Privatising accident compensation will cost workers more

“The government plan to privatise workplace accident compensation will see workers’ paying more for less,” says Public Service Association National Secretary Richard Wagstaff.

“The government has already begun undermining support for victims in preparation for the reduced support they’ll get from insurance companies under privatisation.”

The Injury Prevention Rehabilitation and Compensation Amendment Bill will reduce ACC coverage, cut accident compensation entitlements and force accident victims to return to work earlier.The Bill is waiting for its final readings before becoming law.

“There’s no need to cut ACC support because ACC had a $1.1 billion operating surplus in 2009,” says Richard Wagstaff. “The government’s claim that ACC is in financial trouble is false.”

“The fake crisis at ACC is being driven by the government demanding ACC be fully funded by 2019.”

“The reason for fully funding ACC is to put it on the same financial footing as insurance companies so they can cash-in when accident compensation is opened up to competition,” says Richard Wagstaff.

This was pointed out by Sir Owen Woodhouse in an article entitled ‘Father of ACC opposes changes’ published in the Otago Daily Times on October 21 last year.

“Sir Owen said fully funding ACC is like requiring parents to pay the full cost of their child’s education at age five on their first day at school,” says Richard Wagstaff.

“Not only is it unnecessary to pay for a child’s entire education when they start school at five, it’s impossible to know if the child will go to university, poly tech or leave school and go straight into a job.”

“Requiring ACC to be fully funded is to enable overseas-owned insurance companies access to $2.1 billion in new premium income when workplace accident compensation is privatised.’’

“The Australian investment bank, Merrill Lynch, estimates this would boost the insurance companies after tax earnings by $200 million.”

“New Zealand workers will provide this profit to overseas-owned insurance companies when workplace accident compensation is privatised.”

“Australian workers pay more than double the amount New Zealand workers pay for workplace accident compensation, because insurance companies provide workplace accident compensation across the Tasman,” says Richard Wagstaff.

In Australia, workers pay an average of $1.96 in every $100 of their pay towards their worker compensation schemes. In New Zealand workers pay 94 cents per $100.

“As well as paying more for their workplace accident compensation Australian workers get worse service,” say Richard Wagstaff.

ACC disputes 0.2% of workplace injury claims. In Australia on average 9% of workplace injury claims are disputed by accident compensation providers.

“Despite the evidence showing ACC provides cheaper and better accident compensation the government is determined to privatise workplace accident compensation,” says Richard Wagstaff.

ENDS

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