional margin.

So my amendment is to bring down the employers’ account to a 20 percent margin and still allow ACC a 9 percent leeway, which means that employers should be entitled to a $500 million rebate—which is their money. At the same time, that sensible amendment would have meant that self-employed people would not be penalised for the additional $100 million.

I want to acknowledge Mr Gordon Copeland and the whole United Future party. They, at least, came to this Parliament to stand up for their supporters, hard-working self-employed people. They support that sensible amendment.

The other sensible amendment that I have moved is to defer the passage of this bill until April 2009, for a very good reason. New Zealand would then have a National Government, which would have a Minister like myself, who would not make apologies for ACC and who would make that State monopoly agency work for the people—not, like the Minister says, hold on to, confiscate, and steal those surpluses so that ACC can feel comfortable in case it gets the calculation wrong. That is why my diligent and intelligent colleague Dr Paul Hutchison also asked why ACC cannot subject itself to an independent team to look at the way it arrives at those levies. After all, the corporation has a history of building up those reserves. The difference between National and Labour is that we are on the side of hard-working New Zealanders, and we oppose the passage of this bill.

SUE BRADFORD (Green) Link to this

I will take just a short call this afternoon to confirm that the Green Party welcomes the return of this bill to the House for its third reading, and that we continue to offer our support to this and all other Government efforts to work towards a fair and sustainable accident compensation system for this country. There is still much that needs to be done, but every constructive step along the way helps.

The most important part of the bill we are dealing with today is the merger of the accident compensation employers’ account with the self-employed work account. The Green Party believes it is only sensible and equitable that people should not be discriminated against on the basis of their business structure when their injury risks are the same. These kinds of historical inequities arose from the National Party’s unfortunate privatisation project in the late 1990s, and it is just a pity that we have had to wait 7 years to see this particular discrepancy put right.

I would now like to take a couple of moments to explain briefly why the Green Party did not support Pansy Wong’s amendment yesterday in relation to the merger of the accounts. The issues that the National member was trying to address are covered already in clause 8, through a new section that permits the Government to make regulations to cover a transitional period until the 2009 tax year. That change allows the Accident Compensation Corporation (ACC) to deal with the problems that Ms Wong rightfully raised, and the Government has indicated that $100 million will be set aside for that purpose. This money will, in effect, act as a rebate for employers but will be assessed with reference to their business activity risk and to maintaining the stability of levies. Pansy Wong wanted to leave this new clause intact, but also to rebate in, with no defined mechanism, in 2007-08 an additional 20 percent across the board to employers. The cost of this would have been a further $100 million.

Essentially she was recommending an arbitrary, one-off gift of $100 million, to be made by ACC to employers, making it a final total extra cost to the corporation of $200 million, given that she was seeking to leave the Government’s proposed transitional mechanism intact. The Green Party therefore voted against the National Party amendment, as we believe that although we acknowledge that historical anomalies exist, it is better to start with a clean slate by simply merging the two accounts, as encapsulated in the bill.

Merging the employers’ account and the self-employed work account into a single account will be a big help in equalising and lowering the cost burden for the self-employed, who will also still have the option of taking out the CoverPlus Extra insurance if they want to. The Green Party welcomes the third reading of this bill and looks forward to further improvements to our accident compensation system—perhaps of a more substantial nature, next time round.

Dr PAUL HUTCHISON (National—Port Waikato) Link to this

The Injury Prevention, Rehabilitation, and Compensation Amendment Bill is a very unfortunate bill, in that it cements in the dull monopoly of the State’s Accident Compensation Corporation (ACC), which unfortunately is becoming less and less efficient as we go on. We have heard the Minister speak about the changes in 1998 that galvanised the ACC monopoly into action. Privatisation was associated with a rapid number of changes, which included early rehabilitation, much better safety procedures and efforts within the workforce, a lowering of the levies, and, more important than anything else, a lowering of accidents in the workplace. The changes galvanised the ACC, and it has benefited from them over the last 5 to 6 years. It is only now that we are starting to see the slowing down of ACC and the typical monopoly reactions, and this bill absolutely epitomises them.

In the title debate I suggested that the bill be called “The Labour Government (Defy Commonsense) Bill”, which is what it does by rewarding those at high risk and penalising those at low risk. It could also include a grab of over $400 million from employers who paid that money in good faith, believing that their account was fully funded, and I say that money should be given back. The merging of the accounts is directly the opposite of the basic insurance principle of matching premiums with risks. In this bill the employers’ account, which is associated with lower risks, lower claims, and lower accident rates, will be merged with the self-employed work account, which is associated with higher accident rates and higher claims. The Labour Government, intent on its socialisation of the insurance system, is merging those two accounts, to the detriment of the efficiency of ACC and to the detriment of the direct signals and incentives to improve behaviour.

The Labour Government is in complete denial over the value of experience-rating. We heard that the other night, when the Hon Mark Gosche was talking about insurance. He just wants it all to be pooled—all with the same sorts of premiums. That is sheer madness, in terms of human behaviour, and the behaviour that we know—

Hon MARK GOSCHE (Labour—Maungakiekie) Link to this

The bill we are about to pass through its third reading, the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, came to the select committee that I chair, the Transport and Industrial Relations Committee, and I was interested to note some of the strange comments from National speakers last night about the process the select committee used. We had a very limited time—which had been voted on by this House; it was not decided upon by the committee—that meant we were not in a position, obviously, to open the bill up to the normal public process of submissions. So we chose a very broad range of representative groups of employers, unions, and other interests to make submissions. They did so very well, and they came forward with some interesting views on the matter. It is interesting to note that all of the National members on the select committee agreed with that process; there is no record of National members voting against it. Yet they came into the Chamber and took cheap shots at the select committee chair—myself—last night, for a process they had agreed to unanimously. That paints the picture of the standard of Opposition we have—purely sitting there, not looking at the realities—

PETER BROWN (Deputy Leader—NZ First) Link to this

Let me make the New Zealand First position clear from the onset. When we last debated the issue of accident compensation we came down in favour of privatisation. We voted against the bill that did that, in 1998 or early 1999 as I recall, because we did not think it gave enough lead-in time before the election, but we thought the merits of privatisation outweighed a monopoly-type situation. We have not had a debate on it since.

JUDY TURNER (Deputy Leader—United Future) Link to this

I rise on behalf of United Future to speak in support of the third reading of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. I express at the beginning United Future’s concern that the Committee of the whole House failed to support the Supplementary Order Paper in the name of Pansy Wong that would have allowed a rebate to New Zealand employers. Her colleague Simon Power suggested that my colleague Gordon Copeland was self-righteous in his efforts to back Pansy Wong’s amendment, which I find a little difficult to understand. Maybe he jumped in before he had all the facts.

The Supplementary Order Paper that Pansy Wong was keen to get through last night talked about the risk ratio that the Accident Compensation Corporation itself has set. It believes that its assets should be 111 percent of its liabilities, yet the current figure of the employers account is 163 percent. Its assets are 163 percent against its liabilities. My colleague Gordon Copeland figured out that that represents $468 million of overpayment to the employers’ account, and he suggested that before the two accounts are joined and reconciled, that money should be divvied back out to the people who had overpaid in the first place. We are disappointed that people did not see the vision of that last night, so that that move could go ahead.

I want also to correct something that the New Zealand First speaker has just mentioned. He talked with some apprehension about the new account called the treatment injury account, and he was concerned that this was some sort of new provision. I say to Mr Brown that all that it does is reflect that we changed the terminology in an earlier amendment bill. We changed—as he rightly said—the fact that when people receive an injury due to a medical misadventure of some kind, historically they had to prove that the medical misadventure had taken place before they could receive compensation. An earlier amendment bill changed that, and in changing it, we changed the terminology. So we no longer refer to “medical misadventure” under the accident compensation legislation.

We now call it “treatment injury”, because people no longer have to prove that there was negligence on the part of the practitioner from whom they received the treatment. If they have an injury and it is the result of the treatment, then they receive compensation. So calling the account the treatment injury account is purely to reflect the new language and provisions of an earlier amendment bill. So it is nothing sinister; it has been in the legislation for some time now. In relation to medical misadventure, if some fault is found on the part of a medical practitioner, it is still the domain of the practitioner’s regulatory complaints authority. The medical practitioner can be put under disciplinary measures if that is deemed to be helpful to the situation.

United Future supports the overall intention of this amendment bill. It does seem ludicrous that if people are doing the same job with the same level of risk, they should be paying separate amounts depending on their employment arrangements—whether they are self-employed or employees. We think that is a nonsense, and we are happy to see that issue resolved with this bill. We are very happy with the work that the Transport and Industrial Relations Committee did to bring the bill back to the House.

I will reiterate that we are very disappointed that the Committee of the whole House failed to see the picture suggested by the Supplementary Order Paper that Pansy Wong was putting forward. I think it would have made a huge improvement to the outcome. I notice that the Green member Sue Bradford felt that the bill did cover that because regulation-making powers were mentioned in one of the clauses. I took it from what she suggested that she meant if we wanted to pay it back, there is the potential to do it. I think it is an important issue. It is a lot of money, and I think when those two accounts are blended we will lose sight of who is owed what, and the matter will just be ignored. In fact, what will happen is that surplus will end up propping up the new joint account, and I think that is an unfair provision. However, aside from that Supplementary Order Paper not being agreed to, we are happy to support the third reading.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Madam Assistant Speaker, kia ora tātou. The Māori Party comes to the Injury Prevention, Rehabilitation, and Compensation Amendment Bill aware of the responsibilities of the Accident Compensation Corporation (ACC) under the Injury Prevention, Rehabilitation, and Compensation Act of 2001. I understand that section 3 of that Act charges the corporation with “providing for a fair and sustainable scheme for managing personal injury that has, as its overriding goals, minimising both the overall incidence of injury in the community, …”.

As a consequence of the proposals that have come before the House during the passage of this legislation, all employees, self-employed people, and private and domestic workers will pay levies into the work account, with entitlements funded out of it also. The drive to create a fair and sustainable scheme has been complicated in the case of the self-employed work account by the fact that this account is often volatile due to the small number of earners and the potential claimant base. The incentive behind the bill is, therefore, to merge the employers’ account and the self-employed work account into a single work account.

The Māori Party supports any initiatives that seek to address inequities and instability in the current system and to make compliance comparatively hassle free. The intention of the 2001 Act was to provide a level playing field for claimants, whether self-employed, in high-risk industries, or in private employment. A level playing field is obviously something that every member in this House would support as being in keeping with the commonly held view about there being one law for all and due access to justice.

In this context we were concerned to read reports from the Access Support Services lobby group that ACC is exiting blue-collar workers from the scheme at a faster rate than it is exiting white-collar workers. According to a study of ACC’s own injury statistics in 2005, a plant and machinery operator is twice as likely to be exited from the scheme as a clerk or administrator is. Workers involved in the agricultural and fishing sectors or in trades are also disproportionately more likely to exit the scheme than legislators and administrators or professionals. It would appear that the so-called blue-collar workers are less equipped and supported to be able to negotiate ACC support for their rehabilitation than, say, their white-collar counterparts. This clearly demonstrates a class bias and, I might add, a race bias.

The Māori Party is advised that similar statistics are also likely to be seen for Māori workers as compared with non-Māori workers. However, there is some lack of clarity around data collection, which we want to raise in the context of this Injury Prevention, Rehabilitation, and Compensation Amendment Bill. It should be remembered that until 1998, ethnicity data was not collected for accident compensation claims. Ten years ago the ACC Injury Prevention Strategic Plan identified a goal to “substantially reduce serious injuries in ethnic groups overrepresented in injury statistics”.

It goes without saying, of course, that even though Māori have a higher injury rate across the board, Māori are significantly less likely to make an accident compensation claim and are more likely to be declined cover. In honouring this strategic goal, ACC improved the collection of the ethnicity data by establishing the injury profile of Māori and Pacific peoples. Since 1998 ACC claim forms have included ethnicity as an option. However—and here is the catch—as it has not been obligatory, it is difficult to relate claims injuries to ethnicity. Despite this, what we do know from the information available to us is that the application and take-up rate of accident compensation by Māori is significantly lower than by non-Māori, particularly given that Māori are overrepresented in injury statistics across all age groups.

Let us look at the level playing field in more detail. The data tells us that the proportion of Māori continuing as claimants in a subsequent year is even lower, and that Māori have significantly higher chances of being declined ACC support than non-Māori. We also know that Māori aged 25 to 64 years, particularly Māori men, are more likely to be injured at work than are non-Māori. This reflects the types of occupations that Māori men are overrepresented in, such as manual and trade occupations.

Therefore when we look at the purpose of this bill, which proposes the merging of the self-employed and employers’ accounts, a very obvious question is how Māori will fare. It is important to note from the outset that Māori and Pasifika people constitute the lowest proportion of self-employed amongst their populations. The ethnic group with the greatest proportion classified as self-employed without employees is the Asian labour market, on 14.3 percent, and the European labour market, on 13.4 percent, as compared with the Māori labour market, on 6.5 percent, and the Pasifika labour market, on 4.4 percent. Those Māori who are self-employed are largely involved in the primary sector, in particular in agriculture, forestry, and fishing. Those areas are known as high-risk industries and occupations.

I am told that the Council of Trade Unions in its submission on this bill endorsed the merger approach as making practical sense in that it would bring clear focus to the areas of injury prevention and health protections across particular industries and enterprises. Therefore, we would hope that the high-risk or low-paid industries within which Māori are generally employed—fishing, farming, and forestry—will benefit from the new emphasis on safety management practices and capacity for weekly compensation cover. In line with this new emphasis we would expect to see increased priority on educating the self-employed about safe working practices, and the development and implementation of new measures to ensure that safety standards are adopted.

During this third reading debate we want to bring to the fore again the previous concerns raised about the impacts of this bill’s proposals on the self-employed. We were aware that because of this bill the levies will almost certainly increase, and in some high-risk industries like fishing and forestry levy increases could be quite significant. The table provided in the Government’s briefing paper suggested that there are likely to be increases of between 30 percent and 56 percent across a range of industries as a result of the merger. We would be interested in learning what these implications will be, in particular for the employment areas of greatest risk.

Finally, the issues we have canvassed in this speech extend, of course, outside the coverage of this bill. The gap in claiming accident compensation cover between Māori and non-Māori, the lack of awareness of accident compensation entitlements, the inequality of outcomes for Māori, the increased risk of injury that accompanies industries such as fishing, forestry, and farming, and the serious issues related to the gaps in data collection do, of course, warrant far greater consideration than we can give in this forum.

We the Māori Party have appreciated the willingness of the Minister to share with us the strategies that the Accident Compensation Corporation is leading, such as the PaeArahi position, staffing and general practitioner training in cultural competency, and other initiatives related to the Māori access strategy. We support the merger as a way of enhancing the current system and we will, therefore, support the bill. We are hopeful that the issues we have outlined today will remain a high priority for the Minister and the agency. They will need to be a high priority if we are truly committed to creating an enduring and sustainable accident compensation scheme based on fairness and justice for all. Kia ora tātou.

JUDITH COLLINS (National—Clevedon) Link to this

I raise a point of order, Madam Speaker. I refer you to Speakers’ ruling 16/5 regarding eating in the Chamber. The Minister on duty in the House tonight for the Government has been eating in the Chamber. She had a full biscuit going there and ate all the way through the speech from the Māori Party. I ask you, Madam Assistant Speaker, to ask the Minister to refrain from doing that.

SUE MORONEY (Labour) Link to this

We are here to discuss the third reading of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. It is my privilege and my very great pleasure to rise to speak in support of the third reading of this bill. I have quite a bit of personal interest in this whole area, and I want to talk about the world-class system we have in regard to accident compensation, which is the envy of many other countries. When we look at some of the issues raised by Te Ururoa Flavell in the speech he has just made, where he talked about people’s knowledge of their rights under this system, I think we can reflect and see that it is just as well we do not have a system based on people having to know their legal entitlements and having to be able to afford to pay for lawyers, in order to get any money back for injury treatment.

Dr JONATHAN COLEMAN (National—Northcote) Link to this

Labour supporters listening to the radio at home are going to be chilled to the marrow by that speech, because that was the voice of the Labour Party rejuvenation programme. That dissembling, illogical ramble is what Labour is bringing into Parliament and presumably we cannot go much lower than that standard of oratory.

One of the arguments that we have heard from these Labour members throughout is that insurance premium will be dictated by business structure. Mark Gosche spoke constantly about the example of the rugby league player. He was saying that just because a rugby league player is self-employed rather than having a business structure that player will not be tackled any differently from anybody else. They are saying that people in the same occupation have the same level of business risk. They do not seem to get the point.

Let us put the issue just a bit more simply. If the members over there cannot understand the idea that people doing the same occupation can have different levels of risk, let us put it in terms they may understand, such as political risk—who might be here after the next election—and put a risk premium on that.

Mrs Yates, the former member for Hamilton East, lost her seat so one could say that she is unlikely to be here at the next election. So that is probably a medium-low risk. Then there is Minister Dyson. She probably will be here because she will have a reasonable list place, but then she could explode at any moment. So that is a high level political risk. Then, of course, there is Mr Peter Brown, the deputy leader of New Zealand First over there. He is a relatively safe pair of hands, but the reality is there is not a hell of a lot of excitement there either, and the final reality is that his party will not be here at the next election.

So there are three members with three very different sets of circumstances. But under Labour thinking, the same risk premium would be put on each one on the chance of them being here after the next election. Now that is a simple example and Labour members should be able to get that. The three members are all doing the same job but there is definitely a different level of risk for all three with regard to their being here after the next election. That is really what this legislation comes down to.

The Injury Prevention, Rehabilitation, and Compensation Amendment Bill will pool two pre-existing accounts into one so that the risk is spread across all. But in actuarial terms that is complete madness because under the terms of risk rating there will always be different levels of risk for different individuals doing the same job. The reality is that that needs to be reflected in the premium. What we have here is a Labour Government bill that is driven purely by philosophy, and purely by ideology. Labour hates competition. Darien Fenton is a hardbitten unionist and does not like competition. She is going to get up in a few minutes and tell members that.

PETER BROWN (Deputy Leader—NZ First) Link to this

I raise a point of order, Madam Speaker. I draw your attention to Standing Order 106, “Misrepresentation”, which states: (1) A member who has spoken to a question may speak again to explain some material part of the member’s speech which has been misquoted, misunderstood or misrepresented in the same debate.” I seek to explain that the honourable member who has just resumed his seat referred to me as a “safe pair of hands” and that I would not be here next time, because I do not offer the excitement—

DARIEN FENTON (Labour) Link to this

I am pleased to have the opportunity to speak in the third reading of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. I thought after the last contribution that we needed a bit of sense in the discussion, and a bit of a history lesson. You know, unlike the party opposite we actually want to have—and continue to have—a world-leading, easy to access, no-fault accident compensation scheme. The National Government nearly got away with the destruction of that in the 1990s.

My perspective—and I am proud of this—is inevitably coloured by the experiences of people and injured workers under the various reforms of the National Government in the 1990s, and I have not heard much comment about them. I know that the Opposition does not like us referring to the 1990s, but in the absence of any commitments from National—I have not heard any—to maintain the current system of accident compensation, and in view of its defence of privatisation that we have heard in this House from members opposite, I have no choice but to reflect on the National Government’s past botch-ups. This bill has reminded me just how awful that past was.

Prior to 1992 New Zealand had an accident compensation scheme that was fundamentally sound and cost-effective. It was held up as a model for other countries to emulate, but after National came to power in 1990, Bill Birch—remember him—the then Minister in charge of the accident compensation scheme, moved quickly to establish a committee to review the scheme. Interestingly, the committee included a former Treasury secretary, a former National Party leader, and a senior manager from Shell Oil, none of whom had had any significant involvement in accident compensation. This committee recommended a four-stage programme towards ultimate privatisation of accident compensation.

In 1992 the Accident Rehabilitation and Compensation Insurance Act implemented stage one, which transferred the cost of workers’ non-work, non – motor-vehicle accidents from the employers’ levy to a new levy imposed on workers by way of a payroll tax. Although many campaigned against the 1992 Act, the severe, negative impact of its provisions, particularly on severely injured people, galvanised a number of groups into action prior to the 1993 election. This group, called the Coalition on Accident Compensation, included the New Zealand Council of Trade Unions, the Disabled Persons Assembly, the Women’s Division Federated Farmers, Grey Power, and other disability and community organisations. This campaign highlighted the significant number of cases where the injured person had been disadvantaged by the severity and inflexibility of the new approach to accident compensation under National. One such case highlighted how a tetraplegic 13-year-old boy was prevented from moving from hospital to his home because the new regulations denied the Accident Compensation Corporation any discretionary power to contribute to the cost of his necessary home care.