ACC Work Accounts To Open to Competitors

ACC Work Accounts To Open to Competitors

Oct 22 (BusinessWire) - Private insurers will be able to bid for workplace coverage under Accident Compensation Corporation changes tabled in an ACC Reform Bill, tabled in Parliament today by the corporation's controlling Minister, Nick Smith.

Smith has secured ACT Party support for its introduction next week, relieving pressure on the relationship between the National and Maori parties on the issue as a blistering political debate develops, with Opposition parties accusing the Key Government of pursuing a privatisation agenda.

In a statement accompanying the Bill, Smith said the National Party was pleased to have ACT and Maori Party support for the Bill's introduction, and support from ACT to ensure bill "will be passed through all stages".

"National's intention is to work with ACT to open the ACC Work Account to competition subject only to the government receiving a report from the steering group currently considering the Stocktake of ACC Accounts that sets out the merits and feasibility to New Zealand of such a policy, and outlines a process to achieve this policy objective in a way that resolves any significant outstanding issues of such a move," Smith said.

The stocktake group will also explore "other areas in which the private and non-government sectors (including iwi) can be involved in accident management and compensation", under an expansion of the group's terms of reference. Its report remains due in June 2010, with an interim report on competition issues out by February 1.

Two more members for the stocktake group will be agreed between National and ACT to work on opening the ACC Work Account up to competition.

The Steering Group is chaired by former Labour Cabinet Minister and former ACC Board chairman David Caygill and contains independent advisors Dr Neil Quigley and Gordon Smith. It also comprises current ACC Board chairman John Judge, and senior officials from Treasury, Department of Labour, and the Department of the Prime Minister and Cabinet.

Labour ACC spokesman David Parker cited newly released Treasury papers on the reforms, which says it is unclear whether privatisation would result in net gains; that it is ‘not clear that levies are excessive’; and that the current publicly-owned ACC system provides ‘a comparative advantage’. Parker says “the reality is the real beneficiaries of privatisation would be the big Australian financial institutions. They are in a position to capture the market and hike up levies as they have done in Australia – where levies are higher. It is inevitable they will seek to impose similar levies here."

(BusinessWire) 18:04:19

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