Adam is a political reporter for the New Zealand Herald.

Nats' ACC changes ready to roll

Nick Smith. File photo / Supplied
Nick Smith. File photo / Supplied

While National is controversially seeking a mandate for its "mixed ownership model" for state-owned assets this election, it would also take victory this month as a green light for its partial privatisation plans for the ACC.

ACC Minister Nick Smith last year confirmed the Government would, in its second term, go ahead with plans to allow private insurers to compete with the ACC for a slice of the $1 billion-a-year workplace injury cover market, which is almost completely handled by the corporation's Work Account.

Dr Smith has also confirmed the Government will consider allowing competition against the $1.5 billion-a-year Earners' Account, which covers non workplace injuries, and also the $1 billion-a-year Motor Vehicle Account. If it chooses to proceed it will campaign on those policies in 2014.

These policies follow on from last year's "stocktake" of the scheme, which National agreed to in return for coalition partner Act's support for changes to ACC legislation that Dr Smith said were necessary because the insurer was insolvent.

The stocktake found that ACC alternated between periods of "rapid and unaffordable expansion" of claims liabilities and periods of greater focus on claims management and rehabilitation. Dr Smith said that under Labour, the number of claims rose quickly and the scheme became unsustainable. He argues that private competition will force the ACC to run a consistently tighter ship.

In the meantime, under his legislation some entitlements have been dropped and claimants report others have become more difficult to access.

Labour and the Greens argue the pendulum has swung too far and claims are being unfairly denied, as was explored in a series of articles last year detailing hundreds of elective surgery claims that had been turned down. Following the Herald's series, the ACC held an internal review and found it had rejected too many elective-surgery claimants and would improve its processes.

Labour's ACC spokesman, Chris Hipkins, said his party was committed to making ACC more receptive to claimants as "a comprehensive, universal and public" scheme and would halt or roll back National's move towards privatisation.

The Greens' ACC spokesman, Kevin Hague, said ACC under Dr Smith now had a "culture of disentitlement".

"... we would be looking to wind back pretty much everything that was in the ACC Amendment Bill. We believe that was all about erosion of entitlements and was a betrayal of the scheme's original principles."

The Greens want to return to "pay-as-you-go" funding as they see pre-funding as a precursor to privatisation.

Mr Hipkins said Labour would continue with the current funding model as the scheme was now close to being fully funded.

Meanwhile, National has tossed voters an election-year ACC sweetener - recently confirming levies would be cut next year.

Labour argues National can afford to cut the levies only because it was charging too much after unnecessarily raising them in response to a "manufactured crisis" about the scheme's sustainability.

The Maori Party says it has concerns that privatisation would see levies rise, "which would push the affordability of its protection out beyond the reach of our low-income families, many of whom will be Maori and Pasifika".

- NZ Herald

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