5. DAVID BENNETT (National—Hamilton East) Link to this
to the Minister for ACC
Has the Government had to provide further funding to ACC this month to assist in meeting the corporation’s liabilities?
Hon Dr NICK SMITH (Minister for ACC) Link to this
Yes; this week, the Government has approved additional funding for accident compensation of $97 million to address underfunding of the non-earners account. We provided $200 million in December to the scheme to address the blowout in that account that was not disclosed in the pre-election fiscal update. The additional $97 million that has been provided this week was flagged then, but was subject to a further actuary assessment. This has shown that the shortfall was actually $384 million, which means that the solvency in this account will continue to deteriorate, despite the injection of over $290 million.
Hon Dr NICK SMITH Link to this
The latest Department of Labour commentary on the quarterly report of the Accident Compensation Corporation (ACC) shows an ongoing deterioration in the scheme’s rehabilitation rates. The 3-month rate, which is the common measure, has declined from 69 percent in 2005, to 67 percent in 2006, to 66 percent in 2007, to 65 percent in 2008, and it is now down to just 63 percent in the year to March 2009. I am advised that that will increase the scheme’s liabilities by a further $700 million.
What steps is ACC taking under the direction of the new board to improve rehabilitation rates, and thus reduce the scheme’s liabilities?
Hon Dr NICK SMITH Link to this
ACC’s new board has endorsed a number of new initiatives to rehabilitate injured New Zealanders and get them back to work. In the first instance, ACC’s front-line services have been revamped to provide a stay-at-work philosophy where clients are provided with extra services up front. In Taupō, a service has been trialled under the Better at Work banner, using general practitioners and other health professionals. It is providing very positive results, and we intend to roll out the service throughout New Zealand. Rehabilitating workers to enable them to get back into the workforce more quickly is a key priority of the new board.
Hon David ParkerWhen will the Minister come clean and say that the reason he is delaying legislation to extend the date for full funding of the earners account, which would, of itself, reduce levies is that he wants to include cuts to accident compensation entitlements in the same legislation?
Hon Dr NICK SMITH Link to this
The first point I make is that Labour had 9 years to address the time frame. It had 9 long years to address the issue of the timetable for full funding, and it did nothing. I remind members opposite that simply extending the full funding date only adds to the Crown’s liabilities and debt. That is something, I know, that Labour is not particularly focused on, but this Government is focused on it. If we are to secure the sustainability of accident compensation, it is absolutely plain that other changes will also be required.