Government delivers ACC Christmas gift

MEDIA RELEASE

20 December 2010

Government delivers ACC Christmas gift

Federated Farmers welcomes the Government’s announcement today that it will be looking at opening Accident Compensation Commission (ACC) to private sector competition and that levies for 2011 will not increase.

“We think today’s decision is a good first step towards reform of the accident insurance sector. For the majority of its existence ACC has been a state monopoly,” says Don Nicolson Federated Farmers President.

“By having that privileged status ACC has not been exposed to private sector commercial disciplines, and as a result we have no benchmark for its success. Allowing the private sector to compete will bring competitive tension and reduce the costs to the business sector.

“Federated Farmers always supported opening up ACC to competition and while that was achieved for a period in the late 90’s the concept was short lived because of political ambition.

“In the ensuing years ACC’s history of massive levy increases has been totally unsatisfactory. They were a reflection of the blow-out in liabilities, from $9.35 billion as at June 2004 to $23.78 billion as at June 2009.

“We strongly support the Government’s moves today which address our concerns and freeze levies for the 2011/12 year.

“Putting aside the issue of levies paid, successive Business New Zealand – KPMG Compliance Cost Surveys have shown that ACC ranks in the top three compliance cost priorities for businesses. This is as true for farming as it is for any businesses.

“At the most basic level, it’s an issue of choice. Why should consumers be locked into one monopoly supplier?

“It would be great if there was bi-partisan support for today’s moves because business and potential new insurers need certainty and stability in the accident insurance sphere. It is unsettling and very costly bouncing back and forth between an open and closed system.

“ACC is an important issue for farmers. Federated Farmers supports the ACC ‘no-fault’ philosophy behind compensation for personal injury and we recognise the significant financial and social implications that injuries and fatalities have on our members and their families.

“Federated Farmers has an active role in injury prevention and has long worked alongside ACC and other agencies concerned with health and safety in the rural sector. This won’t change once the competition moves in,” he concluded.

ENDS

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