Controversial changes to ACC were passed into law in Parliament last night after nearly two days of fierce debate.
Some entitlements have been cut and levies have been raised through legislation the government says is essential to safeguard the scheme's future.
"The reality is this – the cost of ACC claims over the last four years has increased by $1.3 billion, or 57%," ACC Minister Nick Smith said during the bill's third reading debate.
"This is a bill about being fair to levy payers and accident victims, an affordable 24/7 ACC system for New Zealand."
Dr Smith said he had intervened, through provisions in the bill, to halve the levy increases that would have come into force on April 1 under existing law.
"Can New Zealanders afford an extra $74 per car, because if you don't support this bill that is the scale of increase that is required under the existing act," he told Labour MPs.
"Can New Zealanders afford an additional $300 for the earners levy...can businesses afford a 25% increase in their levies? The government says they can't."
Dr Smith blamed the previous government for ACC's plight, saying it signed off on a $2.4 billion loss in June 2008.
"But it's worse than that – after declaring a $2.4 billion loss, in a cynical political exercise Labour extended ACC into a dozen additional areas without providing any funding," he said.
The changes including pushing out the date for full funding of ACC from 2014 to 2019, which Labour agrees with.
But Labour doesn't agree with changes to the work assessment regime, reduced entitlements for seasonal workers, making it more difficult for people to get hearing aids, and removing compensation for criminals in jail and the families of suicide victims.
Labour's former ACC minister, Maryan Street, said the government was preparing ACC for privatisation.
"This legislation is a complete travesty, a complete abrogation of the responsibility that comes with a social contract," she said.
"The principle of complete rehabilitation has been offended in this bill. People will be assessed as fit for work if they can work 30 hours a week, regardless of the occupation they used to be in and regardless of the salary they used to earn."
Ms Street accused Dr Smith of telling half truths about ACC's losses.
She said its investments performed above benchmark for the last decade, and then the recession struck and affected those investments.
"All that needed to be taken was a long view, and watch the investments begin to recover," she said. "Now, the earnings of ACC and New Zealand Superannuation investments are fuelling the government's coffers."
The bill was passed on a vote of 64 to 58.
National, Act and United Future supported the bill. Labour, the Greens, the Maori Party and the Progressive Party opposed it.
Peter Wilson of NZPA
Thu, 25 Feb 2010