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Labour And CTU Attack Govt Over ACC

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Fuseworks Media
Fuseworks Media

Wellington, Oct 23 NZPA - The Government is being accused of breaking an election promise on ACC and trade unions say the scheme will be destroyed if it is opened to private competition.

Ministers yesterday signalled a clear intention to open ACC's work account to private insurers and Prime Minister John Key said a steering group which will report on the merits of the change would examine other aspects of the scheme as well.

The work account covers personal injuries in the workplace, paid for by employer levies.

National campaigned on investigating opening it to private competition but the Government showed no enthusiasm for that until this week, when ACC Minister Nick Smith needed the ACT Party's votes for a bill that increases levies and cuts some entitlements.

The deal between the Government and ACT was that in exchange for votes to ensure the bill passes all its stages, the work account would be opened up if the steering group recommends it.

Dr Smith yesterday talked about "the anticipated decision" to allow private competition and said it would be enacted as soon as possible after the steering group delivered a final report in June next year.

Labour leader Phil Goff said today National promised during the campaign to investigate opening only the work account to competition.

"John Key now admits National is looking at privatisation across the whole of the ACC," he said.

"Privatisation means money from ACC levies will be diverted into profits and marketing costs.

"Hard working Kiwis will be the losers. They will pay more and get less when they are already struggling with their bills."

Council of Trade Union (CTU) president Helen Kelly predicted ACC would soon be replaced by a private insurance scheme.

"Taking ACC down this privatisation road will destroy it and dismantle all the protections it currently provides," she said.

Business NZ has welcomed the move and today Auckland Chamber of Commerce chief executive Michael Barnett said that during the short time ACC was open to competition in the 1990s, premium costs halved and there was a substantial reduction in claims.

The previous National government opened the work account to private competition in 1998 and Labour returned ACC's monopoly after it won the 1999 election.

Mr Barnett said the shake up of ACC was an opportunity to address "underlying issues" including why New Zealand had one of the highest accident rates among developed countries.

"Our scheme is unique, but is it as efficient and effective as it could be or should be?" he said.

"If it was truly a world-class scheme, by now you would think that other countries would be adopting it."

Mr Barnett said an independent claims review authority should be part of any move to open the work account to competition.

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