Where is the accountability within ACC

14 October 2009

Media Release

Where is the accountability within the Accident Compensation Corporation for its huge loss and rise in premiums?

“Some remedial steps are needed in ACC’s structure and management to ensure the unacceptable $4.8 billion loss just announced never happens again,” says Auckland Chamber of Commerce chief executive Michael Barnett.

At a time when business is in a mode to carefully watch the bottom line spend of every dollar, it is undermining to business and government campaigns to lift productivity that the Corporation can get away with simply passing on its huge loss to customers.

The 10%-plus increase in premiums announced today is unacceptable, even though much lower than proposed by the Corporation. The increases are still not only well above the rate of inflation, but consumers have no choice other than to pay up or else face stiff penalty charges.

“It’s a massively unfair system and an area of strong unease about the government’s commitment to creating a competitive business environment,” said Mr Barnett.

Unlike any other area of insurance, businesses must pay ACC’s premiums as there is no other provider of accident insurance permitted. “And because ACC has no competition, there are no benchmarks to measure its performance against.”

Mr Barnett pointed out that when a previous government restored the State monopoly in accident compensations in 2000, it promised two things:

• Competitive premiums – that rates would not exceed those that had been briefly offered by private insurers; and,
• A comprehensive and positive accident prevention culture would be phased in.
This year’s results are proof of a failed strategy. “Instead we are back on an outdated cost-plus treadmill.”

ENDS

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