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National plans to butcher ACC again

25 August 2005

National plans to butcher ACC again

“It is appropriate that National launched their ACC policy in a butchery, because that’s what they would do to ACC,” ACC Minister Ruth Dyson said today.

Ms Dyson said National’s plan to privatise workplace accident insurance was a costly experiment that had already failed miserably before.

“Levies were higher under the privatised workplace insurance scheme set up by National in 1999, while compensation and rehabilitation of injured people was worse.

“Since Labour returned ACC to state provision in 2000, the employer levy has fallen by 30 per cent, from $1.22 to 0.88c per $100 of earnings. In comparison, premium rates for private schemes around the world have escalated, especially post-9/11. Some businesses overseas have faced premium hikes of up to 500 per cent.

“Not only are ACC’s average employer levy rates 62 per cent lower than the average for Australian schemes, but our rehabilitation and return-to-work rates are much better.”

Ms Dyson said ACC was able to offer lower levies because a large slice of private schemes’ premiums went into profits and commercial costs.

“Only about 60 per cent of the amount collected in premiums by New Zealand private companies was available to meet claims, compared to nearly 90 per cent under ACC. This means ACC can not only set lower levies, but invest more in injury prevention, and provide better entitlements such as lump sum payments for permanent impairment.

“In contrast, the private market creates incentives for employers to under-report injuries and buy the cheapest scheme, where ‘savings’ are made at the expense of injury prevention, rehabilitation and other entitlements. Disputes and litigation would increase as a result.

“National’s folly is not just about wasting money on fixing something that isn’t broken. They would destroy a world-class scheme that other countries dream about,” Ruth Dyson said.

ENDS

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