"The state has no responsibility for the wellbeing of its citizens": that is Act's guiding philosophy and it spells disaster for the area of accident compensation, Labour ACC spokesperson Ruth Dyson said today.

"Act's policy is to abolish the entire ACC system. New Zealanders would only get compensation for accidents if they or their employer has bought insurance cover.

"It is complete madness. Low and middle-income New Zealanders will not be able to afford the premiums. If a family's sole income earner falls down the stairs or is hurt playing sport, that family will face a desperate situation with no money coming in.

"At the same time, Act is offering a massive gift to the big business interests that have bank-rolled the party. Mr Prebble says the 'tail' - the ACC payments for historical workplace accidents - will be paid off from general taxation. This $7 billion liability is currently funded from employer levies.

"Employers will get a $7 billion bonus, and $7 billion will have to be cut from social services like health and education.

"Mr Prebble, like his National Party buddies, is also ignoring the realities of the privatisation of workplace accident insurance. Private insurance companies are motivated by profits. They have offered unsustainable deals in their desperation to gab a large chunk of the work accident insurance market. Once the market is captured the premiums will rocket up.

"Every overseas experience shows that the involvement of private insurance companies in accident compensation is more litigious, more expensive and does nothing to reduce accidents.

"Comparing an employers new insurance premium with their old ACC levy is completely meaningless and Mr Prebble knows it. It does not account for the residual claims levy, risk sharing and a likely reduction in the ACC levy this year.

"If an employers new premium is less than half of last year's ACC levy, they might be better off - for now. The employer used as example by Mr Prebble has had a 37 percent reduction in premium - so is, in real terms, worse off.

"The internationally proven, most efficient way of delivering accident compensation is through a well-managed single public model," Ruth Dyson said. "Labour will rebuild ACC based on the three primary functions of injury prevention, rehabilitation and compensation - in that order."

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