PSA Says Everyone Will Lose Over National Policy
PSA MEDIA RELEASE
June 16, 2008
PSA Says Everyone Will Lose If National Gets the Chance To Privatise ACC
“Everyone will lose if National gets the chance to privatise ACC because we’ll all have to pay more for accident compensation,” says Richard Wagstaff, National Secretary of the Public Service Association, which has 670 members working for the ACC..
National leader John Key has announced his party’s ACC policy. It states that National will investigate opening ACC’s Work Account to competition.
Mr Key then told Radio New Zealand National’s Checkpoint programme that it was almost certain National would open the workers’ accident compensation account to competition if his party comes to power.
“Mr Key appears nervous about coming out and saying National will privatise ACC but that’s clearly what will happen if National is elected,” says Richard Wagstaff.
“I can understand Mr Key’s nervousness because his policy will mean workers and employers will pay more for accident compensation and get less for their money,” says Richard Wagstaff.
Australia has privatised accident compensation and workers there pay an average of $2 in every $100 towards their worker compensation schemes. In New Zealand workers pay 78 cents per $100.
“And our accident compensation is better than Australia’s privatised system,” says Richard Wagstaff.
Here people who are not in paid employment, like senior citizens and children, are covered by ACC. And New Zealanders also receive accident compensation if they’re injured playing sport. This doesn’t happen in Australia.
“So who will benefit from privatising ACC? The insurance companies, most of which are foreign owned,” says Richard Wagstaff.
This was confirmed when Australian investment bank, Merrill Lynch, issued a report recently saying it believed National would privatise ACC if it comes to power.
Merrill Lynch’s report said this would give Australian insurance companies access to $2.1 billion in new premium income, boosting their after tax earnings by $200 million.
PricewaterhouseCoopers has confirmed that privatising ACC would push up the cost of accident compensation in a report issued in April.
“PricewaterhouseCoopers said privatised accident compensation is more expensive because private companies have to deliver a profit and cover marketing expenses,” says Richard Wagstaff.
The PricewaterhouseCoopers report all stated that ACC “performs as well or better than most other schemes we can observe around the world.”
“With all this evidence to show that our state-owned system provides cheaper and better accident compensation than privatised schemes, why is National planning to privatise ACC?” says Richard Wagstaff.