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ACC changes mean NZers will pay more for less, says Labour

Thursday 2nd June 2011

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Opening up ACC's workplace accident compensation scheme to private competition means New Zealanders will have to pay more to get less, Labour says.

The well-signalled change, to be introduced from October next year, was among proposals detailed in a discussion document on ACC reforms released yesterday.

ACC Minister Nick Smith said the proposals were not about privatising ACC, but removing its monopoly and keeping up the pressure for it to perform.

"The Government is committed to retaining our unique 24/7 no-fault system and workers' entitlements but wants to improve the incentives for safer workplaces, better rehabilitation and greater cost effectiveness."

Opening up the work account would allow employers to choose between ACC or a private insurer and put businesses at the centre of workplace injury management, he said.

The Government would no longer set levies for the work account, and pricing would be deregulated to allow competition.

Continuous coverage for employees would not change.

"We are proposing that employers and insurers would have responsibilities spelt out in the law, and would be monitored and face stiff penalties if they do not comply."

Labour ACC spokesman Chris Hipkins said New Zealanders would end up forking out more for less.

"The only way the private insurance industry will make money from taking on ACC's role will be by reducing entitlement or increasing costs. Either way, Kiwis will lose."

He said Smith was trying to "dress up" the proposal as increased competition, when the changes amounted to "privatisation, pure and simple".

Labour would reverse the changes if it became the government at the election.

Council of Trade Unions secretary Peter Conway said the changes would result in long delays for large claims and higher costs.

"Opening it up to private companies will make it more, not less, expensive to run. It will make it slower and more difficult for injury victims to get payment, and it will not get people back to work quicker," he said.

But Business NZ chief executive Phil O'Reilly said choice and competition would allow insurance and rehabilitation packages to better meet the needs of workplaces and employees.

It would be important to ensure a level playing field for competition in the work account, and ACC premiums should be set in a transparent manner without political interference, he said.

Smith told reporters National would campaign on the changes after receiving feedback on the discussion document.

"With that input the Government will then put the specific proposal to the electorate at the election in November and they'll only proceed with that important electoral mandate."

He denied the changes spelled the end for ACC.

"Quite the opposite. ACC needs the constant pressure of competition to ensure that it stays on its toes."

Smith signalled that other ACC accounts could be open for competition in the future

"The Government is focused on the workplace account, we are not closed-minded about potential for choice in other accounts but that is for another day."

Changes to the work account meant the costs would more closely reflect an individual employer's risk and safety record, he said.

Among the proposed changes is an extension from April next year of the Accredited Employer Programme, which allows accredited employers to self-manage and fund workplace injury claims.

The programme was delivering 12% fewer claims and 15% lower costs, Smith said.

Insurers would have to meet minimum prudential requirements, and in the event of an insurer failing, the cost would be met by a levy on all workplace insurers.

A market regulator would monitor and enforce employer and insurer compliance.

Minimum prices and conditions for health providers would be put in place, and a single claim lodging unit would minimise administration for the health sector.

The Department of Labour will accept submissions on the proposals until July 15.



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