6. Hon DAVID PARKER (Labour) Link to this
to the Minister for ACC
Has either the board of the Accident Compensation Corporation or the Department of Labour advised him that ACC is currently insolvent; if not, why did he say it was?
Hon Dr NICK SMITH (Minister for ACC) Link to this
The member’s question is incorrect, as it is based on a half-quote. I said: “If ACC was an insurance company, it would be insolvent. It has assets of $10 billion and liabilities of $21 billion.” I would be more than happy to table the transcript. The advice I have received from the department and the Accident Compensation Corporation (ACC) is that ACC’s solvency has declined over the past 3 years and that its financial position is unsustainable without large levy increases or significant cost reductions.
Why, when the Minister pretended last week that accident compensation was fundamentally broken, did he not acknowledge that according to the PricewaterhouseCoopers report released in April last year, in New Zealand it cost 78c per $100 of workers’ wages to fund current workplace accidents, whereas in Australia it cost an average of $2 in every $100 of wages?
Hon Dr NICK SMITH Link to this
Members opposite make a huge amount of that PricewaterhouseCoopers report. I note that it is based on 2005 data, and much has changed in accident compensation over the last 3 years. In fact, if members opposite had got hold of the changes in accident compensation a lot earlier, we would not be in the pickle we are now in.
Michael Woodhouse Link to this
What reports has the Minister received on the appointment of John Judge as the new ACC board chair?
Hon Dr NICK SMITH Link to this
I have received very positive statements that he is the right person to lead ACC at this time. His statements on Radio New Zealand National this morning that he is firmly committed to the founding Woodhouse principles of accident compensation and that he is committed to managing costs, and his dismissals of the incorrect assertions about competition and privatisation, I think give New Zealanders the confidence that this Government is fully committed to a 24/7, no-fault State insurance model, but one that is affordable for ordinary New Zealanders.
Why, when the Minister pretended last week that ACC was fundamentally broken, did he not acknowledge that in New Zealand 88 percent of people are rehabilitated and return to work within 6 months of being injured, compared with the Australian average of 85 percent?
Hon Rodney HideI raise a point of order, Mr Speaker. I do not think it is acceptable to put the sort of innuendo into a question in the House that the member did in asking the question. It is supposed to be factual, and to suggest that someone is pretending is a debatable point, I am sure, at best.
Mr SPEAKERI thank the honourable member for his point, but we cannot enforce every element of the Standing Orders. I accept the point he makes that questions are not meant to contain innuendo and that kind of thing or outrageous assertions, but I think the Minister is capable of handling the question. In order for question time to flow, I think the question should be allowed. I invite the honourable Minister to reply.
Hon Dr NICK SMITH Link to this
I would be happy to table a graph in the House of rehabilitation rates in accident compensation. It shows that in the 3-month, 6-month, and 12-month rehabilitation rates, ACC’s performance has declined over the last 5 years. The new Government does not believe that is acceptable. Getting people back to work as early as possible should be one of the fundamental goals of accident compensation.
Michael Woodhouse Link to this
What are the details of the changes the Minister announced today in respect of accident compensation levies to fund the increased liabilities of the corporation?
Hon Dr NICK SMITH Link to this
I am not pleased that I have had to increase the motor vehicle levies today by a further $32 per vehicle. That is on top of the $50 that was imposed by the previous Minister on 1 July last year. I am advised that very significant further increases will be required if we do not make changes to accident compensation, which is why this new Government is determined to better manage costs.
Why, when the Minister purports to justify fundamental changes to the scope of cover, did he not acknowledge that according to PricewaterhouseCoopers’ report last April, the cost in New Zealand of managing claims for accident compensation is 8 percent of the ACC’s total expenditure, whereas in Australia with private schemes the cost ranges up to 32 percent?
Hon Dr NICK SMITH Link to this
I say again to the member that this Government, I, and the new chair of ACC are totally committed to the Woodhouse report and its view that we do not want the “sue” culture that goes with regimes like Australia’s. But if we are to secure the future of accident compensation, we do need to get costs under control, and the $4 billion liability blowout that has occurred over the last year is unacceptable.
Michael Woodhouse Link to this
What advice has the Minister received on changes to the board of ACC?
Hon Dr NICK SMITH Link to this
I was surprised to hear, this morning on the radio, Mr Goff say: “It’s quite inappropriate to sack people because you don’t like their party politics.” I totally agree with his statement, but I note that Mr John Slater, a former ACC board member, was asked to resign by Mr Goff’s Government, and the reason given was his involvement in the National Party.