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Jobs under threat from ACC privatisation

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New Zealand must heed the warning from Western Australia where thousands of jobs are being lost as a direct result of a privatised work injury compensation scheme, Labour ACC spokesperson Ruth Dyson said today.

"In Western Australia, workers compensation premiums have increased by an average of 35 percent this year and are predicted to rise by another 50 percent next year. Some businesses have seen their premiums rise five-fold over the last two years. As a result staff are being laid off and many businesses are folding.

"The same problems can be expected in New Zealand as a result of National's privatisation of ACC," Ruth Dyson said.

"Some employers, especially the big ones, have been able to negotiate attractive deals with insurance companies desperate to grab a large share of this new market.

"These premiums are not sustainable and it is inevitable that they will rise significantly. International experience has shown that the involvement of private insurance companies in this area is more expensive. The internationally proven, most efficient way of delivering those functions is through a well-managed single public model.

"National's change to private insurance is not a step forward but a step backward. We had it prior to 1974. So why were private insurers removed then? Because, as is the case now, their involvement is more expensive, more litigious, and less likely to reduce injuries in the workplace.

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"Labour will rebuild ACC based on the three primary functions of injury prevention, rehabilitation and compensation - in that order. It will be delivered through a single, public model. We have taken the opportunity of reviewing international models and learning from the many mistakes in legislation and governance of the last 25 years.

"Labour's scheme will be financially and politically sustainable, have integrity and will earn the support that it needs to survive," Ruth Dyson said.

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