John Key MP

National Party Leader

16 July 2008

ACC policy: safer workplaces, effective compensation

National's ACC policy aims to make workplaces safer for workers while delivering certainty of coverage and more effective compensation, says National Party Leader John Key.

"National supports a comprehensive, 24/7, no-fault accident insurance scheme that delivers certainty of coverage to all New Zealanders. However, the ACC scheme can be improved. Workplace accident figures are high by international standards.

"OECD data to the end of 2003 showed New Zealand's non-fatal injury rate rising when everybody else's except Luxembourg were falling. ACC data shows the number of work-related injury claims increased each year from 2002 to 2005, only declining in 2006.

"Either way, we can do better.

"Incentives for employers to improve safety practices are poor in a scheme in which similar premiums are charged regardless of an employer's workplace accident record. Where accidents do occur, incentives for quick, high-quality rehabilitation are weak, and entitlements under the scheme for injured people are not of high quality.

"National wants a more flexible scheme that rewards employers with good workplace safety records, penalises those with poor records, and encourages employers to buy more than the basic cover.

"National supports the principle of competition and choice in the ACC Work Account, which covers employees and self-employed at work. The issues around providing competition in relation to the Work Account are well known and understood. The same cannot be said of the other accounts." National will:

* Investigate opening the Work Account to competition.

* Conduct a full stock-take of the various components of the ACC scheme, evaluate progress to full funding, and identify areas of cross-subsidy or cost-shifting and underfunding of newly-legislated entitlements.

* Investigate the introduction of an independent disputes tribunal to end ACC's dual role of judge and jury on disputed claims.

"However, this is a highly complex sector. New Zealanders are entitled to feel secure that the entitlements guaranteed by law will be delivered efficiently and reliably. Any changes to introduce new elements of competition and choice will be made carefully, and after full evaluation of the benefits to consumers," says Mr Key.

"The experience of competition in the late 1990s was healthy for ACC. Levy rates are now substantially lower as a result of that experience, and the ongoing prospect of competition.

"Despite Labour's rhetoric, it has actually retained the ability for larger employers to opt out of the state monopoly and either self-insure or use a private insurer."

ENDS

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