ACC privatisation only if proven benefits - Wilson

New Zealand's ACC model is among the best in the world and privatisation should only be allowed if there is evidence it will improve the system, former ACC chairman Ross Wilson says.

He was replying to reports the Government looked likely to privatise areas of ACC following an interim report from the ACC stocktake working group.

The report on opening up parts of ACC's business to competition has said the idea is workable, Radio New Zealand reported today.

It said the report was understood to outline the introduction of competition for workplace insurance.

The report was delivered to ACC Minister Nick Smith a few days ago, and his office would not comment on its contents.

The Accident Compensation Amendment Bill raises levies and cuts some entitlements, measures Dr Smith said were essential to deal with huge deficits.

In exchange for ACT's votes, which ensured the bill passed all its stages, the Government was going to open ACC's work account to private competition if the steering group recommended it -- which they now seem to have done.

Mr Wilson, who was stood down as chair by the National Government last year, told Radio NZ there was nothing wrong the involvement of some private providers in areas of ACC if there was evidence it would result in better performance.

"Is this based on an ideological belief that private is better, or is it based on some evidence from somewhere in the world that we have a model that will work more effectively because of private insurance involvement?" he asked on Radio New Zealand.

Mr Wilson said PricewaterhouseCoopers was commissioned in 2008 to look at the evidence of superior international models.

"Their evidence was that we have, in our model, the best scheme in the world."

Claims accident rates went down during the past period of ACC privatisation were "rhetoric", he said.

"The evidence that's produced is that the claim rates went down and that is then extrapolated to be accident rates, I don't believe that there was any change in the accident rates, but the claim rates were changed because people were discouraged from making claims or they were paid out and there was no claim made."

Labour ACC spokesman David Parker said the Government was intending to privatise ACC.

The beneficiaries of this will be Australian financial institutions and the lawyers called in to fight legal battles, he said.

"The inevitable result of creating profit margins for private insurance companies and higher administration and regulatory costs is that hard-working New Zealand families will pay more and receive less care and protection in the event of an accident."

ACC had more than $11 billion in assets, Mr Parker said.

"The Government needs to urgently clarify how far their privatisation plans extend.

"This unwise move is the price National paid to get ACT support for their recent ACC legislation, that others would not support."

Green Party ACC spokesman Kevin Hague said his party had been expecting the move since the Government and ACT "did their deal" when the last ACC bill was passed.

What the Government called "the opening up of the working account" everyone else called "privatisation", Mr Hauge said.

"ACC is a world-leading service...it's not broken, it's just a question of the funding mechanism that you choose."

Council of the Trade Unions president Helen Kelly said unions would not be the only ones against the opening up of ACC to competition -- there would be widespread opposition.

Other countries, including Australia, used similar schemes and they did not work, she said.

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