Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Competition Will Bring ACC Costs Down Faster


Media information: December 19, 2008


Competition Will Bring ACC Costs Down Faster …..


ACC definitely does need a change away from its “cost plus” culture but competition will bring ACC costs down quickest, and increased productivity will boost New Zealand‘s overall business performance.

This is the view of Brian Blackman, CEO, of Wellnz Ltd, one of the country’s largest private rehabilitation and injury management companies.

“We agree with the Minister that a change in culture is required. The ‘cost plus’ mentality which is so evident now confirms that ACC has been hi-jacked by the political left, and has moved into a social welfare role rather than following a sound business model. However, changing culture though takes time – often a long time – and nothing will change unless the market forces it. Bureaucrats do have a reputation for moving slowly, and protecting their patch,” he said.

“That is why competition in this sector is so important. Competition ensures that cost effective rehabilitation is introduced and people return to work quicker than under the ACC model. The real big costs are in the compensation which is paid out weekly to claimants. If the government can reduce that, they will be well on the way to reducing the overall costs,” Mr Blackman said.

“Early return to work gets people back into the workforce more promptly, which reduces the compensation payments and increases the productivity of business. It is a simple model…..

• The average entitlement claim (one or more days off work) under ACC has increased from $15,190 to $17,117 (which excludes the first weeks wages) - a 13.9% increase on the previous year, and based on an average wage of $104.50 per day ($38,142.50 pa) results in lost days of 81 days per claim.

• The Wellnz performance, for example, for 12 months to 31 March 2008 showed the average entitlement claim was only $2,419 (which included the first week’s wages) and 12.2 lost days.

“Put simply, private management of work injuries is out-performing ACC by a factor of 7 times. This excludes all the indirect benefits that accrue – i.e. productivity, better financial management for the individual, improved self esteem, and better staff morale with the business because they see their colleague back at work again quickly,” he said.

“With the present tough economic environment within New Zealand, the focus must move to increasing productivity and reduce needless bureaucratic control. Presently New Zealand has the second lowest productivity rate in the OECD but we work the second longest hours to achieve this performance. We are 20% behind Australia and 40% behind USA in the productivity stakes. “

Mr Blackman said that New Zealand would not start to prosper and the Government could not begin to deliver their social agenda of benefits unless the underlying wealth of the country improved significantly.

“The outcome is a marked improvement in productivity. If work injury days lost could be reduced by an average of say 20% i.e. 16 days per claim, with 34,231 annual work injury entitlement claims, that would result in 550,000 additional days being available for productive endeavour. The loss of these days is currently costing up to $500 million productivity to New Zealand per annum.”

Opening the residual account would also allow for further reductions in cost. If claims from this account were made available for the private sector to manage, competition and market forces would bring further savings. This happened in 1999-2000, and the same results could be achieved this time round.

Mr Blackman said that the ‘ACC monopoly model’ had not worked. There was no “quick fix” solution but competition would bring economies which would ensure that New Zealand was on the right road to recovery.

“The solution is there. What we need is a government who are prepared to recognize this, pick up the ball and run with it,” he said.


ends

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On Who Decides On The Priority List For Vaccines

During the past week, the nation has gone through a range of mixed feelings about south Auckland. Understandably, there’s been a hankering in some quarters to punish a few of the rule breakers who plunged all of Auckland back into lockdown…Yet alongside that impulse there also been compassion for the way that poverty and overcrowding make south Aucklanders extremely vulnerable to the spread of the virus... More>>


 




Government: PHARMAC Review Announced

The Government is following through on an election promise to conduct an independent review into PHARMAC, Prime Minister Jacinda Ardern and Health Minister Andrew Little announced today... More>>

ALSO:


Government: Main Benefits To Increase In Line With Wages

All measures of child poverty were trending downwards, prior to the COVID-19 lockdown, across the two years since year ended June 2018, Stats NZ said today. The COVID-19 lockdown in late March 2020 affected Stats NZ’s ability to collect data from households ... More>>

Government: Reserve Bank To Take Account Of Housing In Decision Making

The Reserve Bank is now required to consider the impact on housing when making monetary and financial policy decisions, Grant Robertson announced today. Changes have been made to the Bank’s Monetary Policy Committee’s remit requiring it to take into ... More>>

ALSO:


Covid-19: Auckland Back To Alert Level Three After One New Community Case Revealed

Auckland will move to alert level three for a week at 6am tomorrow morning after two new Covid-19 community cases announced this evening could not be directly linked to earlier cases, the Prime Minister has confirmed.
The rest of the country will move to level two.... More>>

NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

Parliament: Kiwi MPs Among The “Most Educated In The World”

New analysis of MP qualifications reveals New Zealand’s Parliament is one of the most educated and highest qualified in the world, and significantly more educated than Australia’s. The research, by Mark Blackham of BlacklandPR and Geoffrey Miller ... More>>

The Dig: An Illogical Ideological Struggle

Dig beneath all the trade wars and the arguments to the effect that the USA should not permit China to achieve economic and technological superiority, or even parity, and you find the real reason behind the conflict... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels