1. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
Will he accept Labour’s offer to work together to reduce ACC levies for hard-working New Zealanders facing increasing costs?
Hon JOHN KEY (Prime Minister) Link to this
As the member knows, the Government has been working with its support partners to secure the changes necessary to rescue the accident compensation scheme. This afternoon, I welcomed the Māori Party’s intentions to support the bill going to the select committee. The National Government will continue to work with its other support party, the ACT Party, as the Government looks to reform the scheme. I can say that the Government is committed to preserving a 24/7 no-fault scheme, unlike the previous Government, which seemed intent on destroying the scheme by failing to disclose massive shortfalls in its funding. What a disgrace it was.
Will the Government adopt Labour’s member’s bill to extend out fully funding accident compensation until at least 2019, a measure that would reduce the costs faced by hard-working Kiwi families, and a bill that could be passed right now; if not, why not?
The Government’s intention is to extend fully funding the scheme until 2019, with or without the support of the Labour Party. As the member knows, that is only a small part of the answer. Interestingly enough, in the letter that was written by the Leader of the Opposition to me he finally acknowledged that there were very serious problems facing the accident compensation scheme, and that “an honest conversation is needed about the trade-offs between the scope of the cover and levy costs”. In other words, it has finally dawned on the Opposition that there is a serious problem with accident compensation.
Does the Prime Minister think it is fair that motorcycle riders are facing levy increases of up to 300 percent; if not, will he work with Labour to ensure that that massive increase in costs faced by bikers will be substantially reduced?
I guess the first thing I would say is that Mr Goff should rest assured that people do not have to pay that big increase if they only borrow a motorbike, and do not actually own it. The second point I might add is that the Accident Compensation Corporation (ACC) is proposing what it is fair enough to say is quite a significant increase for owners of larger motorbikes, with a proposed levy increasing by about $500, to $781. As I said yesterday at my press conference, it is worth remembering that on the advice we have had from ACC, a full cost recovery levy for motorcycle-only accidents is $2,215 and if we take into consideration accidents where a car is involved, the levy should increase to $3,770. Yes, it is a big increase, but other New Zealanders should know they are already substantially cross-subsidising motorbike riders.
Hon Jim AndertonAt what point along the path of accident victims paying an excess on claims of up to $100 and/or reducing compensation for workers from 80 percent to 60 percent of pre-accident income will the contract made between the Government and the people of New Zealand in 1974 be breached, and the whole basis of the Woodhouse no-fault accident compensation scheme have to be abandoned and the costly legal battles to win compensation for work injuries begin all over again with the reinstatement of the right to sue, with lawyers as the main beneficiaries?
The member can rest assured that this Government has no intention of abandoning the Woodhouse principles and the 24/7 no-fault scheme; nor do we have any intent of restoring a scheme whereby New Zealanders could sue.
Chris TremainHas the Prime Minister received any apology or explanation from the previous Government for its decisions in August and in October last year to extend accident compensation for seasonal workers, for victims of suicide, for part-time workers, and for superannuitants, despite the scheme in the year to June 2008 disclosing a loss of $2.4 billion?
Mr SPEAKERBefore I call the Prime Minister, I must remind him that he is not responsible for the previous Government’s policies.
No, I have not, but I believe the public is owed an explanation after the scheme lost $2.4 billion in the year to June 2008. It was quite reckless of Labour to have made further extensions to the scheme with no funding. It was inevitable that that would only make the problems worse, but I guess June 2008 is before October 2008 and we all know what happened in October 2008.
Does the Prime Minister accept that ACT’s privatisation proposals would substantially increase the costs imposed on accident compensation users, and does he accept the employers’ belief that this form of privatisation would be unwelcome and would add to their costs?
In light of that answer, has he seen the statement put out by the Employers and Manufacturers Association today, which says that it is wary about the reintroduction of an open competitive market, and that last time National tried to impose that, it would have resulted in large premium increases?
The advice I have received about the former National Government’s changes to accident compensation, where competition was introduced, was that it was very successful. It was the blind ideology of the incoming Labour Government that robbed New Zealanders of cheaper premiums.
I seek leave of the House to table a press release by the Employers and Manufacturers Association at 12.41 p.m. today, which states that it is wary about the introduction, and the lower costs were trying to capture the market—
Does the Prime Minister agree with Merrill Lynch that the privatisation of the work account in New Zealand would have given big Australian insurance companies $2.1 billion a year in premiums and income, that that would have resulted in several hundred million dollars in net profit, and that there would be costs loaded on to ordinary Kiwis and services reduced as a result?
No, and I guess that is why Merrill Lynch went bankrupt. It was a much better firm when I was there, obviously.
I seek the leave of the House to table a document from Merrill Lynch entitled “Potential Privatisation of the New Zealand Casualty Insurance Market”—the casualties, of course, would be Kiwis.
I am concerned that what the Prime Minister said about a letter to me may have misled the House. I therefore seek the leave of the House to table the letter that I actually wrote to him, and reserve my rights about a breach of privilege action.