﻿Mr SPEAKER: Question No 5, Sarah Dowie.
SARAH DOWIE (National—Invercargill)
to the Minister for ACC: What indicative reductions
to ACC levies are signalled in Budget 2015?
Hon NIKKI KAYE (Minister for ACC):
Budget 2015 will signal that ACC is on track to provide
further levy cuts of around $375 million in 2016-17
and $120 million in 2017-18. These indicative levy cuts
represent a total saving for NZers of around $500 million
and will be spread across the motor vehicle, work,
and earners accounts. The indicative reductions,
if confirmed, will take total levy cuts since 2012
to around $2 billion, benefiting all NZers.
These cuts are possible only because of good
financial management. This is great news for NZers.
[MEMBERS INTERJECT]
Sarah Dowie: What factors could see these indicative
levy reductions change?
Hon NIKKI KAYE: Although there could be some change
to the total amount into the per year amounts,
the Government is committed to reductions of at least
$500 million across the three accounts. Before the Government
makes final decisions on levy reductions this year,
ACC will consult under existing legislation with levy payers
and make a recommendation.
The final decision will take into account other factors
like claim numbers and discount rates. It is important to understand
that the exact amounts for each year may vary
depending on the consultation. However, I can confirm reductions
of at least $500 million—and that is $2 billion since 2012.
Sarah Dowie: What recent announcements has the Government made about improving
the transparency of the levy-setting process?
Hon NIKKI KAYE: Last week I introduced the Accident Compensation
(Financial Responsibility and Transparency) Amendment Bill
to the House. The bill will make a number of amendments to the Act
to improve the levy-setting framework. The bill will also
amend the Act to allow the collection of residual levies
to be discontinued earlier. New principles will be introduced
into the legislation to ensure greater levy stability and solvency
over the long term. The Government will be required to publish
a funding policy and the long-term implications of levy decisions.
This will ensure there is maximum transparency around ensuring
enough money is available to pay the lifetime cost
of people’s injuries. It is also my hope that levy payers can see
levies are as low as possible while ensuring our most vulnerable
have greater security for the long term.
Sarah Dowie: What reports has she seen on alternative approaches
to setting ACC levies?
Hon NIKKI KAYE: I have seen a report about people suggesting
going back to a pay-as-you-go approach. The advice I have had
is that this would lead to higher costs for claims
and increasing levy rates over the long term. It would also
be a big step backwards for some of our most vulnerable NZers
whose quality of life depends on long-term rehabilitation.
It would also mean less certainty and stability for NZ businesses.
These reports come from Andrew Little at the same time that Labour
has removed its ACC policy from its website. He needs to front up
to NZ and actually tell people whether Labour’s plan
is to raid the ACC coffers.
Sue Moroney: Why will she not cut levies immediately,
as recommended by the Ministry of Business, Innovation and Employment,
by Treasury, and by ACC itself; and what possible excuse does she have
for overcharging ACC levies now that the Government will not even
get to its promised surplus?
Hon NIKKI KAYE: We are cutting ACC levies now. There is $480 million
worth of cuts this year. There are several reasons why we have put
a 2-year, $500 million policy in. The first reason is that there
is still volatility in the accounts. The second reason that—[Interruption]
You need to listen to this, Labour members. If you go down too far
in terms of levy reductions, the overall levy path over the years
means that you can have increases in the out-years. The members
are going to have to understand this. The facts are: $2 billion
since 2012 compared with a $480 million hole under members
on that side of the House.
Mr SPEAKER: Question No 6.
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