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Labour Vows `Tooth And Nail' Fight Over ACC

Contributor:
Fuseworks Media
Fuseworks Media

NZPA political reporters

Wellington, Oct 23 NZPA - The Government's clear intention to open ACC to private competition has driven a wedge between trade unions and the business sector.

And Labour says if it goes ahead, which seems almost certain after yesterday's announcement, the party will fight it "tooth and nail".

The catalyst was a deal between the Government and the ACT Party over the bill that raises levies and cuts some ACC entitlements, brought in to curb future deficits.

In exchange for ACT's votes, which will ensure the bill passes all its stages, the Government is going to open ACC's work account to private competition if a steering group recommends it.

Treasury has already said there are advantages to opening up the work account -- although that won't make much difference to ACC's financial plight.

The work account covers personal injuries in the workplace, covered by levies paid by employers. It is ACC's only profitable account.

ACC Minister Nick Smith said the "anticipated decision" to open up the work account" would be enacted as soon as possible after the steering group delivered its final report in June next year.

Prime Minister John Key said the steering group would have a wider brief than the work account.

"Of course they will look at other aspects of the scheme and how it operates," he told reporters.

Business NZ welcomed the Government's move.

"The ability to choose is a key factor in gaining improved access to goods and services for people in all sectors of the economy," said Business NZ chief executive Phil O'Reilly.

"There is no reason why choice cannot also bring better service for claimants and more competitive pricing for premium payers."

The Engineering, Printing and Manufacturing Union (EPMU) said it was a cynical move which would transfer up to $200 million a year from workers to the Australian insurance industry.

"Privatising the work account will mean higher levies and reduced coverage as working New Zealanders are forced to cover the profits of private insurers," said EPMU national secretary Andrew Little.

"National has been utterly cynical right from the outset ... either they planned to privatise the work account all along or they're allowing a party with 3 percent of the vote to dictate the ACC coverage of 2.4 million working New Zealanders."

Labour leader Phil Goff said ACC served New Zealand well.

"Without the profit margin, without the marketing costs, the money that is invested in the levies goes overwhelmingly into providing prevention, rehabilitation and support for people who are injured," he said.

"You take $200 million out of that in profits to the Australian insurance companies and it will come from the pockets of ordinary working New Zealanders who will pay for that profit margin."

The work account was opened to private competition by the previous National government in 1998 but it didn't last long.

Labour returned ACC's monopoly after it won the 1999 election.

Mr Goff said the Government had been looking for an excuse to turn ACC over to "its mates in the business sector" and had found one.

"Very clearly, this is a stalking horse for the full privatisation of ACC," he said.

"Labour is opposed to privatisation. We will fight that tooth and nail and we will reverse it."

The steering group was set up to undertake a full stocktake of all ACC's accounts.

It has been given the added task of reporting on opening the work account to private competition and two new members have been appointed to it.

They are Bryce Wilkinson, a former Treasury policy analyst, and Michael Mills, director of consulting firm Martin Jenkins and Associates.

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