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AMI troubles show folly of ACC privatisation

AMI troubles show folly of ACC privatisation

“The news that AMI is struggling in the aftermath of the Christchurch earthquake demonstrates the folly of the government’s decision to privatise the work account of ACC,” says Hazel Armstrong, spokesperson of the ACC Futures Coalition.

“We have been here before, “ says Ms. Armstong. “ One of the main insurers involved in New Zealand’s last failed experiment in privatisation in the 1990s was the Australian giant HIH, who were big players in the Australian workers’ compensation market. A couple years after ACC was once again brought under public control HIH collapsed leaving the Australian state and federal governments to pick up the pieces and ensure that injured Australian workers were not out of pocket.”

“We narrowly dodged that bullet”, says Ms. Armstrong, “but AMI’s troubles demonstrate the risks of relying on the private sector for the delivery of this vital social service. We will be handing millions of dollars in ACC contributors’ levies over to the private insurers. They will make large profits in the good times but ultimately the government will have to provide the security needed should any firms fail. That means the taxpayers run the risk of having to pay twice if vulnerable injured workers are to be protected.”

“ACC has demonstrated its worth during the aftermath of the Christchurch earthquake, but the tragedy has also demonstrated the weakness of the private insurance model. It is time for the government to step back from this ideologically driven crusade to privatise one of the great public services in New Zeland,” says Ms. Armstrong.

ENDS

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