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Katene: ACC Amendment Bill

Injury Prevention, Rehabilitation, and Compensation Amendment Bill
Tuesday 27 October 2009
Rahui Katene, MP for Te Tai Tonga

When Sir Owen Woodhouse presented the results of the 1967 Royal Commission into Workers’ Compensation, he summed it up by concluding that to address injury arising from accident, what was needed was an attack on three fronts; and I quote:

“The most important is obviously prevention. Next in importance is the obligation to rehabilitate the injured. Thirdly, there is the duty to compensate them for their losses”.

They were simple goals, arising out of an admirable commitment to principles such as community responsibility, comprehensive entitlement, complete rehabilitation, meaningful compensation and administrative efficiency.

The important challenge before Parliament now, some four decades and more later, is to assess whether these goals are still relevant; whether they have been achieved; and how successful the scheme has been in following them.

Seven years after the Woodhouse report, the Government of the day created the Accident Compensation Corporation; introducing what would later be described as a revolutionary model for cost-effective rehabilitation and compensation.

The essence of the exchange negotiated by the state was that in return for giving up the right to sue, all New Zealanders had the right to a new, universal, 24 hour no-fault coverage against injury; with the associated rehabilitation and compensation.

For the last 35 years then, New Zealanders have been contributing to injury accounts which cover, variously, employers; the self-employed; earners; non-earners; motor-vehicle and medical misadventure.

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Part of the process of change introduced with this Bill is the proposed increase to three of the levies – the work levy rate, the earners’ levy rate and the motor vehicle levy rate.

The justification is apparently due to an increase in the number of claims; and rising health costs.

Yet there seems to be some conflicting information which would throw question into why these levy changes need to occur. The recent ACC annual report suggests that claims have stabilised – in fact there was a seven percent decrease in the last financial year.

The annual report also points out the progress in the rehabilitation of workers The goal was to have 88.5% rehab rate nine months after injury, and the achieved rate was 87.5%. Well one percentage point seems hardly worth making a fuss about.

So why would we want to review a scheme lauded as a world leader based on a one percent difference? What could the rationale for an ACC Reform Bill be?

Well, there is one major issue which the Maori Party has raised before in this House, consistently throughout the term of the former Government and the current, which would demand reform – and that is the significant difference in the rate at which Mäori and the general population claim for ACC services.

This difference appears to be most marked for non-earners, the young and the elderly – arguably the most vulnerable New Zealanders.

What is even more inexplicable in the difference in rates, is that Maori are over-represented in injury statistics across all ages and in all areas. In fact, injury is the leading cause of death for Maori aged 30 and under. Most of these are preventable.

Statistics NZ March 2008 report revealed that Maori have significantly higher injury rates by occupation, 155 injuries per 1000 full time equivalent workers compared with 111 for Pakeha – and particularly in occupations such as agriculture, fisheries, manufacturing and trades.

There are also significantly more injuries in lower paid occupations, where Maori are over-represented.

Meanwhile, ACC figures continue to show that Maori make less claims to ACC and are less likely to receive compensation entitlements.

ACC has tried to do something about this by establishing formal channels such as the Maori Advisory Group, Te Roopu Manawa Mai, to exchange valuable ideas and information.

They also introduced the Code of ACC Claimants' Rights. This code contains eight rights encouraging positive relationships between claimants and ACC as they work together for the claimant's recovery.

While ACC undertook initiatives to improve access through information programmes and better engagement with Maori communities, these programmes have not demonstrated significant success to close the delivery gap.

Access for Maori has been consistently lower than for other groups. The data available demonstrates that Maori receive treatment at a lower level to non-Maori, and where services were accessed they were accessed later and they exited programmes earlier. A similar record applies in the area of injury prevention.

If there are any amendments to be made to the Injury Prevention, Rehabilitation, and Compensation Act 2001 to reduce levies and Crown costs, one would therefore think that the broader question of eligibility to ACC support would be high on the change agenda.

The absence of data around the business significance of Maori claimants could be something the Corporation addresses as a priority for moving forward. Such analysis might estimate, for example if we were to plan for any given level of improvement in access for Maori, what the impact might be on ACC’s bottom line.

What we know, intuitively, before we even begin this exercise is that because Maori are a small population group and constitute a small group of claimants, it is unlikely that Maori will be considered a high value market segment to provide a financial incentive for private insurers to develop Maori responsive business strategies, such as use of rongoa Maori or mirimiri treatments in the context of a rehabilitation regime.

And yet the Minister for ACC, Nick Smith, promoted the context for the changes outlined in this Bill to return to a position where ACC is both, “affordable and fair”.

Being affordable and fair sets up a spectrum ranging from institutional racism at one end and cultural competency at another.

Under the Bill, Maori in high risk occupations will pay higher levies. High risk occupational areas have significant Maori workers, and the Bill provides for a matching of risk environments and levy rates, so the cost of cover can be expected to increase.

Across the board a possible result will be employers structuring employment relations to shift responsibility for risk to employees along the lines of the independent contractor model. There is reason to expect this would eventually apply across the board.

Preliminary analysis of the changes reveals also that it will disproportionately impact on vulnerable workers and low-income families as the Bill decreases access to cover and decreases the level of compensation to these claimants.

At the other end of the spectrum is a scenario in which ACC values cultural competence.

Professor Mason Durie describes cultural competence as being “about the acquisition of skills to achieve a better understanding of members of other cultures”.

Culturally competent care involves practitioners establishing and maintaining positive relationships, through improving their understanding of tikanga Maori and effective communication. The end goal of course is to achieve better health care outcomes for Maori.

Cultural competence is a major focus for the Maori Party. We campaigned on it; we have consistently spoken of it across the health and social sectors, and this Bill is no different.

But there is another dimension to our decision to vote this Bill through to Select Committee to let the people have a say on ACC.

And that is the potential for Maori entrepreneurship and enterprise to rise to the opportunity for innovation.

In 2007, ACC undertook a risk profile review with groups within the Ngai Tahu umbrella and a considerable annual levy reduction resulted. The Federation of Maori Authorities has also been interested in pursuing dialogue around levy rates and the possibility of a Maori consortium leading a corporate arrangement with ACC possibly focusing initially on specific industry sectors such as forestry, fishing, construction, farming.

For all these reasons, and no doubt more that will arise from the submissions, we agreed to support the introduction of the Bill and its referral to a Select Committee, so the people can express their views.

We want to hear about people's experience with the scheme - workers and their whanau who have suffered an injury, health workers and providers of rehabilitation services, among others.

And we do this, in order that ACC can once again be a world leader, be affordable, fair and culturally competent, and remembering always to focus on the best interests of the community.


ENDS

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