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Key’s windfall plans for Aussie insurers

Hon Phil Goff
Associate Minister of Finance

2 July 2008
Media statement

Key’s windfall plans for Aussie insurers puts big business before Kiwi families

A report detailing National’s plans to privatise ACC shows National are busy briefing the insurance industry behind closed doors but are still keeping their plans from New Zealanders, Associate Finance Minister Phil Goff said today.

“Once again, the National Party has been caught out telling New Zealanders one thing and telling their big business friends their real plans to give them millions of dollars of new income by privatising ACC and pushing up levies for ordinary New Zealanders,” Phil Goff said.

“A spokesman for National told the Dominion Post that it would ‘have to wait’ for its ACC policy but the report shows National has been far more forthcoming to the insurance industry behind closed doors.

“The detailed report by merchant bankers Merrill Lynch’s Sydney office to its share trading clients looks at National’s plans to privatise ACC if the party was ever elected and analyses the opportunities privatisation would bring Australian-based insurance companies.

“It says that while National has made no formal statements about its ACC policy, ‘informally, however we understand the National Party has been very clear in saying it will privatise’.

“John Key, a former employee of Merrill Lynch, has said very little about his plans to privatise ACC except to say the party would offer ‘choice’ for accident insurance in the workplace.

“Let’s be clear, the word ‘choice’ means selling off this world-leading scheme. The insurance industry knows this and are licking their lips in anticipation,” Phil Goff said.

“The report goes on to say:

“ ‘The National Party has been cautious about its statements on the possible privatisation of the ACC market but are giving the insurance industry a strong message that it is a likely outcome if it wins the election.’

“The report makes it clear that National is secretly telling the insurance industry they would privatise ACC if they ever get the chance and that nothing has changed from 2005.

“If National ever got the chance to privatise ACC, it would mean higher costs for ordinary New Zealanders and big profits for National’s big business friends. The report estimates it would unlock $2.1 billion of new premium income for insurers and add $200 million to the industry’s after-tax earnings.

“The report even makes that point by saying that ACC has lower costs than comparable schemes in Australia, and that the ‘bottom line is that the privatisation of some or all of the ACC market would be of high interest to the insurance industry and,….could prove to be a very positive development for the insurers’.

“John Key and others in his party are keeping the public in the dark about ACC levies while secretly pushing on with its privatisation plans.

“It’s the National Party of old, which was telling US Congressmen that New Zealand’s nuclear-free policy would be gone by lunchtime while assuring the New Zealand public that it had no plans to change the policy.

“Its position puts big business before hardworking Kiwi families. This report proves that if ACC was privatised, New Zealanders would be hit with far higher levies if foreign-owned private insurance companies were able to swoop in to make a quick buck.

“National needs to come clean with the public and tell them what their privatisation plans would really mean, who they have briefed about it, and why they won’t state what it is really is,” Phil Goff said.


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