6. Hon MARK GOSCHE (Labour—Maungakiekie) Link to this
to the Minister for ACC
What reports has she received on possible changes to the accident compensation scheme?
Hon PHIL GOFF (Minister of Defence) Link to this
The Minister has seen a report that, following questions in the House yesterday, the National Party was forced to admit that it was planning to open up the accident compensation scheme to private competition, a euphemism for privatisation. She has also seen reports from media, such as Radio Live and Morning Report, that National members have continued to refuse to front up and be open about what their intentions actually are. That is, no doubt, because of Crosby/Textor’s advice that although Australian insurance businesses might like that policy, the New Zealand public certainly will not. She has also seen reports in the Dominion Post that New Zealand business—as against Australian business—reactions to National’s proposals are “surprisingly unenthusiastic”.
What other reports has the Minister received on reactions to the idea of accident compensation being opened up to private competition?
There has been a range of reports, almost all of them negative, about National’s proposed privatisation. For example, the convenor of the New Zealand Law Society’s accident compensation committee, Don Rennie, on Breakfast this morning said that the proposal would be bad for accident victims and bad for employers. He asked the very good question, which National should answer, of where, if it is bad for accident victims and bad for employers, the drive is coming from. Another lawyer, John Miller, who specialises in accident compensation claims, says that National’s plans to restructure the system are “a potential disaster waiting to happen”.
Hon Dr Nick Smith Link to this
Why should New Zealanders struggling to pay their fuel bills, their power bills, and their food bills believe this Government has any idea of the budgetary pressures they are facing when the Government has just increased the accident compensation levy on petrol by 2c a litre, amounting to a 40 percent increase or an extra cost imposition of $120 million per year; and how does the Government justify increasing the accident compensation levy on petrol from 2.3c a litre in 2003 to 9.3c a litre today?
The average New Zealander is a bit brighter than the member asking the question. New Zealanders have travelled across the Tasman, and they know that the levies across the Tasman for the very system National is proposing to adopt are two to three times the level of levies in New Zealand.
Can the Minister elaborate on comments made by John Miller as to why such proposals would be a disaster?
He makes a lot of points, and I refer to just three of them. The first point he makes is the obvious one—that insurances companies are out to make a profit; that is their bottom line. He says they want to get that money back to Australia to the shareholders, and the quickest way to get the money back is, of course, to reduce the claims that are accepted. He says that they are interested in the quick and the dirty, getting people off the scheme. Now, that is good for the insurance companies, but very bad for the victims. Secondly, he makes the point that I have just made, that the Australian experience has been that the costs are much higher than in New Zealand. Thirdly, he says that he does not believe that the National Party’s system would result in costs going down, but rather going up. He says that although big business might do well out of it, the small businesses—the painters, the carpenters, the motor mechanics, etc—are the ones who will find themselves hard hit by the premiums. So I tell Dr Nick Smith that if he is worried about costs, he should listen to what the experts say. They say that National’s cost structures would be much higher to the consumers and much worse for the victims.
Hon Dr Nick Smith Link to this
I seek leave to table the accident compensation levy orders showing that they have increased from 2.3c per litre of gas in 2003 to 9.3c per litre today.
Madam SPEAKERThere is another report I should have mentioned, so I will seek leave to table it. It is from Alan Clayton, an Australian compensation analyst, who said that under the National Party’s proposal we would totally lose the range of synergies across various accounts, and that would add to our costs.