Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2)

PANSY WONG (National) Link to this

I will continue my very good speech to go over some of the background. Basically, the new provision regarding cover for traumatic events during the course of employment is very unfair and inequitable. In my last call I was elaborating on how the provision is unfair because, as the levy comes from the work account, it covers people only for injuries incurred during the course of their employment. The Government was not of a mind to extend cover to people injured in non-work situations, which is why the provision is unfair and inequitable. I am not too sure why the other parties are supporting the provision. The costing is also a worry. The officials gave us an indication that it will range anywhere between $7.6 million and $72.2 million. That is not what I would describe as an estimate; that is almost a wild guess. That is why employers and the self-employed are anxious. They are wondering why this legislation is being introduced when its financial impact is just a wild guess and the cost of everything is going up.

The Employers and Manufacturers Association (Northern) put out a press release about the very unfortunate tragedy that occurred in the last 2 weeks in South Auckland. Ms Joanne Wang, the owner of a bakery, had her bag snatched, then was run down by the offender’s car. Her 8-year-old was very unfortunate—he witnessed the whole thing. As the Employers and Manufacturers Association (Northern) pointed out, the poor young boy, aged 8, would not be entitled to any claim to damages. Where is the equity in that? Members of the Transport and Industrial Relations Committee asked officials why the Government had decided not to extend coverage to non - work-related events. We were told that consideration was given to providing cover for mental injury—not limited to work-related injury—resulting from witnessing a traumatic event, as part of the policy work undertaken prior to the introduction of the Injury Prevention, Rehabilitation, and Compensation Act 2001. At that stage it was considered that the provision of entitlements for witnessing a traumatic event was unaffordable. When it comes to general funds, the Government says that such entitlements are unaffordable, but when it comes to a levy to be imposed on employers and the self-employed, they somehow become affordable.

I also point out that this new cover would extend to overseas visitors. Let us imagine a situation in which overseas visitors are here for work purposes—they would actually be eligible for cover for mental injury caused by a traumatic event. Can we imagine that? I have already received lots of complaints from people asking why New Zealand taxpayers are paying for health care for overseas visitors who have been injured in car accidents. Let us consider the case of a bank robbery. If an overseas delegation from an overseas trading bank came here to witness, learn, or train in a local bank about its operation, and they witnessed a bank robbery in action, then technically, under this legislation, they would be eligible to claim. Not only do we believe that the estimated cost—which varies between $7.6 million to $72.2 million—is a wild guess but I am not too sure that people understand that the funding would also have to cover people who have travelled from overseas to New Zealand. I am not sure whether that cost has been included; I am not sure that the officials have a real grip on that issue.

The other issue is subjectivity. The nature of mental injury, which is being introduced in the legislation, is very subjective. It is another case whereby lawyers will have a lot to argue, as will psychiatrists and people involved in the health sector. I could just imagine that the Accident Compensation Corporation (ACC) would appoint its own assessors, claimants would have their own health professionals, and each of them would have their own sets of lawyers arguing how serious the traumatic events were, whether the injuries related to particular traumatic events, and whether the injuries occurred in the course of employment. The ACC is already facing a lot of complaints. I have received complaints from self-employed and small-business people about levies and also about petrol increases. A lot of people might not realise that from 1 July there will be a 2c per litre increase in petrol, which is already expensive, just to cover the accident levy on motor vehicles. Let us think about all these additional costs.

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

Thank you for the opportunity to speak on Part 1 of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2). Part 1 covers much of the meat of this bill. It includes clause 5, “Cover for personal injury suffered in New Zealand (except mental injury caused by certain criminal acts)”; clause 6, relating to cover for work-related mental injury; clause 7, relating to cover for personal injury suffered outside New Zealand; clause 8, “Personal injury”; clause 9, “Work-related personal injury”; and clause 10, “Personal injury caused by work-related gradual process, disease, or infection”.

I can only agree with my excellent colleague Pansy Wong, who said that this bill is riddled with inconsistencies and inequities and has a very, very loose evidence base on the part of the Government. I was very alarmed when I first read some years ago the report of the Ministerial Advisory Panel on Work-related Gradual Process, Disease, or Infection. Right at the beginning of the report, on page 3, is the statement: “The advisory panel recognises that further research is required to fully calculate the cost implications of the advisory panel’s recommendations.” Sadly, that statement has just so much come home to roost in reality.

I am afraid to say this legislation is very typical of this Labour Government, which is always prepared to take on some great cause at the drop of a hat, but never really looks at the practicalities and realities—

DAVID BENNETT (National—Hamilton East) Link to this

When we look at Part 1 of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2), we see some of the fundamental parts of this legislation that have created a number of problems that previous speakers have identified. The legislation itself, as portrayed, tries to fill a gap that was left in the system through changes that have occurred over many years. However, although the identification of a gap may be relevant, the solution proposed in this bill certainly does not provide the comprehensive solution that would be sought if somebody really wanted to cover that gap.

For example, Part 1 talks about the amendments, and one of the key components of them in clause 9 concerns the term “work-related personal injury”. The distinction between work-related and non - work-related injury is fundamental to some of the problems that National has with this legislation. Why is it good enough for work-related injury to be covered when non - work-related injury is not? What is the point of difference that the Labour Government sees between people who have encountered a situation that causes an injury and are covered because they are in a work environment, and those who are not covered because they are not in a work environment? What gives the Labour Government the ability to determine whether a non - work-related injury should not be covered? What is the fundamental basis that gives it that right? There is none.

What does Labour care about volunteers—people who go into workplaces and see something go wrong that causes that fundamental injury? Those people are not covered, simply because they are not seen as being part of that work environment. I was wondering whether union officials who go into a worksite would be covered. That would be interesting to know, would it not? The vast majority of Labour Party supporters might not actually be covered by this legislation. We can imagine the situation that would occur if union officials went into a site, experienced some mental injury, and were not covered. I sure we would see an amendment from the Labour Government under that circumstance very quickly. I am sure the Minister would like to take a call to explain why her own people will not be covered by this legislation—why the very people who pay for her to sit in that seat will not be covered by this legislation.

It is a shame that Labour, in trying to deal with this issue, has made a number of distinctions between the work-related and non - work-related capacity of the person who suffers the injury. It is a distinction that will haunt Labour, just like the distinction between those who have suffered the injury in the past and those who suffer the injury in the future. This legislation is based a lot on the personal accounts of people who came before the Transport and Industrial Relations Committee and spoke about having encountered mental injury in the past, but they will not actually get the benefit of this legislation. This legislation is not retrospective. All the people who brought those heartfelt stories, which the members of the committee listened to, will not gain anything from this legislation. If Labour was genuine about wanting to have mental injury covered, the legislation would have covered not only those who are currently experiencing such injury, or those who will experience it in the future, but also those genuine cases that came before us—the retrospective cases. That is another distinction that the Government of the day has overlooked when it was doing this legislation. It has looked at what it thought was appropriate to cover; it has not covered what, on a policy basis—if it was going to follow through on its policy—it should have totally covered.

The reason Labour has not provided retrospective cover is that it knows that would be costly. It will cost a lot of money to implement this legislation, and it is an unknown cost. It is one of those Labour Party election party promises that we do not actually know the cost of, and that Labour does not worry about the cost of, because it is an unknown cost in the future. A very small proportion of the cost can be identified, and Labour can get away with that. But the real costs that come through will be much higher than that. My colleagues have identified that one of the key concerns with regard to this legislation is that those costs could balloon out to become quite extravagant costs, which will be borne by employers with no recompense from the Government.

Hon MARYAN STREET (Minister for ACC) Link to this

I would like to take this call to refute some of the nonsense we are hearing from across the other side of the Chamber about the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2). The National Party has never really understood accident compensation. Its members have never really understood the detail, and they certainly have never understood the policy since the days when the system was brought in by National members who had a more expansive vision than those who have come after them. National did introduce accident compensation—it is true. If members go back and read the words of Jack Marshall, they will see the vision behind the introduction of accident compensation. Jack Marshall was one of those who acknowledged the purpose and the visionary concepts and principles behind the Woodhouse report. It is a sad tragedy that latter-day National members have lost the vision of Jack Marshall—they need to go back to that.

I would like to say a couple of things in particular in response to the points made by National members. First, I will address the issue of mental injury caused by a traumatic event. The Transport and Industrial Relations Committee heard from a milk tanker driver and, I think, from a train driver, and we know also of a bank teller and of a miner. These people have all experienced an extraordinarily traumatic event, which has left them with a mental injury that has prevented them from returning to their workplace. It seems to have escaped the attention of National members that the reason we are introducing some redress and compensation for mental injury for workers such as those people is that these events have happened in the workplace.

These events have happened because this group of people comprises a bank teller, a train driver, a miner, and a milk tanker driver. When the milk tanker driver and the train driver saw people throw themselves in front of their vehicles, which they were unable to stop, they suffered a mental injury as a result. That is a diagnosable injury. There is a diagnostic process that I am sure select committee members were exposed to in the course of their deliberation, and it is referred to as the Diagnostic and Statistical Manual of Mental Disorders, or “DSM-IV”. This is the set of internationally accepted diagnostic guidelines that have come out of the United States, and it provides for a diagnosis that allows somebody to recognise whether a worker has received a mental injury as a result of a traumatic event.

The four people I have been talking about have suffered a mental injury that has made it impossible for them to go back to their work. In the space of 3 years the train driver was subjected to that event twice. It is almost incomprehensible that somebody should suffer such an event once in their work career, but to endure it twice is an absolute tragedy. That demands our compassion. Those people came to the select committee knowing that the legislation was not retrospective, but they wanted people to be covered by such events in the future. Those events are drastic events.

I personally think that our accident compensation scheme is the best in the world. Certainly, it is recognised as being amongst the best. It is second to none because it is comprehensive and covers work injury and non-work injury.

I would like to greet the children from Prebbleton School who are up in the gallery at the moment, and the teachers and adults who have accompanied them. I am glad they are here today. I happen to know that currently there are members among them who are receiving benefits from the accident compensation scheme, and that is what it is for: it is for work injury and non-work injury. It is for children in playgrounds and for people who engage in sporting activities. It is for people who fall off the roof of their house when they are mending it. It is a scheme second to none. It is not just about workplace injuries; it is about injuries that anybody sustains.

The Labour-led Government recognises that compensation for workers who are taken out of the workplace as a result of an injury is an economic and social good for those workers. Rehabilitating them, which is another part of the accident compensation scheme, is good for them. Getting those people back into work fit and healthy benefits both them and the economy.

PANSY WONG (National) Link to this

I am really looking forward to the Minister for ACC, Maryan Street, taking many more calls. She just told us not to worry that the Labour Government has wasted so much parliamentary time on passing legislation to deal with this new cover for mental injury caused by witnessing a traumatic event, because there will not be many claims. That was the reason she gave—there will not be many claims, so we do not need to worry.

If the Labour Government is so compassionate that it wants to cover this injury, why has it taken so long to do it? It has taken 9 long years to introduce this cover. It takes Labour members 9 years to do something, even when they feel passionate about it. It really is tough. I think it is to do with election year. The Minister told us that essentially the legislation would not cover many people, but, sad to say, she was not prepared to make it retrospective to cover the four submitters the Transport and Industrial Relations Committee heard from. I am not sure why we are debating this new cover if it will not happen very often. I have bad news for the Minister: I think it might happen quite often, because under the Labour Government law and order is out of control. The opportunities for people to witness a traumatic event during work hours might actually be on the rise. I think the only consolation is that there will be a change of Government so that law and order do not get out of hand.

I want to expand on another provision in the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2), which changes the cover relating to gradual or progressive injury incurred during work hours. There is a change in this legislation whereby the onus of proof is put back on the employer. If the employer cannot prove that an injury was incurred outside of work hours, then under this legislation it becomes a claim against the work account. That is different from the previous provision. One of the submitters was Massey University. People from the university came before the Transport and Industrial Relations Committee and said that as a good employer they have done everything they can. The area that most concerned them was that a lot of their staff use keyboards during work hours. They have done a lot in terms of improving the work environment, including regarding laboratory bench heights. They have taken a lot of preventive measures to make the workplace safe. If an employee uses a keyboard after work, if an injury is caused by an outside-of-work situation, how can it be justifiable that Massey University, even though it has been a good employer, is penalised under this legislation?

The Massey University submitters suggested quite a sensible way forward. It will be difficult, they agree, to prove whether an injury happened during work or after work. So they suggested that a percentage be worked out as to how much time a person spends at work and at home. That would make a claim a lot easier. Under this new provision it would be assumed that the injury was incurred in the workplace, and if there is a dispute, then the Accident Compensation Corporation can investigate. But can members imagine how difficult it would be for an employer to enter an employee’s home to look at his or her home environment and say whether a particular injury was more likely to be attributable to an outside-of-work situation?

Once again, this is typical of the Labour Government. As my good colleague Dr Paul Hutchison said, it just charges on, leading the world. Labour members do not actually know where they are leading; they simply lead like lemmings jumping off a cliff. As long as they are first, they do not care whether it will cost employers and they do not care whether it will lead New Zealand down in the OECD tables. They just want to lead, but without a target and without knowing where the pathway is or how much it will cost. That is why one submitter after another came to the select committee and asked how employers will be able to be good employers.

Hon DAVID BENSON-POPE (Labour—Dunedin South) Link to this

I move, That the question be now put.

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

I am very pleased to be able to speak to Part 1 of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2), because this is a very important bill and it is worthy of an extensive debate. I must say I was very concerned when I heard Minister Street claim the National Party has never understood accident compensation, because, after all, it was the National Party that legislated for the visionary accident compensation legislation in the 1970s. What we do not agree with is the “foot in mouth, head in the clouds” dose of unreality that afflicts the modern-day Labour Government, and I must say that it is a very, very dismal disease that is afflicting the modern-day Labour Government.

I was interested to hear Minister Street discuss the question of the train driver and the very worrying and concerning submission he gave to the Transport and Industrial Relations Committee. I was not there but I certainly heard about it. Yes, it is right and proper that the train driver was covered after that awful incident. But the anomaly and the inconsistency is in the fact that if a mother, with her child in a pram, was at that same train crossing and she was not employed outside the home, she would not be covered even though she had witnessed a scene just as horrific as the one witnessed by the train driver. That is why National is saying that once again we are seeing the inconsistency and inequity of the Labour Government.

It took Maryan Street something like 10 minutes of verbiage, including greeting the pupils from—is it Prebbleton School? Greetings to them, as well. We like the blue they are wearing; it is great to see. After that 10 minutes of unmitigated verbiage she had the gall to say, once again, that National did not understand the scheme. Then she went on to say that National makes play of the range of costs. Well, so we should. It is a great pity that this Labour Government, which has caused New Zealand to fall two places in the OECD rankings so that we in are the lowest quarter, does not take notice of this enormous range of costs, which varies by 1,000 percent. What business anywhere in the world could run successfully on those sorts of estimations? Yet this is the sort of legislation that this Labour Government is trying to bring in.

One of the submissions I was particularly impressed by was that of New Zealand Steel, which is a major New Zealand employer. It employs something like 1,200 people locally in the excellent constituency of Port Waikato, which I am very proud to represent. The average wage is $90,000, and it is regarded as a very good employer by its local workers, not to mention the 4,000 to 5,000 workers around the country. What New Zealand Steel says relating to clauses 5 to 9, which deal with cover for work-related mental injury, is worth noting. It says: “The proposal offers an increased level of cover but to only one group of levy payers—those funded by employers. This creates further inconsistency in the recognition of a condition suffered by an individual. If an individual suffers mental injury from witnessing a traumatic event whilst in the course of their employment, they will be covered. However, if another individual witnesses the same event but are not in paid employment, or are not at work at the time, they will not be covered.”

New Zealand Steel is a very realistic employer. It is regarded with great esteem by its workers, because of the fairness with which it employs them.

DAVID BENNETT (National—Hamilton East) Link to this

In terms of Part 1 of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) and what my colleague Dr Paul Hutchison has been talking about, which is the work-related and non - work-related criteria, a good example was given by one of the submitters to the Transport and Industrial Relations Committee, and I think people will gain a lot of benefit from hearing about it. This submission was made by the New Zealand Institute of Safety Management. It gave the example of a motor vehicle accident to show who would be covered, and who we might have expected would be covered but was not.

A motor vehicle accident may create two classes of injury. The employee who was driving will have his or her physical injuries covered, plus any mental harm that may arise—the mental injury is covered by this legislation. The pedestrian who was hit by the vehicle, and who was not at work, will have his or her physical injuries covered, plus any mental harm caused by the injuries—that is also part of this legislation. But a witness who was mentally injured, and who was not at work, will get nothing; somebody who received a mental injury as a result of witnessing a traumatic event will not be covered under this legislation. An ambulance employee who received mental trauma is entitled to claim—the pedestrian was the ambulance employee’s cousin, in this case. As members can see from this example, the proposed legislation creates two types of injury class: those who are not covered and those who are covered merely because of their employment status.

A number of submitters said that that was not in keeping with the original principles of the accident compensation legislation as put forward in the Woodhouse report. The witness in this case will not get any cover, even though the witness encountered the same traumatic event as, say, the employee did. That is part of the problem with the bill before the Committee. Two types of cover are being promoted by the Government in this case—

COLIN KING (National—Kaikoura) Link to this

It is a pleasure to take a call on the issue of accident compensation. I want to bring to the debate some experience that I had as a shearer and as a shearing contractor.

When I hear about the progressive injury situation, I know that it is a can of worms indeed, because it is a highly contentious situation. In my own life as a contractor I was subject to situations that I had absolutely no control over with regard to injuries that had happened outside the workplace—in this case, a shearing-shed. People would come to me to talk about back injuries and tendon injuries. One of the real issues we had with claiming for accident compensation was being able to establish the actual time when those injuries had occurred.

I am particularly concerned about the muddying of the waters around the issue of the employers’ account, when a situation can be clearly sheeted back home to personal responsibility. I am talking about some of the incidents that occurred when I was a contractor, when some very good young rugby players would come to me on Sunday evening to say they had a sore back. I would have been watching the game of rugby where they had been at the bottom of the ruck, and out the back they would come. Those players would show great Kiwi ingenuity. They would throw themselves with ferocity at their opponents, and then they would try to say that they had injured their back while they were on the third run of the second day at the Tiroa E incorporation’s shed at Benneydale. In that situation, I was confronted with a compelling story, and had to decide whether to sign it off and face the consequences.

When it comes down to the accident compensation scheme, as marvellous as it has been—and it has been a wonderful insulator for the worker and his or her family, who are able to manage through those times when the worker is unable to earn an income—I believe that we have to be very careful when it comes to claims for a progressive injury, because it is wide open to interpretation.

Hon HARRY DUYNHOVEN (Minister for Transport Safety) Link to this

I move, That the question be now put.

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

I hope that I will raise a new point. I did not intend to take a call in the Committee stage of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2), because I thought it was going ahead very straightforwardly and progressing quite well. But I take exception to what Colin King has just said. I do not know one accident victim who would describe the accident compensation scheme as gold-plated. I have never heard an accident victim describe this scheme as gold-plated.

DAVID BENNETT (National—Hamilton East) Link to this

I seek leave to table the commentary on the bill, which shows that New Zealand First has—

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

As I said before, Part 1 is a serious part of the legislation and it is worthy of full debate. I will refer to clause 20, which has not as yet been debated. Clause 20 deals with self-inflicted personal injuries and suicide. I think it is important, once again, to quote from New Zealand Steel, which is regarded as one of the very good employers around New Zealand, and particularly in Port Waikato—the area that I am so proud to represent. New Zealand Steel says: “We oppose this clause, which will repeal the existing clause and provide entitlements for individuals who wilfully self-inflict injuries, including suicide attempts.” It continues: “The proposed change will provide entitlements and incentives for individuals who wilfully self-inflict injuries—actions that New Zealand society considers abhorrent. It actually provides an incentive for individuals to self-harm.”

That quote comes from a large New Zealand employer that has an extremely good record of caring for its employees. It pays an average wage of $90,000, and I do not believe there have been any industrial problems on that site for decades—pretty well since it came into existence—because of its concern about its workers. So I think New Zealand Steel has the authority to speak out.

The very fact that this Labour Government seriously considers adding this clause is an indictment on this Labour Government, on its sense on fairness, and on the fact that it lacks a practical, common-sense approach to problems facing New Zealand society. When we hear the Minister saying that the Government will experiment a little in terms of what it is doing, that this is another step in change, and that New Zealand will be a leader, we can see that it does not seem to matter very much that there is a range of costs going from $7.2 million to $72.2 million—an increase of 1,000 percent. No business in New Zealand, let alone the rest of the world, could survive on that sort of loose accounting, yet that is what the Labour Government wants to do. It also wants to do this in relation to a situation that is particularly serious: that of self-inflicted personal injuries and suicide.

It is important to quote further from New Zealand Steel: “Providing ongoing entitlements over and above medical treatment is also inconsistent with the purpose of the ACC scheme, as outlined in section 3 of the Act. This requires the ACC scheme to be fair, be sustainable, minimise the incidence of injury, and minimise the impact of injury.” New Zealand Steel considers that the repeal of section 119 will encourage disgruntled employees to wilfully self-inflict injuries, which will result in more injuries, an unfair burden on levy payers who do not wilfully self-inflict injuries, and an unsustainable cost on the scheme. These are all very, very serious concerns put forward by New Zealand Steel.

The Minister Maryan Street claimed that the National Party has never understood accident compensation, but I say Labour has never understood the practicalities of a modern economy. That is the reason it is in so much trouble today. Labour members are keen to lead the country to goodness knows where. I was quite fascinated to hear Pansy Wong point out, quite appropriately, that they are like a pack of lemmings leading New Zealand over the cliff. This sort of clause would indeed lead New Zealand over the cliff.

TIM BARNETT (Senior Whip—Labour) Link to this

I move, That the question be now put.

PANSY WONG (National) Link to this

Quite interestingly, the Accident Compensation Corporation (ACC) is trying to calm all submitters and to say that one of the changes introduced in Part 2, about the due date for levy payment, is only technical. Currently, the accident compensation legislation states that the due date for the self-employed, employers, and private domestic workers to pay their levy invoices cannot be more than 2 months after the invoice date, and that ACC will calculate and apply interest to any unpaid levy from the day after the day when payment is due. The change brought about is for the levy payment to be due 30 days from the date of the invoice, rather than 2 months. But according to ACC, the penalty would still not be incurred until after 2 months, so the corporation is trying to tell all those people affected that it is only a technical change. We all know that whenever we hear “technical change”, it spells problems. If there is indeed no change, why introduce the provision?

I want to share a heartfelt, real-life complaint that I received about the way in which ACC collects payment, and those words will send shivers down some people’s spines. A 12-year-old paper delivery girl was registered with ACC, because everybody has to pay accident compensation levies. On her registration form she put down that everything else was taken care of by her guardian. Apparently ACC sent her an invoice; she took one look at it, obviously did not comprehend the significance of it, and filed it away. Next minute the guardian, the parent, received a debt collector’s letter from Baycorp, chasing up a debt. The father approached the ACC office but he was asked to dial the 0800 number. Well, that complaint went nowhere so the family contacted their local MP, the Hon Steve Maharey, who said he would fix the problem. But the family received a second threatening letter from Baycorp and then approached my office. I sorted it out with ACC, and then ACC wrote a letter and said it was not the corporation’s fault and that Baycorp should have known better.

With that type of example, where the ACC cannot get even small issues right like noticing the word “guardian” or that a levy payer is only 12 years old, then I am not too sure about this technical change whereby the penalty will not kick in until after 2 months. If the penalty interest will not be calculated until 2 months after the date of the invoice, why bother bringing in a provision to change the due time from 60 days to 30 days? As any sensible business people know, if they get an invoice and there is no penalty incurred, why would they pay?

Ministers seem to have been very keen to take calls on Part 1, so I think that it is a very good idea for the Minister to take a call and explain to all those business people, the self-employed, and private domestic workers, the significance of the change to the due time from 60 days to 30 days, when there is no penalty interest and no penalty involved. Most people see the ACC levy as a tax, because they really do not have a choice in terms of the size, the package, or what they can insure for. They really see the levy as a tax payment where they have no choice. If there is no change to the penalty regime, one is at a loss to know why Parliament is taking time to debate this provision. I hope it is not just that officials have a tidy-mind concept and feel that everybody should adhere to the business practice of payment being due after 30 days, so why not just bring it in? But ACC says it is not going to penalise people; who will believe that?

DAVID BENNETT (National—Hamilton East) Link to this

Part 2 is very important because it sets out the time frame of when it actually applies—it denies retrospective claims. One of the key things that people saw when they came to the select committee was that the claims made were about injury that had been suffered in the past—the mental injury that people had suffered in their workplace. Those cases, such as the ones of the tanker driver and the train driver, brought a lot of concern to the people in the committee. But when we look at Part 2, we see that it says it applies only from the commencement date of this part of the legislation, effectively. It covers people from now on only—it does not cover people who engaged in work and had suffered mental injury and trauma in the past. That is a huge problem for this legislation, because if we are going to be so fair and almighty, in the sense of covering all kinds of injury, then how can we distinguish between injury that somebody has encountered in the past and something that will happen in the future? If we are to provide that cover, we should provide it for all people at all times. We should not make a distinction between those people who are affected now or will be in the future, and leave out all those poor people who came before the select committee and who were the examples that made this legislation a reality. Those people will not be covered. The people who came before the select committee will be left high and dry by Labour. Labour will not deliver for the people whom this legislation talks about and who have been used as examples. This is just another instance of Labour Party electioneering; that is all it is.

Labour wants to go into an election campaign saying that it has dealt with this issue and it has something on the table. Well, it is not retrospective—it does not cover the examples of people who have sustained mental injury who came before the select committee—and that is a major problem for all those submitters. They came and provided the heartfelt stories that the select committee had to listen to and engage with to see the problem, yet they will not be covered. They have been let down by the Government. They have been sold one story and then delivered another. They have been told that they will be part of a solution to this problem, yet there has been no solution that will have any impact on their daily lives. Labour has gone out there and said it is dealing with this issue, but then has not actually provided any solution for these people.

Part 2 is very important. Part 2 means that there is no retrospectivity to this legislation. The cases that came before the select committee will not be considered, in the sense that there would be cover for retrospective mental injury. That is a shame, especially when we consider that the legislation had the potential to provide for that. If Labour had stuck to its guns, and if there had been—as the Green Party indicated at the first and second readings that there should be—an inclusion of retrospectivity, then the policy analysis of this legislation would be fundamentally stronger. By not creating that retrospective nature, we are leaving a lot of the people who came and presented their cases before the select committee out of the loop. It is a real shame on the Labour Party and on this Government that it is considering legislation only for electioneering purposes, and not for the benefit of the people who raised their concerns before the select committee.

MARTIN GALLAGHER (Labour—Hamilton West) Link to this

It is interesting that the previous speaker talked about electioneering. When I read through Part 2, I cannot see exactly where the so-called electioneering is. But I do note, of course, that Mr Key himself, when speaking to the Large Herds Association conference on 21 March 2007, said: “I want to confirm today that National’s policy is to re-establish a competitive market to provide accident insurance. This delivered more efficient accident coverage in the 1990s, and will do so again when National forms the government.” I wonder whether the submitters to the Transport and Industrial Relations Committee would necessarily have agreed with that; I wonder whether that would have been the case.

The CHAIRPERSON (Hon Marian Hobbs) Link to this

Before I call Dr Paul Hutchison, I will say that we have now had one and a half speeches off Part 2. I wonder whether we could now go back on to Part 2.

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

It is with great pleasure that I speak on Part 2 and the schedules of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2). I must say it was of great concern to hear the member for Hamilton West err and stray from Part 2.

PANSY WONG (National) Link to this

Although Part 2 looks just a small part, it is—as my very learned, intelligent, hard-working colleagues David Bennett and Dr Paul Hutchison have pointed out—a very, very important part. I am just so glad that Hamilton East is serviced by such an intelligent, hard-working member of Parliament as David Bennett, because his speech was in great contrast with that of the member for Hamilton West, who did not seem to be able to even read Part 2. It is a very small part and he could not even comprehend it.

We all have a lot of respect for my colleague Dr Paul Hutchison. He is a real medical doctor, and that is why I listened carefully to his dissertation on the amendments to schedule 1 of the Injury Prevention, Rehabilitation, and Compensation Act, which are outlined in Part 2 of the bill. I listened particularly to the point about whether the Accident Compensation Corporation is supposed to fulfil the objective of this legislation, which is to introduce the scheme’s provisions on sustainable grounds. Although we may have well-meaning, good intentions, we have to be very careful about the way we relax and simply increase the number of the types of claims, types of covers, and types of diseases, because, after all, I would say that the Labour Government continues to damage the ability of the corporation to operate on sustainable grounds.

The schedule could easily be extended to state what would happen, for example, if the Government were not to try to ban smoking and drinking. These substances cause harm to people’s health. If, on the one hand, we started to go down this track and state that the accident compensation scheme is aimed at minimising and preventing injuries, but, on the other hand, we will allow substances such as tobacco, drugs, etc., which might cause ill health to those who use them, then where does it end? All these substances can be harmful. If individuals continue to indulge in smoking cigarettes, drinking excessively, or taking drugs and they then injure themselves in the workplace, then, according to Parts 1 and 2 of this bill, that injury could fall into the category of a gradual process injury. So where does one stop?

This accident compensation scheme started off as an objective, comprehensive, 24-hour, no-fault scheme, but Labour members continue to forget that the reason we have this compensation for victims is that victims have forgone the ability to sue the offenders—it is the forgoing of the ability to sue. Now, in this bill, we have started to introduce types of injuries that could be self-inflicted. How can people sue someone else if they have injured themselves? Why are the provisions on self-harm and self-injury being brought into the legislation? People cannot sue themselves for injuring themselves; that goes against the original principles of the accident compensation scheme.

We are very concerned about Part 2 in terms of the relaxation and the ease with which the different types of causes and cover are being introduced to this legislation. The more cover and the more subjective provisions that are introduced to accident compensation legislation, the more often that long-term doubts will be raised about the corporation’s ability to provide the scheme. At the moment we already know that the accident compensation scheme has $3.4 billion in unfunded liability, and it is supposed to be fully funded by 2014. I doubt very much that that can be fulfilled under this legislation.

Hon CLAYTON COSGROVE (Minister of Immigration) Link to this

I rise to take a short call on Part 2, having entered the Chamber after being elsewhere. I listened to Dr Hutchison’s comments, and also to those of Pansy Wong. I will address Part 2, especially in terms of the commencement date—of course, those people do not want it to commence on 1 July or 1 August 2008.

I listened to the bleatings of Dr Hutchison and Pansy Wong, who were standing up for people on accident compensation and lamenting the old system. I ask those members whether it was their party, when it was in Government, that effectively flogged off the Accident Compensation Corporation (ACC), privatised it, and did away with it. I ask those members whether they will make a commitment: I challenge Dr Hutchison, Mr Power, Pansy Wong, and old “cue ball” over there—I cannot remember his name—to announce a policy tonight to make a commitment that National will not do what it did pre-1999, which was to privatise the ACC and flog it off. Do we have a commitment? Do we have half a commitment? Do we have a quarter of a commitment?

RUSSELL FAIRBROTHER (Labour) Link to this

I am delighted to follow the speech of the Minister Clayton Cosgrove. I cannot come anywhere near to his level of rhetoric or enthusiasm, but I have decided to take a more analytical approach, as one is wont to do on subjects such as this one. I was particularly prompted into taking that approach by the speech of David Bennett from Hamilton, who spoke about wanting to bring in retrospective legislation. As he was debating Part 2 I looked to see which part could become retrospective, and looking at the bill led me on an interesting journey. What he wants to do is to impose retrospective levies on employers. I was thinking about how appropriate it is in this age for a right-wing party to want to bring in retrospective levies and penalty payments on employers. How did I get to that? Let us look at the bill itself, which would be a refreshing change in this debate.

Clause 34A starts out by stating: “Transitional provision for payment of levies and payment of penalties and interest due for unpaid levies”. Mr Bennett from Hamilton says that the payment of levies and the penalties for unpaid levies should be retrospective. Retrospectivity means that we date something back to a time before the start of the legislation. Mr Bennett is advocating the charging of levies in arrears, so that levies that were not previously entitled to be charged could now be charged back to some uncertain date in the past. I was thinking about what that really means. What is Mr Bennett really saying? Is he saying that workers should be penalised as such, as he is often wont to say in this House? No, he does not say that, because the levies referred to in this clause relate to sections 21 to 23 of the principal Act. So we go to clauses 21 to 23 of Part 1 of the bill in order to see which party they relate to—the worker or the employer. Clause 21, which Mr Bennett wants to make retrospective, states: “Employers to pay levies”. So Mr Bennett’s speech, which I presume has the authority of the leader of the National Party, says that employers in this country should be liable for retrospective levies.

That is a new policy. That is not in the list of National policies announced on 9 June at Fieldays, where new policies were listed. No mention of that is made in the documentation, so that clearly is a new policy that has slipped out from this member on his feet in the Chamber tonight, in the Committee stage. So the National Party’s new way of raising money to pay for tax cuts is to bring in the concept of retrospective levies paid by employers. Either that is the case or Mr Bennett was speaking outside his party’s policy and therefore not addressing the Committee honestly on the matters before him tonight. We must assume that he is an honourable member and is acting on instructions from his leader to advance National Party policy in a debate on a matter as important as this is.

Clause 34A does not address just clause 21; it also addresses clause 22, which states: “Private domestic workers to pay levies”. What does that tell us? The member for Hamilton East, Mr Bennett, not only wants to bring in retrospective levies on employers; he wants to get at domestic workers, as well.

Does it stop there? No, clause 34A also refers to section 23, which relates to self-employed people having to pay levies, and so on.

Essentially, the National Party is advancing tonight an argument not of backdating taxes but of imposing levies that did not exist before this bill was introduced. If that is the attitude of the National members, then they must come clean. Perhaps that is why the National members voted against the tax cuts for business that came in this year. Perhaps it is because they have an agenda not yet declared. Perhaps they are not yet prepared to declare their policy on business, because it would be so unpopular—it includes not giving tax cuts to business, and imposing retrospective levies on businesses. This is new policy. This is absolutely, stunningly appalling policy if one is interested in increasing the productivity of this good country. Part 2 of this bill makes what Mr Bennett was talking about crystal clear.

I say once again—one needs to run through it in one’s head several times, because the concept is so staggering—that Mr Bennett, on behalf of the National Party, is advocating the retrospective charging of levies under the accident compensation provisions. These matters will be taken up by many business interests throughout the country, no doubt. No doubt the Insurance Council and the firm Mr Gallagher referred to—which may have had a big influence on Mr Bennett tonight—will not be taking issue with that, but employers around the country will be concerned that they will have to pay retrospective levies. It is appalling.

The CHAIRPERSON (Hon Clem Simich) Link to this

There will be one debate, three questions, and three votes.

PANSY WONG (National) Link to this

The title of this Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2) is too bland when we relate it to the serious issue I am about to raise. In Part 1 a very important change takes place, and I think New Zealanders would be appalled to learn the substantive change. Currently, the Accident Compensation Corporation (ACC) has the authority not to pay compensation for self-inflicted personal injuries and suicides. This legislation would change that; it will actually contravene a principle of the accident compensation scheme. That accident compensation scheme principle is to minimise injury while not putting an unfair burden on levy payers.

Let me share this case with the public. On 21 June—last Saturday—the New Zealand Herald stated: “A 44-year-old west Auckland man was treated in hospital today for self-inflicted sword cuts after he threatened his family and ‘smashed the hell’ out of his house and car.” The police said that by the time they reached him, he had “lost all his puff and was curled up on the couch in a bit of state.” They also said that alcohol was involved.

In 2005, according to official statistics, 5,000 people attempted suicide and, of those, 1,150 filed a claim with the ACC. This is serious. Some members of the Transport and Industrial Relations Committee argued that most of those people have mental injuries and, therefore, they asked what the point is of having a provision that gives the ACC the safeguard of satisfying itself that people have not injured themselves intentionally and do not have a mental health problem.

I challenge New Zealand First, particularly Peter Brown, in this instance. He keeps us quite entertained with lots of his sailor stories, but some of his stories are more serious. He said that it was quite common, apparently, for people to pick up heavy tools or boxes and drop them on their own feet to claim injury or health insurance. If Mr Brown continues to support this provision, then I want him to also explain, on one hand, why he told us that people intentionally injure themselves, and, on the other hand, why he is supporting a provision that takes away any safeguard against those deliberate acts.

There is a more serious side: if anybody was to dangle money in front of other people and say that if they tried to kill themselves they would get that money, then that person would probably be prosecuted for that scheme and everybody would be outraged. But we now have a Government bill—a Government bill—that would actually entitle someone who commits self-harm or who attempts suicide to compensation. In any environment I find it outrageous to legislate for a change that would almost endorse or normalise the behaviour of suicide. I am sure that my colleague Dr Paul Hutchison would be appalled, because doctors are trained to save people.

Accident compensation legislation is meant to minimise injury. Tonight we are debating legislation that says that it is OK to attempt suicide and that, in fact, compensation will be paid. I think that this is appalling, and that it is being done without much research. The number I have just mentioned, of 5,000 cases of attempted suicide, does not include people who may have self-inflicted injuries and who have attended only general practitioners and clinics. Who knows how much the compensation for their injuries would cost?

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

Thank you, Mr Chairman, for the opportunity to speak on the title and commencement clauses of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (No 2). I agree with my colleague the excellent Pansy Wong, who said that the title is somewhat bland. There is no doubt that the title could refer to a great many different things. The bill could be called the “Labour Government: Forget About Who Pays the Levies Bill”, or, in fact, the “Forget About Who Pays Bill”.

When I spoke in the first reading debate on this bill about a year ago, I looked with horror at the potential costs of this bill and their wide variation. Yet tonight Minister Street admits that the spectrum of costs that was put out a year ago is still as wide as it was then. In fact, in the mental health areas, costs go from $7.6 million to $72.2 million. That is a range of 1,000 percent. No business anywhere in the world could run on that sort of incomprehensible range. It is not just that cost that has not been fixed by the Labour Government over the last 11 months. There are also changes to weekly compensation where the range is $63 million to $138.6 million, and Minister Street says: “Don’t worry; this is just a new little experiment by the Labour Government. The imprecision doesn’t really matter all that much. We are just lemmings and we want to go over the cliff.”

Another appropriate title for this bill could be the “Compensation for Self-inflicted Harm Bill”. I think it is really important to look at what New Zealand Steel said about this. It said the proposed changes will provide entitlements and incentives for individuals who wilfully self-inflict injuries—actions that New Zealand society considers abhorrent. It actually provides an incentive for individuals to self-harm. This does seem lunacy on the part of the Labour Government—but, then, there are other titles that would also fit this bill.

The bill could be called the “Labour Government: When Economic Conditions Get Rough For Business We Will Make Them Even Rougher Bill”, because that is exactly what it does. Again, I cite the example of New Zealand Steel. It points out that the levies fall on the employer and the self-employed, and on no one else. They fall quite inequitably, and that is the problem with this bill—it is indeed inconsistent and inequitable. That would make another good title for this bill. It could be called the “Labour Government: How to be Inconsistent and Inequitable Bill”.

One other thought that has crossed my mind is that perhaps we should dedicate this bill to none other than the Minister herself, Maryan Street, who at one stage of events was talking about the accident compensation scheme being second to none. Of course it is second to none! It is the only scheme like it in the whole wide world. Therefore, we could appropriately entitle this bill the “Maryan Street Second to None Accident Compensation Scheme Bill”, but that would leave her name on some legislation—an amendment—that is clearly quite ridiculous, inconsistent, and inappropriate.

One of the other names the legislation could appropriately be given is the “Let’s Blur the Margins Between Injuries Caused by Accidents and Medical Conditions Bill”. This is particularly important, because back in 1974 when National legislated for the accident compensation scheme, it was very thoughtful about it. Wisely, it brought in a scheme that recognised that the compensation for injury in this country was particularly poor and unfair. I cannot imagine those same visionary people believing that in 2008 self-inflicted injury would be compensated.

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

I probably will not take my full 5 minutes, but I want to respond to what Pansy Wong said. She made some interesting comments. She drew New Zealand First, and me personally, into the debate about self-inflicted injury. She is correct inasmuch as I did express some concern about that clause at the Transport and Industrial Relations Committee, and she approached me and intimated that National would produce a Supplementary Order Paper to delete the clause. I said, if I recall correctly, that New Zealand First would give that strong consideration.

But after that I spoke with officials and various other people, and I put our view this way: New Zealand First accepts that people who attempt suicide, successfully or unsuccessfully, are, in general terms, suffering from some mental disorder. We do not think it is a natural thing to do, and we would not challenge that as being beyond the coverage of the accident compensation scheme.

Pansy Wong said I made it appear that it was a common occurrence for people to drop heavy boxes or weights on their feet to avoid work. I certainly did not want to give the impression that it was a common occurrence, and I would go as far as to say I did not give that impression. But I am aware—and I state it again tonight for Pansy’s consideration or knowledge—that I am aware of people who have dropped heavy boxes on their feet to get a few days off work. Their injuries were not serious, but they were covered by the accident compensation scheme and they got a few days off work.

But it was pointed out to me by officials and by other people that to do anything about that, in terms of engaging lawyers and taking the battle to court, would cost more than it would achieve and was not worth pursuing. But had the National Party members been serious in their assertions, and had they come up with a Supplementary Order Paper—as I was expecting—to delete clause 20 from this bill, my colleagues would have been prepared to give it strong consideration and vote—