ACC- the facts
By Labour ACC spokesperson Ruth Dyson.
Twenty-five years ago, ACC started in New Zealand. It was hailed as a major breakthrough in the delivery of medical treatment and compensation for people who had suffered an injury. For the first time, non-earners (predominantly then and still now, women and children) received access to medical treatment. The extension of the previous "Workers' Compensation" to all New Zealanders was internationally acclaimed. Twenty-five years on, National has reverted to a private insurance model for Workers' Compensation. Labour has committed itself to rebuilding ACC in a single public fund model.
Some employers believe that private insurance is better because this year they have saved money. Sadly, that "saving" stands up to little scrutiny. I have looked at many such "savings" and the figures just don't add up. To compare last year's ACC levy with this year's private insurance levy is nonsensical. It is comparing apples with pears. To this year's private insurance levy, you must add on the residual claims levy (which employers are still paying - but paying separately, to ACC). You must deduct the experience-rating rebate, which you received back from ACC last month. You must calculate the health & safety provisions which you may now be purchasing separately or funding yourself internally. If you are paying about 50% of last year's ACC levy, then you are about breaking even.
But Labour's policy is by no means a defence of the appalling practices of ACC and certain Ministers of ACC. We certainly do not intend to return to the frustrations that everyone has felt about ACC. We have 25 years experience to learn from and in rebuilding ACC we have ensured that the mistakes of the past are removed and that the innovations over that time are captured.
That's why in both the structure and the policy, ACC will be new and different. It will be accountable and efficient.
ACC was originally designed to promote injury prevention as its number one goal. Clearly, neither the legislation nor the policy reflected that. Injury prevention will be the number one responsibility of the Corporation. The Board will be contracted (in the same way the Reserve Bank Governor is contracted to inflation targets) to ensure that delivery injury prevention programmes are delivered. Where an industry has a high quality safety and health programme operating, it will be supported to continue that programme.
The conflicting roles in OSH between education and prosecution will be removed. Education will be moved into ACC so that if an employer wants help, they will be able to go to ACC without fear of investigation or prosecution.
Employers' levies will be reduced on the basis of their improved health and safety practices. Currently, employers are experience rated. While this has focussed the minds of some employers on the cost of accidents, it has not in fact reduced the number of accidents. Experience rating also encourages under reporting or transfer of work accidents to non-work accidents, it encourages litigation (which delays rehabilitation), and it penalises employers who may have done everything to reduce injuries.
I visited a plant recently which has a comprehensive health and safety programme operating. They have not had injuries in the workplace - until one of their staff tripped on the stairs, resulting in serious injuries. The employer is now penalised for that. So where is the incentive for continuing with the health and safety programme? Our alternative to experience rating will encourage reporting of injuries, raise the health and safety standards in our workplace and financially reward employers for their efforts.
The second function of the Corporation will be rehabilitation. Like injury prevention, this has been almost completely ignored by ACC until recent times. Rehabilitation must begin as soon as practicable after an accident or injury. "Return to work" -either in the original job or in alternative duties - is the aim. ACC is not a higher income alternative to the unemployment benefit and therefore early intervention, active case management and stable relationships with employers will be the driving force of the rehabilitation procedures.
With the move to privatisation of the workers' compensation scheme, the accredited employer and the approved employer programmes have both been scrapped. Labour will reinstate these programmes. They have been very successful in involving employers and unions in the rehabilitation process. Many large employers have developed comprehensive systems, which ensure that their staff receive security of income when off work, regardless of the cause of them being off work (i.e. illness or injury). These improved benefits have developed with employer/employee co-operation but have now been scrapped. They should be allowed to continue and will be, under Labour.
ACC must not be able to incur an unfunded liability in the way that it has over the past few years. In the Independent Newspaper, (6th October), Christopher Ryan of the Insurance Council said that Labour's move to remove private insurance companies would leave claims of up to 30 years duration with no premiums being collected to fund them. In other words, he has revealed that the private insurance companies are not running a fully funded scheme. They have returned to the pay as you go scheme which has caused us so many problems in the past!
Labour will be operating a partial funding/legislated reserves scheme to ensure that these liabilities do not mount up again.
The cost savings with an efficiently managed scheme are huge. For every dollar which is put into rehabilitation, $4 can be saved. We will not need the massive regulatory and monitoring framework required under the private insurance model. In the new Accident Insurance Act, there are 14 new employer taxes - including the "non-compliers fund" - a fund to cover the costs for injuries to staff whose employer has not paid up. So employers are required to cover the costs of employers who don't pay their insurance!
The move to
private insurance is a move back to the system which was
thrown out by New Zealanders many years ago - pre-ACC and
pre Workers' Compensation days. It was thrown out then
because it was too expensive, too litigious, and was not
improving health and safety in the workplace. International
experiences have confirmed the problems with such privatised
Labour wants value for money for all stakeholders in the rebuilt ACC.