Media release on behalf of ACC Futures Coalition - 18 February 2011

23 February critical day for future of ACC

“Next week cabinet will decide just how they will undermine ACC by choosing which model for privatisation they will adopt,” says Glenn Barclay Convenor of the ACC Futures Coalition.

On 23 February the cabinet will decide whether to fully privatise the work account by handing the underwriting over to private insurers, or to partially privatise it by leaving ACC in the market. They are also considering the option of extending the accredited employers scheme but with less regulation and oversight than at present and therefore less protection for injured workers.

“Lets be clear,” said Mr. Barclay, “all of these options will be bad for injured workers and will further undermine the scheme. Both the full and partial privatisation will be administratively more expensive, lead to greater costs over time and not lead to the price stability expected. However, most importantly they establish the employer as the client of the insurer, not the injured worker.”

“The option for extending the accredited employer scheme is superficially more attractive, given that there is evidence that the scheme has been successful. However it has been successful in part because the employers underwrite the scheme themselves and when the employers have managed the claims themselves. The proposals being considered will see greater use of private third party administrators, who have a poor record in supporting injured workers, and the introduction of underwriting by private insurers. This will be compounded by the proposal to further weaken the already minimal regulation and auditing of the scheme,” said Mr. Barclay.

“It is not too late for the government to reconsider and we are asking our supporters to write to Mr. Key and Dr. Smith strongly urging them to back off from these destructive proposals,” said Mr. Barclay. “ We would remind them of the conclusions of the comprehensive study of ACC undertaken by PriceWaterhouseCooper in 2008.

These observations lead us to form a moderately strong view that a government monopoly is the best observable mechanism for implementing the ACC employers’ account.

ENDS

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