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Kiwis will pay more, get less under privatised ACC

Phil Goff
Leader of the Labour Party

18 October 2009 Media Statement

Kiwis will pay more, get less under privatised ACC

The privatisation of ACC would result in higher levies, large profits for private insurers and less cover for injured New Zealander, says Labour Leader Phil Goff.

"ACT Leader Rodney Hide is misleading New Zealanders when he says that privatising ACC would result in lower levies. All the evidence suggests the opposite is true.

“The beneficiaries of privatisation would be the big Australian financial institutions. Ordinary New Zealanders would be the losers,” Phil Goff said.

"Australian insurance company investors were last year being advised by John Key's former firm Merrill Lynch that they stood to reap large profits if National privatised ACC and should be able to ‘capture’ the New Zealand market.

''Privatisation would result in New Zealand families paying higher levies for less care and protection in the event of an accident, so insurers can make profits. Lower income people could miss out on care altogether.

“Privatising ACC is what National really wants to do, but won’t say so because John Key knows New Zealanders won’t support it,” Phil Goff said.

“Nick Smith’s handling of the ACC issue has been grossly incompetent. John Key now wants to use that incompetence and the absence of any other party’s support for National’s ACC legislation as an excuse to introduce National’s preferred policy of privatisation.

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“I’ve written to John Key pointing out that David Parker’s member’s bill extending out full funding of ACC from 2014 to 2019 would mean that New Zealanders would not be faced with massive hikes in motor vehicle registration and petrol levy increases.

“The National Government now accepts that. It could adopt the Parker bill now with Labour’s support, and pass it through Parliament, or a government bill equivalent to what is contained in the Parker bill,” Phil Goff said.

“Privatisation is not necessary to deal with ACC issues, and will not help hard-working Kiwis by delivering lower levies or better or even the same benefits

"ACC's annual report, released just last week, shows employers' levies here are half those of the levies paid by their counterparts in Australia, which is largely privatised. The average employer levy here is 0.94 per cent of payroll, compared to the Australian average of 1.96 per cent. Our rehabilitation rates are better and our administration costs are also much lower than Australia's.

"'The major PricewaterhouseCoopers report into ACC concluded the scheme was world-leading, often considered ‘best practice’ and that the government monopoly performed as well as or better than most other structures world-wide.”


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