CTU media release
12 May 2009

Smith announces first steps to privatisation of ACC

The Government’s blind determination to turn ACC into an insurance scheme in preparation for its privatisation will fatally undermine New Zealand’s priceless accident compensation system and compromise worker health and safety, said CTU President Helen Kelly today.

ACC Minister Nick Smith told a National Party meeting in Timaru at the weekend that he would cut ACC entitlements to those that are injured and return ACC to an insurer model. This goes against the principle of community responsibility and social insurance originally articulated by Owen Woodhouse when ACC was first established, exposing the Government’s fundamental rejection of the basis on which ACC operates.

“In announcing a return to experience-based levies the Minister shows that history has taught him nothing. The assumption that setting employer levies according to the number of claims acts as an incentive to better safety proved to be ineffective when it was tried in the 90’s,” said Kelly. “We know from that experience that the system created incentives for employers to hide workplace accidents by both encouraging workers to claim that accidents occurred outside of work or to not seek proper medical attention. Rehabilitation also suffered as workers were dismissed or forced to return to work before they were ready.”

“We know that the most effective way to improve health and safety at work is to have proper systems in place at the workplace, to have good enforcement regimes by Government and to have trained worker health and safety representatives,” Kelly said. “The Minister should look at what works and support that rather than move ahead on a scheme proven to fail and to disadvantage workers.”

“Workplace safety depends on a culture of openness in documenting and analysing all incidents and acting upon their causes. The Minister is putting these changes in place now to pave the way for ACC privatisation later – private insurers work on assessment of risk and this will provide the information they need to sell insurance. ACC however is based on community responsibility. New Zealanders gave up the right to sue for a 24 hour no-fault scheme where the community shared the cost of prevention, compensation and rehabilitation of those that have an injury. Nick Smith has shown little regard for this most precious of social contracts, and all New Zealanders should be very concerned about that.”

ENDS

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