Media release
9 October 2009

ACC requires refocusing to reduce liabilities

ACC’s liability blowout has occurred because the scheme has expanded beyond its original principles.

This is the view of Business NZ. Chief Executive Phil O’Reilly says ACC needs to be steered back towards its original mission of injury prevention and rehabilitation.

“Over recent years ACC’s definition of ‘injury’ has become increasingly extended and many conditions that should be paid for by the health system have ended up being paid for by ACC.

“Diseases like leptospirosis and brucellosis, and medical conditions like asthma now incur costs for the ACC system when these should instead be paid for out of Vote Health.

“The boundaries between ACC accounts have also been blurred - for example the merging of the Self-Employed and Work accounts - reducing transparency and reducing the ability to efficiently manage costs.

“The policy of ‘smoothing’ premiums and extending the duration of residual claims are further examples of ad hoc decision-making that has reduced transparency and efficiency in managing costs.

“Incentives for safety at work have also been diminished.

“As a result of governance decisions over recent years ACC has morphed into an ill-defined monster that now overlaps the health and social welfare systems.

“ACC should be functioning properly as an insurance-based risk management scheme, not a social welfare scheme, to reduce its dangerous level of financial liability,” Mr O’Reilly said.

ENDS

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