Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


ACC Monopoly Won't Deliver Cullen’s Promises - ACT

ACC Monopoly Will Not Deliver Cullen’s Promises

Monday 6th Mar 2000 Ken Shirley Media Release -- Economy

ACT ACC Spokesman Hon Ken Shirley today said ACC will not be able to achieve the 20-30% savings in premium payments from its previous $1.47 average or sustain over time the premium average of $1.16 being promised by the Government.

“To match the competitiveness of the private sector insurers the ACC monopoly premiums should have been less than $1. Even at $1.16 there is no way employers can be promised that their ACC compliance costs won’t rise sharply over time under Dr Cullen’s flawed regime.

“The challenge for Dr Cullen is to disclose his assumptions and explain how his promises are achievable, let alone sustainable.

“There are also undisclosed mistakes in ACC’s statistical base that will add to the costs for employers. The ACC’s 1998 Annual Report notes that only 9.8% of weekly benefit claimants were still claiming after 12 months (page 35). The report also notes on the same page that over half of the cost of claims is in the long term tail after 12 months.

“Conversely the ACC’s 1999 Annual Report (page 40) says that its 12 month continuance rate for the period to June 1998 was actually 16%, not 9.8%.

“This error accounts for an under-estimation of 32% of the total cost of claims. This additional cost would have to be reflected in the premiums. This means that the premium rate prior to privatisation was 30% too low and given the difficulty that ACC is having with its statistics, how can we accept the rates proposed Dr Cullen.

“The reintroduction of the accredited employers programme will compound the problems facing Dr Cullen. Employers with better workplace safety records will be more inclined to leave the risk pool leaving the remainder with a higher average premium cost.

“ACC themselves have told the select Committee that if the top 1000 employers elected to join the Accredited Employers Programme then the standard average employer premiums for the remainder would increase by 10%.

“Other key issues that must be confronted and disclosed by Dr Cullen are:

 the reserves policy for the employers account - what reserving practices are they adopting?

 To what degree have discounts for observed safety management practices been factored into the average premium rate?

 If discounts are not counter-balanced by penalties then the management/operational risk increases.

“It is also noted that the audits provided in the new legislation for employers safety management practices have to be paid from the employers account. Have the cost of audits for 140,000 employers been factored into the premium? How frequently will employers be audited to assess their premium? How many auditors are to be engaged and at what cost? Are these auditing costs in addition to the $1.16 premium?

“ACC have not demonstrated that they truly understand case management and rehabilitation which are the key drivers of sustainable prices. What will ACC do differently? What level of performance are their budgets built around? What will case load ratios be? Will they control costs by reducing service? How can ACC achieve this with an increase of only 20-30 staff to do the work of 7 registered insurers?

“While government is heralding lower premiums now they are also foreshadowing a second ACC bill that will, amongst other things, provide for lump sum compensation and increased administrative tasks. Who is going to pay the difference – the employer or the taxpayer?

“The simplest and preferred way to sustain low ACC premium costs is to reduce the accident rate. ACC’s rather crude experience rating was a significant contributor to bringing the weekly benefit claims down from 2,000 per month to 1,113 per month. The private industry’s more sophisticated structure over the last seven months has been a major contributor to bringing them down to 800 per month.

“The government is scrapping the private industry and experience rating and it is inevitable that claims will head back over the 1,300 per month level.

“The private competitive market has, over the past seven months, delivered major savings and improved workplace safety. Cullen’s hollow promises are no substitute for the evidence in black and white,” said Ken Shirley.


For more information visit ACT online at or contact the ACT Parliamentary Office at

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Crowdsale And Crowdfunding Campaign: Help Create The Future Of Independent News

Two weeks to go! The Scoop 3.0 plan aims to create NZ’s first community-owned, distributed news and media intelligence ecosystem in 2019. We believe this ScoopPro media monetisation approach can be scaled and spread globally to support local and independent news efforts in regional New Zealand and around the world.

Scoop is an ecosystem, it would not exist without those who contribute to it, read it and rely on it for professional media purposes. Generous past support from this ecosystem has enabled us to come this far in developing our business model. Support our PledgeMe Campaign>>


14/11: Two Years’ Progress Since The Kaikoura Earthquake

Mayor John Leggett said it was a day for reflection, but also a time to recognise the work by many people to support progress towards recovery made across Marlborough since November 2016. More>>


Pike River: Mine Drift Re-Entry Plan To Proceed

“I’ve decided the Te Kāhui Whakamana Rua Tekau Mā Iwa - Pike River Recovery Agency, recommended course of action to enter the drift, using the existing access tunnel, is by far the safest option,” said Andrew Little. More>>


Appointments: New High Commissioner To Australia Announced

“Dame Annette King needs no introduction given her long running career as a parliamentarian where she has previously held a number senior Cabinet portfolios, including Justice, Police and Health. She also was Parliament’s longest serving female MP with 30 years’ service,” said Mr Peters. More>>


Two Years Since Kaikoura: Silvia Cartwright To Lead Inquiry Into EQC

“The inquiry will be the first of its kind under the Public Inquiries Act 2013 and will have all the powers of a Royal Commission, be independent of Government and make its report directly to the Governor-General. More>>


Gordon Campbell: On The Royal Commission Into Child Abuse

Obviously, it is good news that the coalition government has broadened the scope of its Royal Commission into the abuse of children, beyond its previous focus on children in state care. More>>


Cases Delayed: Court Staff Refuse To Handle Sentencing Papers

Dozens of court cases have reportedly been delayed, as court staff escalate industrial action at two Auckland courts by enforcing a ban on handling sentencing papers. More>>


Education: Primary Teachers Rolling Strikes

RNZ Report: More than 100,000 primary school students in Auckland will be home from school today as teachers and principals walk off the job for the second time this year. It's the start of a week of rolling one-day strikes around the country, after the collapse of contract negotiations last Thursday. More>>


"Process Was Sound": Inquiry Into Haumaha Appointment Released

The Inquiry’s purpose was to examine, identify, and report on the adequacy of the process that led to the appointment. It found the process was sound and no available relevant information was omitted. More>>





InfoPages News Channels