Kiwiblog

Judith Collins has announced:

ACC Minister Judith Collins today announced that Ms Paula Rebstock will be Acting Chair on the ACC Board until a new Board Chair is appointed.

To complete the financial year for ACC it has been agreed that Mr Judge will remain as Chair until 30 June 2012.

Mr Judge takes up the role of Chair of the ANZ National Bank on 23 June 2012.

Ms Collins says Mr Judge’s new role is a significant appointment and will require even more of his time than his current role as a director.

“I would like to thank Mr Judge for the contribution he has made during his time as Chair of the Board.

“I particularly acknowledge the role he has played in returning ACC to financial health.

“I believe privacy and information security is now the number one priority for ACC and it must refocus on rebuilding public trust and confidence.”

It is obvious that the Chair’s resignation is not just about his new job as Chair of ANZ National Bank. It is good to see the Minister not accepting the status quo as acceptable. And to be fair to John Judge, he did play a major role in restoring ACC to financial health.

ACC has a tough job at the best of times. There definitely are a number of people who try tot rort the system. We’ve seen some of them prosecuted in the courts, and their numbers are not insignificant. As an employer who pays many thousands in ACC levies, I do want ACC to be vigilant and not a soft touch.

However that doesn’t mean treating every long-term claimant as a rorter or faker, and especially not interfering with independent medical assessments, and also not using language such as we saw on 60 minutes. It is obvious there are parts of ACC that has a culture problem, and they also have serious privacy issues.

The focus on rebuilding public trust and confidence is the right one.

Did you watch 60 minutes last night? What were your impressions?

The Herald further reports:

The Accident Compensation Corporation maintains “a threat had been made” by former National Party insider Bronwyn Pullar at December meeting at which a massive privacy breach was discussed.

Police this morning confirmed they would not press charges against Ms Pullar in relation to the meeting where ACC managers claim Ms Pullar threatened to go to the media about the privacy breach unless she was given a two year guaranteed benefit.

“After careful consideration of the evidence now available and a separate legal review of the facts we have determined that no offence has been disclosed,” Police Assistant Commissioner Malcolm Burgess said in a statement. …

An ACC report on the meeting found Ms Pullar “proposed in relation to her own individual case she would like to negotiate a guaranteed benefit payment for two years”.

“She made threats that if her demands weren’t met, she would not return the information and would inform the media.”

ACC Chairman John Judge this afternoon said he was completely satisfied the report was a “complete and accurate” account of what took place at the meeting.

“Our staff at the meeting considered that a threat had been made… They felt pressure.”

ACC chief executive Ralph Stewart said the corporation had “zero tolerance of wrongdoing and we felt obliged to seek an independent opinion to confirm whether there was wrong-doing that was sufficiently serious for Police to lay charges”.

“Should ACC be confronted with a similar situation the same action will be taken,” he said.

I find this situation deeply suspicious, and think the Minister should start looking for new board members. Here’s some questions I have:

1. If ACC felt there was blackmail at the December 2011 meeting, why did they wait until March 2012 to complain to the Police? Surely they should have rushed down there the next day, rather than three and a half months later.
2. Why did they only complain to the Police, after media stories of their privacy breach was made public? If the complaint was not made to discredit the complainant, why was the complaint made just days after the media story?
3. Why did ACC make public their Police complaint? Have they ever publicised any other complaint to the Police?
4. Does ACC consider a disgruntled complainant who threatens them with bad publicity is breaking the law in doing so? If so, then do they consider it against the law to criticise ACC publicly?
5. Can ACC reconcile the report from their managers about the meeting, with the tape recording made of the meeting?
6. Can ACC point to what part of the transcript of the meeting constitutes blackmail as they alleged?
7. Considering the Police have stated that “no offence has been disclosed”, do they not accept they were wrong to complain to the Police?
8. Did ACC  seek any independent legal advice before deciding to lay a complaint with the Police? If not, why not?
9. Does ACC condone the use of complaints to the Police in future, if a customer “pressures” staff?
10. Once again, why did they wait three and a half months to complain to the Police, and only after negative media stories emerged on their privacy breach?

If I was on the ACC Board I would be demanding management answer these questions.

Adam Bennett at NZ Herald reports:

Police will not press charges against Bronwyn Pullar, the former National Party insider at the centre of a massive privacy breach at ACC, the Herald understands.

If this is correct, then I think it will raise issues around whether the complaint to the Police was in good faith, or an attempt to punish a persistent critic of ACC. I personally won’t jump to conclusions until at a minimum the Police give details behind their decision, and preferably the full file is released publicly.

The headline:

Key questions Pullar ACC recording

The lead para:

A recording of a meeting between ACC management and whistle-blower Bronwyn Pullar that reportedly clears Ms Pullar of threatening the corporation has been questioned by Prime Minister John Key.

Further down:

Speaking to TVNZ’s Breakfast today, Mr Key raised questions about the recording.

“Yes there appears to be a difference of opinion although, as we know with recordings, that it might not be the entire recording,” he said.

“I’m not saying it is or it isn’t, I simply don’t know, but the important point there is that there are three investigations going on … and I’m sure they’ll look at all of the information that’s there.”

I have to say I take that not as “questioning” the recording, but just stating the obvious – relying on media reports based on recordings is not the same as a first hand inspection – as the Police and Privacy Commissioner will do.

Phil Kitchin at Stuff reports:

A recording of a critical meeting between senior ACC managers and the whistleblower who exposed a massive privacy breach reveals the corporation misled its minister and the public.

The corporation has alleged that client Bronwyn Pullar threatened at the meeting to go to the media unless she was given a guaranteed two-year benefit.

It also alleged she said that she would withhold details of the breach involving private details of 6500 other clients – including sexual abuse victims – if her demands were not met.

Once details of the privacy breach were revealed by The Dominion Post, the ACC referred its extortion allegations against Ms Pullar to police.

However, a recording of a key meeting in December between Ms Pullar, her support person Michelle Boag – a senior National Party figure – and two ACC managers is at odds with the corporation’s claims that were included in a report ordered by ACC Minister Judith Collins.

The ACC was given a transcript of the meeting more than three weeks ago, but has refused to correct its report.

Ms Pullar said it was outrageous that, having been provided with the recording, the corporation was refusing to correct a “blatant lie” on a public report. …

The Dominion Post has heard the recording and had obtained an accurate transcript of it. It contradicts several key elements in the ACC report.

The transcript shows:

Neither Ms Pullar nor Ms Boag threatened to go to the media or withhold the data if Ms Pullar was not given a guaranteed two years’ compensation.

ACC’s statement that it was not given specific details of the breach is misleading. ACC was told the data was “highly sensitive information”, including names and details of 6500 claimants.

If ACC have filed a complaint with the Police based on incorrect information, then this is a serious matter.

But Ms Pullar said that the allegation was a misuse of power and “an attempt to smear Michelle Boag’s and my reputation”.

“Had I not recorded this meeting, it would have been ACC’s word against mine.”

Media lawyer Steven Price said the tape was recorded legitimately because Ms Pullar was a party to the conversation at the meeting.

Parties to a conversation cannot be guilty of illegally recording a conversation using an interception device.

I look forward to the completion of the various reports and inquiries so we the public get a better understanding of what actually has happened.

Stuff reports:

ACC Minister Judith Collins has promised to quit if she or her office is found to have leaked an email at the centre of a spat over an ACC claimant as the auditor-general launches an investigation into governance at the state insurer.

So will Mallard and Little resign if their allegations it was Collins are found to be untrue?

Mr Little, along with Green MP Kevin Hague, earlier asked Auditor-General Lyn Provost to look into aspects of ACC’s governance that would not be examined by the investigations already under way by the privacy commissioner and being considered by the police.

Ms Provost said yesterday she would hold an inquiry examining aspects of ACC’s governance.

“The inquiry will examine how ACC manages a range of risks at the board level of the organisation. It will also examine how any matters relating to ACC claimant Ms Pullar that came to the attention of the board or individual board members were dealt with,” she said.

As well as this inquiry, Ms Provost intended to develop an audit proposal on ACC’s general operations, with a focus on its case management.

I’m pleased the Auditor-General is investigating.

Adam Bennett at NZ Herald reports:

Prime Minister John Key was last night dragged into the widening ACC scandal and forced to deny a report he was part of a group of senior National Party figures who backed Bronwyn Pullar’s bid for a $14 million insurance payout. …

TVNZ current affairs programme Close Up last night said it had received a letter written by Sovereign Insurance to former National Party president Michelle Boag in 2007.

The letter named 28 people, among them prominent National Party figures including John Key and former Prime Minister Dame Jenny Shipley, as supporters of Ms Pullar as she sought a $14 million payout from the company in relation to injuries she suffered in a 2002 cycling accident.

The claim, Sovereign said in the letter, was “greatly in excess of her entitlement”.

Ms Boag is a long-standing friend of Ms Pullar who supported her during her battle with ACC, including attending a December meeting with ACC which has sparked investigations by the police and the Privacy Commissioner.

In the letter, Sovereign noted, it had been given a list of members of Ms Pullar’s “claimed support/advisory team”.

The list included Sir Selwyn Cushing, Mr Key, Dame Jenny and Dr Wayne Mapp.

Mr Key was at the time the Leader of the Opposition.

He has said he met Ms Pullar when he first entered politics – which was shortly after her accident – but had not had any contact with her since he became National Party leader.

Last night, he issued a statement saying: “I have not been involved in any ‘claims support’ or ‘advisory team’ for Bronwyn Pullar.

“The claim in the letter that I was part of such a team in 2007, or indeed any other time, is wrong.”

I have no doubt that John Key was in no way part of any support group or advisory team. I can only assume that any high profile person who expressed sympathy for Bronwyn’s position, was claimed to be a member of said support group.

It is worth noting that this is a letter from Sovereign, not to Sovereign. Also Sovereign did not say exactly who gave them “the list”. The most benign explanation is that these names were mentioned at a meeting, and Sovereign mis-interpreted their status. A less benign explanation is that this was a seriously bad case of trying to big-note it, and worse not just big-noting it but getting it wrong. Claiming the support of the then Leader of the Opposition when he has done no such thing, is incredibly poor judgement to say the least.

Meanwhile, it was reported that when Ms Pullar emailed Dr Smith’s letter to ACC in support of her claim last year, she did so using software enabling her to track each time it was opened and who it was forwarded to without the knowledge of the email’s recipients.

Internet security expert Peter Gutman, of Auckland University, said such “web bugs” were uncommon.

“Spammers use it on a massive scale, and beyond that it’s used only by security geeks.”

This is is an interesting aspect. My comments are based on the media report, and one can not be conclusive without knowing exactly what software was used, and how it works.

I’m not a lawyer but am fairly familiar with S252 of the Crimes Act as InternetNZ lobbied for it to be passed. It says:

Every one is liable to imprisonment for a term not exceeding 2 years who intentionally accesses, directly or indirectly, any computer system without authorisation, knowing that he or she is not authorised to access that computer system, or being reckless as to whether or not he or she is authorised to access that computer system.

Depending on the software it is arguable that use of such tracking software could be an offence. Of course Outlook also has features where you can get read receipts for your e-mails. But Outlook asks the recipient do they wish to allow a read receipt to be sent.

If receipts of some sort are being forwarded from ACC’s computer system, without their authorisation, that is arguably a form of access. I’m not saying any offence has been committed. I’m saying that depending on the software used, there could be an arguable case.

John Hartevelt at Stuff reports:

ACC Minister Judith Collins is taking defamation action against two labour MPs and a news organisation, her spokeswoman says.

I understand the MPs are Trevor Mallard and Andrew Little, and the media organisation is Radio New Zealand.

It will be fascinating if it proceeds, to see the proof Trevor and Andrew have to back up their assertions.

Labour are saying that Nick Smith may have intervened on behalf of other friends, and that there needs to be an inquiry to determine this. Personally I thought his letter on behalf of Pullar made it pretty clear how reluctant he was to do anything. But it has also dawned on me that the fact he actually wrote a letter actually strongly implies that he was not trying to improperly influence things for Pullar. Why? Well, because he did in fact put it in writing.

If Nick had really been trying to screw the scrum for Pullar, the last thing he would have done is sign his name to a letter acting as a referee for her health before her accident.

If a Minister wants to push a department or agency in a particular way, they do not leave fingerprints. This will be officially denied, but ask any former Ministerial staffer from either party.

If Nick had really wanted to get ACC to give Pullar special treatment, he would have had his minsierial advisor phone the CEO. The ministerial advisor would say something like “The Minister is very concerned about this case”. That is code for “fix it”. They might say stuff like “The Minister is concerned that this could become a high profile story” and “The Minister wants to protect the PM who is constantly getting lobbied on this issue” or “The Minister thinks it would be prudent to assure yourself that the claimant has got everything they are entitled to, and has not been disadvantaged by ACC’s actions”.

Now none of this changes the fact that Nick’s actions in writing the reference were not acceptable. But in terms of motivation, I do think that they do show his intention wasn’t to apply improper pressure on ACC.  He was trying to placate Pullar. Otherwise he could have just got one of his staff to make a discrete phone call.

And no, I am not saying that agencies will break the law or even their own policies just to please a Minister. However many decisions are subjective and can go either way. It is in those situations, that Ministerial desires can have an impact.

The Dom Post has published the list of grievances that Bronwyn Pullar has against ACC. They are:

1. Repeated non disclosure of correspondence regarding Bronwyn’s claim when requested.
2. Extensive disclosure of other claimant’s information to Bronwyn
3. No ability to restrict unauthorised access by 2500+ ACC staff and contractors to files, or medical files
4. Medical records (considered in law to be the most sensitive of personal information) are not given protection which is appropriate to their status and are treated as general documents.
5. Lack of procedure around dealing with statements of correction to incorrect reports
6. Threats of legal action against Bronwyn’s GP for refusing to disclosure non-injury information. Misuse of criminal provisions in ACC legislation.
7. Collection of information for an unlawful purpose
8. False written and oral statements by ACC staff with the purpose of unlawfully procuring medical reports for pecuniary purposes.
9. Defamatory statements by ACC employees
10. Exceeding lawful powers by investigating injuries for which no claim has been made.
11. Derogatory emails by ACC staff
12. Excessive Access to Bronwyn’s files – 1948 accesses within 3 ½ years, by about 150 different individuals, of which 1100 were in a single one year period.
13. Staff accessing files against management instructions
14. ACC167 Consent – used to coerce claimant’s into authorising otherwise unlawful collections of information.
15. Collection of personal information without claimant’s knowledge &/or attempted collection without knowledge
16. Collection and attempts to collect information unrelated to injury/claim
17. Imbalanced and biased decision making by Corporation
18. Covert/inappropriate communication to assessors which bias & negatively influence outcomes against claimants
19. Decision making without reviewing EOS
20. Lack of workability of electronic medical file for lawfully compliant decision making
21. Coercion, Harassment & Bullying, Unreasonable approach in management of claims. Use of threats of disentitlement to coerce
22. Dictatorial approach of Case Managers, failure to make reasonable accommodations for claimant needs.
23. “cherry picking” of unfavourable phrases from medical reports which contradict the ultimate conclusion.
24. ACC abusing its monopoly position by limiting the pool of qualified medical assessors to a select group (some individuals assessors are paid up in excess of $1 million annually for services), leading to the appearance of bias and unfair market practises.
25. Failure to demand adherence of staff to State Services Code of Conduct and to take appropriate action for  breach
26. Failure of Office of Complaints Investigator to independently investigate complaints
27. Failure of Office of Complaints Investigator to follow a reasonable process when conducting investigations
28. Failure of Office of Complaints Investigator to validate the responses provided by ACC with the claimant for accuracy
29. ACC’s case management approach to Bronwyn is disruptive and destructive of her ability to rehabilitate/work part-time
30. ACC staff deliberately lying and writing false reports
31. ACC staff making clinical decisions without appropriate qualification
32. ACC staff making clinical assessments without medical competency
33. Deliberate interference in independent medical assessments
34. Prejudicial correspondence with independent assessors prior to assessments communicating ACC’s desired outcome – that injuries are spent &/or due to non-injury causes
35. Provision of unqualified, non-specialist opinions, by ACC internal medical advisors, contradicting existing specialist advice, prejudicing independent assessors and compromising their independence
36. Branches/Units having Case Managers who made an initial decision then conduct an administrative review of a matter before being sent to DRSL for review
37. Taking advantage of disabled claimants for actuarial/financial gain
38. Poor decision making which adds cost to the Corporation
39. Poor OCI processes which adds cost to the Corporation
40. Lack of flexibility over assessments/appointments/referrals
41. Lack of reasonable consultation and flexibility over assessments/ appointments/referrals
42. Unreasonable referrals/assessments  processes which are exploitative e.g., chaperones, multi-party assessments, lack of privacy & dignity;
43. Focus on avoiding liability at the expense of effective early rehabilitation
44. ‘Silo’ culture where case managers are unaware of ACC’s own research into rehabilitation best practice
45. Constant churn of case managers – each new case manager is unaware of the medical evidence on file leading to poor decision making and is unaware of claimant’s issues; Avoidance strategy for accountability of actions.

In a related story, the Dom Post notes:

ACC’S computer storage of its clients’ confidential medical records is “so primitive” the records can be viewed by virtually every employee from a mailroom assistant up.

The corporation relies on reminding its staff they should not look at files they are not supposed to view on its EOS claims management system as one way of protecting privacy.

It seems they can not prevent access to confidential medical records.

Nick Smith has just announced to the House he has resigned as a Minister of the Crown, and John Key has accepted his resignation.

A sad end to his ministerial career.  It’s a stark reminder that Ministers must be like Caesar’s wife – above suspicion, in matters of personal advocacy – especially in your own portfolio area.

Nick has a very solid record of achievement as a Minister in the 4th and 5th National Governments. He should be proud of his achievements in diverse areas. He will be missed as a Minister by his colleagues.

I blogged yesterday:

As Nick has now conceded it was an error of judgement. You can quibble over the fact the letter was to independent medical assessors, not ACC. But the reality is Nick should have declined to write the letter at all, just as he had also declined to intervene with ACC. There were many other people who could write a letter about how Bronwyn was before her accident.

Doing the letter on parliamentary letterhead compounded the failure of judgement.

I also blogged:

While a failure of judgement, I was pleased to see a journalist tweet that David Shearer had declined to say he thinks the lapse in judgement was serious enough to warrant resignation.

Since then Shearer has changed his stance. Patrick Gower blogs on it, saying Shearer had a shocker.

I also blogged:

 I’m not actually against a fuller independent inquiry, because while I do not think anyone has acted with malign motives, the perception is that it is very murky and sunlight is the best disinfectant. However it might be that the Privacy Commissioner inquiry will be wide enough.

I am now of the view that an independent inquiry, at a minimum, is necessary. The Privacy Commissioner can only cover the privacy issues around the data breach, and can not cover the wider issues. The speculation on the nature of the friendship does raise issues that need to be dealt with.

If the terms of reference were wide enough, it could in fact cover the entire history Pullar has with ACC (something she wants). Not often I quote Bomber Bradbury, but I think he is correct when he says:

Even National Party activists deserve to be treated with dignity and watching ACC throw Bronwyn to the Police over a faked allegation that she threatened to expose ACC negligence in return for compensation boils my blood. I say faked because the doyenne of the right, MFB (Michelle Fucking Boag) was in that meeting. Say what you will of ‘chelle, but she ain’t stupid enough to rock up to ACC in the capacity of a support person and threaten them with a bribery option. …

 through their own negligence they release confidential papers and when called on it, bully and intimidate a woman who has an existing complaint against them. 

This doesn’t change my view that Pullar shout not have retained the data, but it doesn’t mean ACC have behaved correctly either.

A full independent inquiry could cover:

• Consideration of Pullar’s grievances against ACC
• How the data breach to her occurred, and how it can be prevented in future
• Pullar’s actions with the data, and what happened at the meetings held with ACC
• Smith’s interactions with Pullar over her grievances
• Anything else the QC deems relevant

This may not be an attractive option to the Government. Personally I am of the view that Nick’s ill judgement was motivated by compassion, and there are no malign motivations involved. However others will suggest different motives, and for that reason I don’t think the issue will go away, unless there is a full inquiry, or some other form of accountability.

UPDATE: Cactus Kate has an interesting blog post on the issue. She picked Bronwyn up from the hospital after her accident, so speaks from some first hand knowledge.

I’d not yet blogged on the ACC saga as there were not enough facts out there to form conclusions on. I also have been wary as I know reasonably well several of the people involved – Bronwyn Pullar, Michelle Boag and Nick Smith.

Like  many in National I knew Bronwyn before her head injury nine years ago. Head injuries can leave people massively affected, and this has been the case for Bronwyn.  My mother practised as a neuropsychologist and was involved in the Head Injury Society, so through her I have gained a reasonable lay understanding of head injuries, and especially how many people never fully recover from them.

It is precisely for injuries like Bronwyn suffered that we have ACC. Now Bronwyn has felt for some years that she had been badly treated by ACC, and also her private insurers off memory. Her battles with them have to some degree become quite consuming for her. I don’t know the details of all the issues, but I will say that from what I do know I think Bronwyn has had some legitimate grievances. That doesn’t mean all the grievances are legitimate – I am not in a position to judge that.

Having set out that background, I do believe Bronwyn made an error of judgement when she was accidentially e-mailed an ACC spreadsheet which included some client details. The correct thing to do would be to immediately notify ACC, and delete the file. It would be fine to perhaps record down a few details from them as proof the data breach occurred, and complain to the Privacy Commissioner. But retaining the data was unwise.

The fact that there is a dispute over who was laying down conditions over its return, reinforces to me that deleting or returning the data was what should have happened.

There has been some focus on the role of Michelle Boag. Yes Michelle is a former National Party President, but that was a decade ago. For much longer than that she has been Bronwyn’s friend. I do not accept that a former party president can not be a support person to someone dealing with a government agency.

It is entirely natural, and in fact advisable, that someone with a head injury has a support person along.

Then we have the letter from Nick Smith, which the Herald has online here. As Nick has now conceded it was an error of judgement. You can quibble over the fact the letter was to independent medical assessors, not ACC. But the reality is Nick should have declined to write the letter at all, just as he had also declined to intervene with ACC. There were many other people who could write a letter about how Bronwyn was before her accident.

Doing the letter on parliamentary letterhead compounded the failure of judgement.

While a failure of judgement, I was pleased to see a journalist tweet that David Shearer had declined to say he thinks the lapse in judgement was serious enough to warrant resignation. It isn’t, and it is good to see Shearer not trying to beat this up, beyond the rightful criticism that is due. If there was some suggestion of self-gain, then it would be a different matter.

The Privacy Commissioner is going to investigate this issue, and she is independent. It remains to be seen how wide her terms of reference will be. I’m not actually against a fuller independent inquiry, because while I do not think anyone has acted with malign motives, the perception is that it is very murky and sunlight is the best disinfectant. However it might be that the Privacy Commissioner inquiry will be wide enough.

Matt Stewart at Stuff reports:

He battled for seven years to win compensation – and now a Paraparaumu man has admitted he also spent seven years cheating the state insurer of nearly $86,000.

Simon John Kruidenier, 58, pleaded guilty in Porirua District Court last month to claiming seven years’ worth of weekly compensation payments from ACC while he continued to work as a repossession agent for 11 finance companies.

Kruidenier began receiving compensation in September 2005, paid on the basis that he was unfit to work because of occupational neurotoxicity – a result of his former job as a printer’s assistant.

He said he had developed bad headaches and migraines after working for three years at Porirua plastics and packaging manufacturer Cryovac.

He lodged a complaint with ACC in 1998 – and payments were event-ually backdated to that year – but he failed to tell ACC that he had started working again in 2002.

He kept working while claiming compensation until October 2009, receiving $85,878.99.

So he spent seven years battling to get ACC, and won his case, getting it backdated. And he was a fraud, as he was in fact not just capable of work – but actually working.

In 2005 he told The Dominion Post he had been assessed by six doctors and had been round and round the system since lodging the claim in 1998.

“I have been prodded and poked. They keep contradicting each other – one says yes, the other says no.”

Kruidenier said at the time that his condition was “a hell of a thing to live with”.

He could not work because his health was so unreliable that even petrol fumes or perfume triggered migraines.

“I think ACC is going to be bloody-minded about it. But I can’t quit now.”

So he actually went to the media, trying to build public sympathy for his right to steal money off us.

Brian Fallow writes in the Herald:

ACC has reintroduced experience rating to the calculation of levies for employers and the self-employed.

ACC Minister Nick Smith says it will make ACC levies fairer and provide better incentives for business to improve workplace safety.

The Council of Trade Unions, Labour and the Greens argue that it will encourage employers to pressure workers to lie about whether an accident occurred in the workplace or somewhere else.

I really wonder why the professional politicians of the left hate business so much. They smear and defame basically the entire business community with their claims that employers are criminals who will break the law in return for a small cash incentive. They do the same with their opposition to allowing employees to choose whether or not to trade in one week of leave for cash. They claim employers will break the law and coerce employees into taking the money instead of the leave.

Experience rating ACC premiums provides an incentive to employers. For “good” employers the incentive is to have a safer workplace, to reduce their ACC premiums. For “bad” employers the incentive is not to make their workplace safer but to break the law and “bully” staff into lying about where their accidents happened.

Now if one had to divide all employers into one of those two categories, how many would actually break the law and bully their staff into lying? 5% perhaps, if even that? Yet Labour and the unions want all employers punished and treated as if they are all criminals.

For smaller firms – with an annual ACC bill below $10,000 – there will be a no-claims discount of 10 per cent if they generate no compensation claims. If they generate more than 70 days’ compensation claims they will incur a 10 per cent loading on their levies. For those in between there is no change.

The vast majority of employers will have ACC bills of below $10,000 – this is a wage bill of under around $5 million.

Your ACC premium is around 2% of your wage bill. A 10% reduction means that a company will save 0.2% of its wage bill, if it gets the no claim bonus. Does Labour really think scores of businesses will break the law just to save $2 on every $1,000 of wages.

For firms with an ACC bill larger than $10,000 the system is more complex and could mean adjustments of up to 50 per cent, up or down, in their levies. There are two layers to the adjustment.

The more important, the experience rating modification, compares the firm’s performance with the other firms in its levy risk group, with a 75 per cent weighting for rehabilitation costs, including income compensation, and 25 per cent for medical costs.

That could result in adjustments of up to 35 per cent either way in a firm’s levies, depending on their relative performance.

Now consider you are a larger employer, and you have ACC experience rating. Here the incentives are larger to keep claims down. However it would be near impossible to “fiddle” the system with a larger number of employees making claims.

In a small business, it is conceivable that you might get one employee to claim an accidient happened outside the workplace, and get away with it.

But in a large workplace, you’d need to have many injured employees agreeing to break the law and file false details on their claim (remember the employee files, not the employer). And it takes just one employee to blow the whistle and say their employer asked them to lie.

Also the employer needs to have a corrupt safety officer on staff, who will falsify the accident log, and not record workplace accidents if the employees agrees to lie about where it happened.

Now sure there may be a handful of venal and corrupt employers who will risk criminal penalties by engaging their staff in a conspiracy to defraud ACC. But that is no reason to not provide incentives to the vast majority of employers, which rewards them for having safer workplaces.

The average employer reacts rationally to incentives. Oh if we have fewer accidents, we pay less to ACC. So what can we do to minimise accidents. Labour and the unions are defneding a system where an employer with no workplace accidents at all pays the same premium as a company (same size and industry) that has multiple workplace accidents.

Yay – some very good announcements from Nick Smith:

Key decisions announced today include:

• No increase in workplace, motor vehicle or earner levies for 2011
• Introduction of experience rating in the Work Account
• Extension of the Accredited Employers’ Programme (AEP)
• Greater independence of the Disputes Resolution Service
• Decision in principle for introduction of choice in the Work Account

No increase in levies will be welcome, however the changes made by Labour added so much extra costs, further increases may be inevitable.

Experience rating is excellent. It rewards safer workplaces. It means employers get a carrot, not just a stick, to be safer.

But best of all is the decision in principle to restore choice for workplace accident insurance. This was flagged in the 2008 manifesto and it is not privatisation. It is allowing other providers of workplace insurance to compete with ACC.

National was looking hestitant on bringing back competition, but this is where it is useful to have ACT in Parliament. They put the pressure on for choice and competition to occur in the work account, as an unofficial quid pro quo for the previous levy increases.

Simon Collins reports in the Herald:

The proposal follows a law change this year giving ACC the power to vary levies on employers in line with their accident records.

This system, known as “experience rating”, will take effect for employers next April.

The ACC’s consultation document suggests extending the same principle to levies on motorists and income-tax payers or “earners”.

An employee on the average income of about $50,000 a year will pay more than $1300 in ACC levies this financial year.

That is 2.6% or gross income or around 3.5% of after tax income, which is a huge cost.

The ACC document suggests that motorists’ levies, paid through vehicle licence fees to compensate road accident victims, could be increased for people who get many traffic tickets and for younger drivers, and reduced for people such as pensioners with good safety records.

Yes, absolutely. That retains the insurance component of the scheme, but provides incentives for safer drivers. Why should a 65 year old with a 45 year perfect driving record pay the same as a new driver who has already been involved in an accident and has several speeding tickets.

For earners, who now pay a 2 per cent income tax surcharge to compensate working people injured outside workplaces and roads, the corporation suggests a no-claims discount for people with no injury claims in the past five years, offset by higher levies for those with more injuries, such as many sports players.

Please. I don’t think I have had an ACC claim for well over 20 years.  Of course my employee levy is modest compared to the employer levy.

It also suggests an option to pay a lower levy in exchange for reduced benefits, and poses three questions:

“Would you prefer to pay lower ACC levies in return for a 10 per cent drop in compensation for lost income after a less serious injury, such as a sprained ankle?”

Yes.

“Would you prefer to pay lower ACC levies in return for a longer wait period. For example, extending the period without lost income compensation from a week to a longer period, such as three weeks?”

Yes.

“Would you prefer us to lower the earners’ levy in return for earners paying more of their accident-related treatment costs?”

Depends on the details of the trade off, but certainly keen to at least have the option so people can choose for themselves what best suits them.

Dr Smith said there would be problems in adopting ACC’s proposals for motorists and sports players.

Young drivers could register their cars in their grandparents’ names, and he did not want to harm the “broader social benefits” of sport.

I’m not sure the level of avoidance would be great. Agree you do not want to put people off sport, but I think the cost of ACC is not a major factor in decisions on sport.

Pete Hodgson takes a break from his normal dirt gathering on John Key operation, to try a half truth. He blogs:

Declare ACC to be in big financial trouble, even though it collects about $1 billion a year more in revenue than it pays out in claims.  Rachet up the levies for everyone.  Single out motorcyclists for an especially harsh increase.  Then cut the cover for lots of things such as hearing loss.  Make it really hard for the victims of sexual abuse.

Monty comments on the post:

You just don’t do this very well do you? This post is one of the worst I have seen from labour MPs – but it is short on facts. The increase in levies is to future fund the committed claims and is actually an extension of what Labour were already doing – in fact Labour’s target was more ambitious than National’s Target which was extended.

Hodgson is just doing his normal smear with his claim that there is no need for levies to go up, and that ACC is collecting far more money than it needs.

If, and this is a big if, Labour were against ACC being “fully” funded to cover the future treatment costs of today’s accidents, then he would not be a total hypocrite with his post.

But Labour is in favour of full funding. They fucking introduced it. They in fact had, as Monty said, a more ambitious target.

One can have a legitimate debate about the merits of full funding ACC. But it is a desperate smear to attack National for running a cash surplus in ACC, when Labour’s policy is to do exactly the same thing.

UPDATE: I’m informed that the policy to fully fund ACC actually was initiated by National in 1998, so Labour did not introduce it, but they did maintain it for nine years

The Herald reports:

Employers are being offered a carrot and stick to improve workplace safety under a Government scheme which gives discounts and penalties of up to 50 per cent on their ACC levies.

But the Government acknowledged Opposition concerns that the proposal carries the risk of bosses pressuring workers not to report injuries.

ACC Minister Nick Smith yesterday said the Government planned to apply “experience rating” – essentially a no- or low-claims discount on employers’ ACC levies – from April next year.

On the other side of the ledger, employers with poor safety records will pay higher levies.

The two-tier system will see larger employers receive up to a 50 per cent discount or a 50 per cent penalty according to their record over the preceding three years. Smaller employers including farmers will receive a 10 per cent discount or a 10 per cent increase on their levies depending on their record of employee injuries.

Excellent. Rewarding safe workplaces and penalising unsafe workplaces makes sense. Also on a personal front, will be nice to have a reduction in levies considering in six years of operations, we’ve not had one workplace accident or claim.

The proposal was welcomed by Business NZ and Federated Farmers. However, while Labour’s ACC spokesman, David Parker, said it seemed appropriate to reward employers who acted to prevent workplace accidents, some might not report accidents in order to protect their discounted levies.

“It is also a possibility that some employers will encourage employees hurt in workplace accidents to report their injuries as being non-workplace.”

Greens leader Russel Norman said it would not work for the same reasons.

Smith acknowledged those concerns but did not believe they were valid.

” I accept you might be able to fudge whether the sprained ankle was at work or tennis, it’s a lot more difficult to fudge where there was a serious accident.”

Norman is speaking nonsense. This is not some new thing – it has been used extensively in the past, and worked very well. The left always try to promote the scenario of the evil employer who will break the law and lie and cover up to save a few hundred dollars here and there – and then use that as the rationale for a lowest common denominator approach that all employers must be punished.

There are some bad employers out there. Yes. But don’t penalise all employers for a few. To 98% of employers, they would never not report an accident, just because it may slightly affect a future premium,

And as Nick Smith pointed out, a sprained ankle is not going to change your premium much – it will be the serious injuries that really affects levies or premiums, and they can’t be hidden away.

The Herald talks social media:

If anyone doubts how technology is changing the way people communicate with each other they should consult the latest research by the Privacy Commissioner.

Published this week, the survey of Individual Privacy and Personal Information shows that 43 per cent of us now use a social networking site such as Facebook or Twitter.

This is an enormous increase from the 14 per cent recorded three years ago. Clearly these sites provide a welcome service to large numbers of happy customers.

But there is a big difference which Privacy Commissioner Marie Shroff highlighted with the release of the survey results. She pointed out that more than half of those who used social networking sites assumed them to be private spaces.

However, this was really an illusion of privacy; personal details or pictures could be easily obtained by third parties, creating the real possibility of unintended, unacceptable and even dangerous consequences.

They are public places, but the sheer amount of info there, makes them semi-private. Unless someone is looking for your info for a reason, then people’s info generally stays with friends and families. But if you apply for a job, come to public notice in some way, it is all there to be seen.

A much better approach was suggested by Ms Shroff this week when she urged people to use internet safety resources available through Hector’s World, Netsafe and the Privacy Commissioner’s website.

As the survey has shown, most people join social networking sites with their eyes wide open and they understand the risks and issues and how to protect themselves.

Rather than bringing in more laws, the challenge should be to open the eyes of the few who fail to see the consequences of what they are doing.

I agree.

The Press wants better  roading infrastructure:

New Zealand has had a habit of under-investing in road infrastructure.

The most obvious example of this has been in Auckland, where decades of myopia has required multi-billion dollar catch-up projects, while in Wellington, the Transmission Gully route was until recently an exercise in dithering.

And in Canterbury it should not have taken a triple fatality crash on Saturday morning to highlight the driving risks on parts of State Highway 1 which require action. …

Steven Joyce has shown commendable speed in identifying roading priorities and pledging the money to them (the harder part).

This roading situation might have been adequate or acceptable a generation ago, when traffic volumes were far lower, but not today. Waimakariri and Selwyn, through which SH1 goes, are two of the fastest growing districts in New Zealand. Increasing numbers of commuters travel from small towns, including new ones such as Pegasus, into Christchurch, sharing the road with significant tourist traffic and with trucks.

The US do it quite well. Motorway and highways do not go through towns but around them.

The Dom Post looks at democracy in Tonga, or the lack of it:

The only good thing that could have come from the tragic sinking of the Princess Ashika off Tonga would have been a new openness and accountability in the Tongan political system.

The resignation of Attorney-General John Cauchi suggests that is a forlorn prospect.

The inquiry gave Tongans a rare glimpse of the inner workings of the elite who run their country – an elite who gain power based on hereditary links and personal contacts rather than talent. But having promised, and delivered, a fully transparent inquiry, it appears Tonga’s rulers are getting cold feet.

The Australian-born Mr Cauchi quit last week over government plans to abolish the judicial services commission which appoints judges. He believes the move is an attempt to interfere with the inquiry. Others say the cabinet is trying to discredit the royal commission.

The Tongan Government says Mr Cauchi was unable to properly exercise the powers he was granted and outsiders should butt out. Political reform is a matter for Tongans alone.

But as Tongans do not have the vote in a meaningful way, that is not true. They do not have the ability to get change internally.

And the ODT looks at ACC:

Unless it is a statistical blip, evidence points to procedures within ACC’s Sensitive Claims Unit having radically altered.

Figures show 32 sexual-abuse claims for counselling were approved in the first two months this year, compared with 472 in January and February 2009.

That is not far off a tenfold decrease.

And, on Monday last week, ACC Minister Nick Smith announced the way the corporation managed the claims of sexual-abuse victims was to be reconsidered.

To this end, he named a panel to undertake a “clinical review to ensure best possible practice in this sensitive area”. …

The conclusion must be that changes to the way in which ACC handles such claims, introduced in October last year by Dr Smith, have been responsible for the drop.

On the one hand, this will undoubtedly be helping to meet the savings of which the minister has made something of a mantra; on the other, it could mean that the changes have been “overcooked”, laying the minister open to charges of callousness and injustice.

Personally I don’t think sexual abuse victims should receive ACC. I do think they should get assistance for counselling etc from the state, but through Vote Health or Vote Justice. One of the problems of ACC is it has expanded too far from its original mandate.

The Dominion Post praises Nick Smith:

Machiavellian, arrogant, hot-headed. ACC Minister Nick Smith has been called all those things and more. And by his friends. He has a reputation for throwing tantrums and flying off the handle when things don’t go his way.

Don’t worry – the praise is coming.

But Dr Smith is also a passionate advocate of his constituents’ interests and a minister who takes his responsibilities seriously. For that, taxpayers have reason to be grateful. It is because he keeps his ear to the ground and takes an active interest in his portfolios that a potential fraud has been uncovered within ACC. The corporation said this week that it had sacked a staff member – known to be its property manager Malcolm Mason – and referred “matters of concern” to the Serious Fraud Office.

Those matters relate to property transactions involving ACC in several different parts of the country and that appear to go back some time. However, it was not until Dr Smith queried the rent ACC was paying for its new offices in Nelson that anyone within the corporation thought to compare the prices it was paying for office space with the going rates. Dr Smith did so because local retailers were worried that the $346,320 a year ACC was paying to rent its Nelson premises set too high a benchmark and because other locals feared ACC was not getting value for money.

The advantage of a Minister also being a well connected local MP.

Dr Smith signalled his unhappiness by refusing to open the building. Contrast his attitude with that of Labour’s former internal affairs minister, George Hawkins, who ignored newspaper reports and industry concerns about the leaky building crisis for more than 12 months about 10 years ago because officials had not formally advised him there was a problem.

“One would expect that, if there was a problem, the people set up to deal with that would inform their minister,” he said at the time. “They did not.”

If Dr Smith had taken the same approach, ACC would still be unaware it was paying twice the going rate for office accommodation in Nelson and would not have uncovered irregularities in other parts of the country.

Irascible? Yes. Economical with the truth? Sometimes. But also an example to other ministers of what the public expects. The job of ministers is not simply to sign pieces of paper put in front of them by officials, open new buildings, bandy unpleasantries across the floor of the House and enjoy their generous salaries and perks. It is to actively represent the interests of voters.

Dr Smith has done so. He deserves to be congratulated.

On this issue, few would disagree.

The ODT focuses on the UN declaration:

The latest manifestation is the sudden – it has been described as “secret” – accession on Tuesday to the United Nations Declaration on the Rights of Indigenous Peoples with a statement delivered by Maori Party co-leader and Maori Affairs Minister Dr Pita Sharples to the United Nations in New York.

It has been met with tension, and what might be described as a tantrum, by the third party in the coalition Government’s bed: Act New Zealand.

Leader Rodney Hide has responded to the news with a display seldom seen even within the somewhat elastic emotional parameters of coalition politics. …

Mr Key and senior National Party figures will be gambling that this gesture towards the Maori Party will further enhance the mana of the latter, cement more tightly the political allegiance between the two parties, and deflate the more demanding ambitions of radical Maori – personified in Parliament in the character and rhetoric of Hone Harawira – while, in practice, giving nothing at all away.

They appear to have decided that the subtlety of principle should be subjugated to the symbolic glue of pragmatism.

It may make political sense, but while National retreats to the safety of descriptors such as “aspirational” and “non-binding”, it is hard to escape the conclusion that, on this matter, it speaks with a forked tongue.

Matt McCarten writes in the HoS:

One hundred thousand workers on the legal minimum wage of $12.50 an hour get 25 cents added to their hourly wage this week. Thousands of others between the minimum and $12.75 an hour will get a top-up.

Given that we have a recession, many people may think those workers should be grateful to John Key for giving them anything. As Key said, at least the 25 cents would cover inflation, making them no worse off, and a group of low-paid workers told me this week that “it’s better than nothing”.

But as with many stories about workers and their relationship with the employment system, all is not as it seems. The fact is that, from today, low-paid workers will be worse off than they were this time last year even after the supposed largesse from our Prime Minister, because their Accident Compensation levies go up this week, too.

The Government hopes workers won’t notice, but those on the minimum wage will have an extra 3.75 cents an hour automatically deducted from this week’s pay packet.

It’s a tax increase, although National pretends it’s not. What is galling is that the levy increase is being imposed to ensure ACC can show a big profit and then be flicked off as a cash cow to some multinational after the next election.

Matt is right that ACC premiums are going up, from 1.7% to 2.0%.

However what he overlooks is that National’s pruning of ACC has prevented the premiums from going up even further. The massive unfunded liabilities left by Labour would have pushed the employee ACC levies up to over 3.0% of income.

Matt was one of those protesting the pruning of ACC’s costs, so for him to them protest about the levy increase is rather hypocritical.

This is not Disneyland, where you can have the costs of ACC increase, but not have levies increase.

And frankly the idea that anyone would buy ACC is as nonsensical as the notion that anyone would buy Kiwirail.

Michael Littlewood argues in this paper that neither ACC nor Superannuation should be pre-funded.

He argues that pre-funding of ACC should not just be delayed until 2019 (instead of 2014), but is inappropriate for a Government entity.

I suggest people read the full paper, bus his points in summary are:

• The ultimate owner of the provider, the government, will never disappear. Also, the government has the power to tax to meet future liabilities, expected or unexpected. The ACC has therefore no apparent need to maintain a pool of invested assets to pre-fund its expected, contingent future obligations.
• By maintaining the ACC Fund the government is effectively in the business of portfolio investing.. That is because, when the accounts for the ACC are consolidated as shown in Chart 1, the ACC’s investments become the government’s. The ACC does not itself
  need to address the issue (whether or not to be a portfolio investor) but the government should.
• Borrowing to buy portfolio investments (shares, bonds etc) is speculation – again, not necessarily a bad thing in itself. The borrower takes on the risk that the returns from those investments will be at least as great as the cost of the debt used to acquire them.
  Borrowing to invest magnifies the yields and the losses. It turns a good return into an excellent return; and a bad return into a potential disaster.

Interestingly both Labour and National support pre-funding of ACC.

As expected, the increase in ACC levies is less than proposed, but are enough to stop the unfunded liabilities increasing.

What I find interesting is that the average worker now pays $1,300 a year in ACC levies. That is a huge amount of money. If workers paid it directly, I suspect there would be far far more support for reducing the costs of ACC. But workers pay it in three ways – through the employee PAYE levy, petrol tax and vehicle registration levels.

On top of that is the employer levy. Ultimately workers pay for this also, through lower wage levels. Employers factor the total cost of employment into decisions on staffing and wage levels. This is another $700 a year

So the average worker has $2,000 paid to ACC. The average after tax income is around $40,000 so ACC consumes around 5% of take home pay.

Over a worker’s life, they pay a huge amount of money into ACC. Are they getting value for money? I have my doubts. Of course it is the nature of accidents that some will be injured more than others, and need more support. But I suspect for 95% of levy payers, the benefits they get from ACC are miniscule compared to their lifetime contributions.

The Government has started off in the right direction by trimming some of Labour’s expansions to the scheme. I hope they continue to trim.I’m all in favour of families not being left starving when an income earner is unable to work due to an accident. I am more sceptical about ACC funding the myriad of providers of different medical services from counselling to physio. I’d rather we fund them through Vote Health for low income families rather than have someone on $100,000 get free phsyiotherapy for their skiing injury.