9. Hon DAVID PARKER (Labour) Link to this
to the Minister for ACC
Does he stand by his statement on Morning Report on 1 April when, in response to my statement that “you’ve been calling ACC insolvent”, he said “I have not”?
Hon Dr NICK SMITH (Minister for ACC) Link to this
Yes. The member’s assertion on Radio New Zealand National was incorrect, as it was based on a half-quote. I originally said: “if ACC was an insurance company, it would be insolvent.” The advice I have received from the department and from the Accident Compensation Corporation (ACC) is that the corporation’s solvency has declined over the last 3 years, and that its financial position is unsustainable without very large levy increases or significant changes in policy. I note that the new chair of ACC, Mr John Judge, whose experience I put over both mine and the member’s in respect of finances, has used even stronger language than I have about the state of ACC’s finances.
How can the Minister’s denial have any credibility when Hansard, the official report of Parliament, quotes him as saying on 4 March 2009: “The reality is that ACC is effectively insolvent.”; and how can he continue to deny that he misled the public and Parliament?
Hon Dr NICK SMITH Link to this
The financial issue is very clear. As John Judge, the new chair of ACC, said to the select committee, this organisation has liabilities of $22 billion—and I note that Mr Judge thinks that that is probably understating them—and assets of $10 billion. Any private financial organisation in that position would be insolvent.
I raise a point of order, Mr Speaker. Earlier today in question time you made a good point, and I wrote it down at the time. You said that for Ministers to deny responsibility for something they plainly are responsible for leads to their not being a Minister for much longer. I think that struck to the heart of what question time is about. It is the role of the Opposition to ask questions of members of the executive in order to point out inconsistencies or irreconcilable statements. My questions today are not about whether ACC is insolvent; they are about whether Dr Smith has denied saying it was insolvent, when, in fact, he has said that. The member’s answer to that question went down a completely different track and did not address the question I had asked.
Hon Gerry Brownlee Link to this
Mr Speaker, I ask you to turn your attention to Speakers’ rulings 165/5 and 165/6 and, for that matter, 165/3 as well. They make it very, very clear that the Speaker does not judge whether a Minister answers. Appealing to you, as Opposition members have been doing frequently lately, for an intervention like that stands in stark contrast to the intention of those rulings. There are quite a large number of other Speakers’ rulings as well on this matter.
Mr SPEAKERHonourable members are well aware that I have been trying to improve the standard of answers to questions rather more than, perhaps, some other recent Speakers have done. But I would ask the honourable member to reflect on the fact that, as Speaker, I can require answers to be more precise only when the questions are clear. The primary question was, I must accept, pretty clear, and the Minister answered it. But if the member reflects on the words he used in introducing his supplementary question, he said—if I recollect correctly—words like “How can the Minister deny that …”. It was that type of question. If one wants precise answers, the language used in questions has to be very clear. Members will have noted that where I have been requiring answers, the nature of the questions asked has been very simple, very clear, and with no political overlay. As Speaker I will do my best to make sure members get an answer, but I invite the member just to think about the language that precedes the substance of his question, because it makes it difficult for me to insist on an answer. I invite the member to ask a further supplementary question.
I raise a point of order, Mr Speaker. My difficulty is that it is hard for me to be more specific than to quote Hansard.
The point I was making to the honourable member was that there was nothing wrong with quoting Hansard—that is dead right. It is the language that precedes his question that makes things so difficult. When he asks “How can the Minister …” he is seeking an opinion about how the Minister can do that. The Minister gave an answer about how he could successfully do that, in his opinion. That is why I invite the member to think about the language he uses when asking a question. The Minister, in my view, has to try to answer the question, and the Minister did, because in explaining how he could say what he said he explained his thinking around that. As Speaker I cannot insist on a better answer than that.
Does the Minister take his standard of conduct from the John Key edition of the Cabinet Manual, which is also relied upon by Richard Worth?
Hon Gerry Brownlee Link to this
I raise a point of order, Mr Speaker. If you are going to demand higher-quality answers from members on the Government side of the House, then surely you should be asking for higher-quality questions from members on the Opposition side of the House. That question was totally gratuitous in its nature.
Hon Dr Michael Cullen Link to this
Mr Speaker, as I recollect your rulings so far—and we are creating a whole new set of rulings in this area—what you have argued is that if a political question is being asked, then a political answer is perfectly in order. I suspect you would think that that question was a rather political question, and the Minister may be able to give, therefore, a rather political answer.
The member makes a good point. I did not intervene, because the Minister gets the last word. Where a question is gratuitously political, the member asking it can expect to be dumped on politically. I am sure that Ministers are perfectly capable of doing that, and I am sure that they would not wish me to rule out questions that gave them the opportunity to do it. But the reason why answers are important when a straight question has been asked is that I believe the accountability of Ministers to this Parliament is at stake. Where a political question is asked, I am sure Ministers are perfectly capable of dealing with it.
Hon Dr NICK SMITH Link to this
I stand by the statements I have made about the state of the finances of ACC as part of being honest and up front with the public about the extent of the problems. It is just a pity that Labour breached the Public Finance Act in hiding the mess that it left in ACC.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. There is a difference between a political answer and one that point-blank denies an independent inquiry. Labour was not found guilty—
The member will resume his seat! The member must resume his seat now! I do not want the member, in his last days, to be the first to take an early shower—although I am very impressed by the member’s exercise regime. The member cannot use a point of order to question whether the statement the Minister is making is correct; that is not the correct procedure for dealing with his disagreeing with it. He can ask a further supplementary question, should he wish.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. I take personal exception to the statement that there was a breach of the Public Finance Act by Labour, because that could refer only to me and the previous Minister for ACC. There was an independent public inquiry. The scaffolding was erected, the rope was provided, but the independent inquirer declined to hang us.
Hon Dr Nick Smith: I seek leave of the House to table the report of the inquiry, which makes plain that the Public Finance Act was breached in the non-disclosure of the—
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. The member—and, indeed, you—ignored my point of order. The breach was found to be a breach in terms of Treasury—
Hon Dr Michael Cullen Link to this
No, Mr Speaker, it is not a debatable point; it is a point of order.
Where we get into difficulty is that I know that the member may feel strongly about this matter, but the Standing Orders do not provide for a debate during question time about the accuracy of answers. Where the member feels that an answer has not been accurate, he can use a supplementary question to further delve into that matter, but he cannot use points of order to refute an answer a Minister has given, no matter how strongly he feels—unless he wishes to make a personal explanation, and he can seek leave to do so. But he cannot use a point of order to refute the answer from the Minister. He can only use supplementary questions to do that. I am warning the honourable member.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. I am entitled to seek protection from you in this matter, and I am entitled to seek an assurance from you that when the Minister said “Labour” he was not referring to a member of this House being in breach of a statute, because if he was, I will require him to withdraw and apologise.
Hon Dr Nick Smith Link to this
Often, the debate in the House is about ministerial responsibility. There is no question but that Dr Cullen was the responsible Minister for the Pre-election Economic and Fiscal Update. It is clear—
Will the Minister please resume his seat. We are getting into a debate about this matter, not matters of order. I realise that Dr Cullen feels strongly about this matter, but the Standing Orders do not provide for answers to be refuted by way of points of order. I cannot provide the kind of protection he seeks, because the Standing Orders do not provide for that. He can, though, ask a supplementary question, if he wishes, to refute the answer the Minister has given. I think we should come now to a further supplementary question.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. I am not seeking to refute an answer; I am seeking an assurance, which I am entitled to do in this situation, that when the—
Dr Cullen will resume his seat. I have reached the limit of my patience. He cannot raise a point of order unless he wishes to make a personal explanation. The Standing Orders provide for that situation. If he feels that his integrity has been impugned, he can make a personal explanation, and the House must accept it. But he cannot use the Standing Orders to refute an answer. There is no provision for that situation. I have ruled finally on that issue, and I will not hear further on it. I make that very clear. If this matter is raised again, I will ask a member to leave.
Hon Dr Michael Cullen Link to this
I raise a point of order, Mr Speaker. I seek leave to make a personal explanation on this matter.
Hon Dr Michael Cullen Link to this
On a number of occasions in the House since the election the claim has been made that I breached the Public Finance Act because of non-disclosure of matters relating to ACC. An independent inquiry was formed to inquire into that matter. That inquiry found that the rules that Treasury was following in relation to disclosure were not consistent with the Public Finance Act. The inquiry specifically did not find any blame on the part of, or any breach by, the two Ministers who might have been involved—I and Maryan Street. Therefore, there was no breach of the Public Finance Act by me or, indeed, by Labour.
I raise a point of order, Mr Speaker. This is a completely different point of order. We have a new microphone system in this House—relatively new; it was installed in the last year—and I noticed that when Dr Cullen was making his earlier points of order, the person in control of the microphone button cut him off prematurely, as soon as the Speaker started to rise. It is very normal in this House for the end of phrases to be allowed to be delivered, and things come to a natural conclusion. I find it somewhat over the top when, effectively, someone acting for the Speaker—and I am not suggesting it is the Speaker—switches people off in a way that ruins the flow of Parliament.
I have no control. I assure the member that I did not switch off the sound. But I do make clear that the one thing I insist on being respected in this House is that when the Speaker gets to his feet, any member on his or her feet, unless it is a special occasion, will sit down. I do not care whether the member has finished what he or she is saying. There is no dispute about that matter; he or she will sit down. It is hugely important to the good order of this House. If the member has a further supplementary question, I invite him to ask it.
Does the Minister intend to adopt the National practice made popular by his colleague Dr Worth of phoning the Prime Minister on Saturday afternoon to confess to being caught out on his irreconcilable inconsistencies; if so, does he expect absolution?
Hon Dr NICK SMITH Link to this
I find it interesting that the answers I have given to the member about the financial state of ACC are totally supported by the evidence that was given by Mr John Judge at the select committee, which was actually that, far from my statements being shonky, I had been too conservative, and the problems were worse than I had stated.
Michael Woodhouse Link to this
What reports has the Minister received from the new ACC chair on ACC’s liabilities?
Hon Dr NICK SMITH Link to this
Mr John Judge has advised me that after meeting with the scheme’s actuaries and the auditors he believes that the figure of $22 billion in liabilities—described by members opposite as a gross exaggeration—is actually light. He notes, for instance, that the $22 billion is based on future health-care inflation in the out-years of 1 percent per annum, when in the last 10 years it has been running at an average of 6 percent. There are also very optimistic assumptions about improvement in rehabilitation rates, when over the last 5 years rehabilitation has been getting worse. The chair has advised me that the true liabilities of ACC—making more realistic assumptions—are likely to be at least $2 billion worse than those I have quoted.