25 August 2005
National plans to butcher ACC again
“It is appropriate that National launched their ACC policy in a butchery, because that’s what they would do to ACC,” ACC
Minister Ruth Dyson said today.
Ms Dyson said National’s plan to privatise workplace accident insurance was a costly experiment that had already failed
miserably before.
“Levies were higher under the privatised workplace insurance scheme set up by National in 1999, while compensation and
rehabilitation of injured people was worse.
“Since Labour returned ACC to state provision in 2000, the employer levy has fallen by 30 per cent, from $1.22 to 0.88c
per $100 of earnings. In comparison, premium rates for private schemes around the world have escalated, especially
post-9/11. Some businesses overseas have faced premium hikes of up to 500 per cent.
“Not only are ACC’s average employer levy rates 62 per cent lower than the average for Australian schemes, but our
rehabilitation and return-to-work rates are much better.”
Ms Dyson said ACC was able to offer lower levies because a large slice of private schemes’ premiums went into profits
and commercial costs.
“Only about 60 per cent of the amount collected in premiums by New Zealand private companies was available to meet
claims, compared to nearly 90 per cent under ACC. This means ACC can not only set lower levies, but invest more in
injury prevention, and provide better entitlements such as lump sum payments for permanent impairment.
“In contrast, the private market creates incentives for employers to under-report injuries and buy the cheapest scheme,
where ‘savings’ are made at the expense of injury prevention, rehabilitation and other entitlements. Disputes and
litigation would increase as a result.
“National’s folly is not just about wasting money on fixing something that isn’t broken. They would destroy a
world-class scheme that other countries dream about,” Ruth Dyson said.
ENDS