2. Hon PHIL GOFF (Leader of the Opposition) Link to this
to the Prime Minister
When he is reported in the New Zealand Herald as saying that National had already looked into introducing competition in the ACC work account in some detail, what work has the Government actually done in considering who would benefit from it?
Hon JOHN KEY (Prime Minister) Link to this
National in Opposition undertook some work to explore the opportunities for choice in the work account. That work was not completed, which is why our policy said we would investigate introducing competition to the work account. In Government, as the Minister for ACC has said, we have not undertaken any serious analysis, because of the shambles we inherited in respect of accident compensation as a result of the hopeless management of it by the previous Labour Government. I can confirm that in recent days, though, Treasury officials have been asked for an initial précis of the advantages and disadvantages of contestability in respect of the work account.
Why does he support privatisation of the work account, when all of the evidence is that the big winner would be the big Australian insurance companies, and the losers would be ordinary New Zealanders, who would pay more and get less?
I am intrigued by the idea of more competition in the work account. I can assure the Leader of the Opposition that the summary he has given was not the experience when competition was introduced in 1998.
In light of that answer, does he not accept the arguments made by PricewaterhouseCoopers and the Employers and Manufacturers Association that the experience was loss leading by companies to get market share, followed by a big increase in levies; and does he not accept that where the system he is recommending already runs, in Australia, employers are paying twice the level of levies that employers in this country are?
For a start off, it may have eluded the member but there has been a massive increase in accident compensation levies in recent times, when there has been no competition. Secondly, it would be worth doing some serious work on this issue, but I can tell the member that if he chose to read the initial report I have had from Treasury, which was delivered to my office at lunchtime, he would see in it an argument that there may be some advantages to competition.
I raise a point of order, Mr Speaker. The Prime Minister has invited me to read a paper. I therefore invite him to table it so that I can.
Mr SPEAKERI take it that it is an official—[ Interruption] A point of order was raised and it will be dealt with in silence, I say to both front benches. I take it that it is an official document from Treasury; it therefore must be tabled—that is, if the Prime Minister was quoting from it.
Will workers and employers be paying higher levies, or facing cutbacks in accident compensation coverage, or both, to fund the hundreds of millions of dollars of profits that the Australian insurance companies will be making if he introduces the scheme that National introduced last time? Maybe Bill English will give him the answer.
I am not going to get into hypothetical situations; let us talk about the real world. In the real world New Zealanders are being asked to pay much higher levies because of the mismanagement of the previous Labour Government.
Will the form of privatisation that the Prime Minister is advocating benefit New Zealand and Kiwi workers, when the in-depth report by PricewaterhouseCoopers estimates that it will raise administrative costs by 10 percent, which will mean a lower proportion of levies actually going into coverage, into prevention, and into rehabilitation; how could that possibly help?
I seek leave to table the PricewaterhouseCoopers inquiry—some 477 pages, I think—which will give the Prime Minister the answers I have talked about that—
Sue BradfordHas he discussed with the Māori Party the potential impact of full or partial re-privatisation of the work account on Māori, especially given that tangata whenua are disproportionately represented among low-paid and vulnerable workers; if so, does he think that their support for the Government’s accident compensation changes will continue?
I am not sure whether their support will continue. I guess it will depend on what the final shape of the bill looks like after it has been through a select committee process. In terms of discussions, I have had very, very brief discussions with Māori Party members at our annual monthly meeting. They indicated some interest in looking at that area, and we supported them in that interest.
Does the Prime Minister agree with the statement made by Tariana Turia on Sunday’s Q+ A programme that “costs in ACC will go up exorbitantly” if the work account is privatised, and has she explained to him why, having taken such a strong stand 3 days ago, she suddenly flip-flopped on that issue?
I would agree with her if the work account were privatised, but introducing competition is a vastly different issue.
How does the Prime Minister reconcile his statement that National has looked at privatising the work account, or “making it available for competition” as he prefers to put it, in some detail, and is now actively considering it, when Nick Smith assured the House a week ago that his stocktake would not include investigating competition in the work account; and why has National’s handling of this issue been such a shambles?