12. CHRIS HIPKINS (Labour—Rimutaka) Link to this
to the Minister for ACC
Does he stand by his answer to question 4 on Thursday last week “that funding will be taken from either the earners account or the work account” and “that a higher proportion of claims than the overall average for ACC are actually in the work account”; if not, why not?
Hon Dr NICK SMITH (Minister for ACC) Link to this
Yes. The Government moved quickly to assist people who had been seriously injured in the Christchurch earthquake, by extending accident compensation coverage to the first week following the earthquake. The cost of that will be met from the work and the earners accounts, but there may also be some exceptional circumstances where it will be funded from the motor vehicle account. I also stand by my answer that a higher proportion of income compensation claims will fall to the work account. Those claims usually make up about 20 percent of claims, but in the case of the Christchurch earthquake they make up about 40 percent.
Has the Government made an in-principle decision to allow private insurers to provide cover under the work account, rather than continue with the universal coverage that the accident compensation scheme currently provides; if so, will a future Government be able to direct those private insurers to pay above scheme entitlements in the event of an unforeseen event or natural disaster?
Hon Dr NICK SMITH Link to this
The Government remains absolutely committed to a universal, 24/7, no-fault scheme that will ensure, just as per the tragedy of the Christchurch earthquake, that people will be covered. Because the entitlements are determined by legislation, exactly the same mechanism could be used for providers other than ACC. I am surprised that the member opposite would want to try to make politics out of the tragedy of the Christchurch earthquake.
Will he guarantee New Zealanders that if the ACC work account is privatised, the level of cover in the event of a natural disaster will be no less than it has been for the victims of the Canterbury earthquake; if not, why not?
Hon Dr NICK SMITH Link to this
Absolutely, because the entitlements for those who are injured in an accident are, and will be, provided for in legislation. I also say to the member that he is incorrect with his rhetoric of privatisation. The Government has made plain that it has made a decision in principle to allow insurers to provide the option and choice of providing support alongside ACC.
Can he reassure New Zealanders that should an influx of accident compensation claims due to an unforeseen event such as an earthquake cause a private insurance provider providing cover under the accident compensation scheme to go broke, New Zealanders covered by that insurer will not be left high and dry; if not, why not?
Hon Dr NICK SMITH Link to this
It is equally true under ACC. In fact, when I first became Minister for ACC it had made losses of $2.4 billion in 2007-08, and $4.8 billion in 2008-09. This Government has borne the very difficult job of trying to secure the future of ACC by providing a far more robust system of managing ACC’s finances.
Mr SPEAKERI think I can anticipate the point of order. Although the Minister’s answer was interesting, it was not an answer to the question he was asked. I ask the Minister to ask the question he was asked.
Hon Dr NICK SMITH Link to this
The Government will be issuing a discussion document. The event of a potential insurer going broke is one of the detailed issues that, rightly, should have to be worked through. The member should wait for that discussion paper, which will address those issues.